Despite a more ominous economic outlook in South America, investors are still bullish on the long-term viability of hotels in the region. That’s according to speakers on “The lenders outlook” panel during the recent South American Hotel Investment Conference in LIM. “Generally speaking, despite declines in the economic outlook, investors’ return criteria increased only slightly, especially in gateway cities,” said Clay Dickinson, managing director of the Latin American region for JLL’s Hotels & Hospitality Group. But certain countries and secondary cities deteriorated, which caused overall sentiment to decline slightly, he added. Put another way: Investors still have a positive outlook; they’re just less positive this year than in years past. The veneer has faded in EZE and GIG, where return expectations are negative—a first for Brazil, Dickinson said. Still shining are LIM, MEX, BOG and SCL. In terms of investment strategies, he said, “Most will build or hold, which is consistent with past years.” A look from lenders Lenders said the emerging hotel industry in South America provides an opportunity to diversify their holdings. That strategy already has paid off for Credicorp Capital in Colombia amid a slowdown in oil production, said Andrés Pacheco Rincón, the firm’s regional director of real estate development. It was not easy to convince the investment community that hotels were a real estate business. They thought it was strictly an operating business, he said. That’s not to diminish the role of operations, Pacheco said. For the real estate investment to work, you need to find alignment with both the operator and owner.