As the Latin American middle class grows it travels and stays in hotels. Meanwhile Marriott invests in Latin America. According to a recent press release from the US based global hotel operator, Marriott, MAR, will double its number of rooms in Latin American and the Caribbean over the next five years. This will mean seventy new hotels in an area where the middle class and been growing and expendable incomes have been steadily rising. Investment in Latin America by a company such as Marriott promises profits for company shareholders, jobs for Latin Americans, and increasing prosperity as well. Brazil is coming to be known as the Latin American “Super Power” and little Panama on the isthmus that connects North and South America expects to see its economy grow at faster than ten percent this year. Many believe that Latin America is one of the best places on earth to invest in the coming years. As Marriott invests in Latin America, stock investors in the USA may wish to look “South of the Border” as well for profits based on economic growth.
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Travel and Hotels as an Offshoot of Trade and Industry
As Marriott invests in Latin America, Nissan is investing in Northern Mexico. The Japanese car company produces more of its cars in Mexico than it does in the USA. It costs well under $10 an hour in labor costs to do the job that costs around $50 an hour in the USA. However, Mexican workers are not upset. The cost of living is substantially less in Mexico than in the USA. Nisan provides medical care as well as loans for buying homes to their workers. NAFTA seems to be working out quite well for the folks working for Nissan in Northern Mexico. As prosperity works its way through Mexico, Central America, and Latin America, the emerging middle class wants what the middle class enjoys in the USA. Malls are springing up, folks are buying iPods and Blackberries, and families are traveling. Interestingly, Homeland Security rules make it difficult for Latin Americans to travel to Miami to take a Caribbean Cruise. So, Latin Americans fly to Panama, shop at the malls in Panama City, and start and end their Caribbean cruise from the Caribbean port of Colon, Panama. As Marriott invests in Latin America it has upgraded and expanded its Marriott Hotel in the banking district of Panama City, Panama, as well. Although the long term euro zone investment outlook may not look especially good, investing in Latin America may just be the thing.
Following Marriott to Investment Opportunity
As Marriott invests in Latin American it plans to expand its various brands, and not just the Marriott name. The company plans to add hotels in Cartagena and Cali, Colombia. This is a region wracked by civil war until just a few years ago. The government first drove the rebels from the cities and not is hunting them down in the jungle, with help of US Special Forces advisers. As civil unrest decreases, business opportunity and travel will beckon and Marriot plans to be there. If you are happier choosing conservative investments you may not like the idea of investing in companies outside of the USA. If that is the case you might consider the many US companies, like Marriott, that have an expanding presence in Latin America and the Caribbean. Many of these companies may well make healthy profits as Latin America prospers. As Marriot invests in Latin America, we are not suggesting investment in the company or suggesting that one ignore it. Rather we use this as an example of thinking through investment opportunity.
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