MEXICO CITY-The Brazilian hospitality market continues to shine as one of the best growth areas in the world, helped along by government programs, low interest rates and investor incentives, according to a recent report by Portsmouth, NH-based Lodging Econometrics. However, Mexico’s star has receded somewhat due to its connectedness with the US markets and a crime problem, and the Caribbean is having one of its slowest development seasons in years.

Brazil takes up the majority of the new hotel projects in the South America development pipeline, growing to 175 projects and more than 28,000 rooms in the fourth quarter, says LE President Pat Ford. “Brazil was already strong pre-recession, and bounced back quickly, attracting both US and international investment,” he tells GlobeSt.com.

Further activity continued in the rest of South America, including projects in Argentina, Columbia, Peru and Chile. Growth in GDP in these countries, as well as Brazil, has fueled South America growth, with 40 hotels expected to open in 2011 in Brazil and 25 hotels in the rest of the region. This growth pipeline is expected to last until at least the middle of the decade, Ford says.

Development in Central America has also been increasing steadily, with almost 60 projects underway, mostly in Panama and Costa Rica. The two countries have seen a tremendous growth in tourism, Ford says.

However, he says the economic downturn has hit Mexico the hardest of the continent, with a decline in pipeline projects down to 115 by the fourth quarter. About 19 hotels will open this year in Mexico, Ford says, and 16 in 2012. Heavy crime activity is one reason for the drop in popularity for the country.

The Caribbean is sluggish as well, according to Ford, with only 66 hotel projects in the pipeline. Even massive new projects, such as a recent $2 billion resort being built near Nassau in the Bahamas, will take at least four-to-five years to come to fruition, Ford says. Region experts have suggested the Caribbean is at the bottom and is ready to enter into its next phase of resort building, especially as US tourists are now more likely to travel local than abroad for vacations.