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Adam Greenfader, Managing Partner, AG&T, Raul F. Calvet, Moderator


ADAM- A“Big shout out to everyone at CHRIS and HOLA for putting on this amazing virtual event, The Puerto Rico Builders Association for Sponsoring, and Oceanfront International Group.” 

Q- What do hotels need to do in order to go through the recovery period?

ADAM – Costs have already been cut. So now it’s time to increase revenues.  I think the key will be to help guest feel safe. There is a huge pent up demand. In particular for anything that makes people feel good, for “Regenerative Experiences”.  Places like Costa Rica with its low density and robust nature-centric offering should fare well post COVID.  Incredibly, the average stay in Costa Rica is 12 days. When you look at their secret, it is based on a diversified ecological travel experience.

Q- How are you monitoring the US economy? 

ADAM – Confidence = Jobs.  The unemployment is still at 10.2%, which is near post-war highs across the country.  We are also keeping an eye on inflation and deflation. I recently traveled across 10 States in the USA and visited many hotels with reduced ADR’s – deflation.  I ordered food from restaurants that was 30% more expensive than before COVID19 – Inflation.

Q- Are the Banks exerting pressure to sell?

ADAM- We are still in the honeymoon phase. We expect to see some distressed assets come to market in 2021 in Central America. However, because the region’s hotels have generally less debt than in US, we may not see as much distressed inventory as a CMBS loan portfolio for example.

Q- How are the REITS doing in the US?

ADAM- Real Estate Investment Trusts (REITs) collectively own about $3 trillion in assets across the US. The REITs own, operate, or finance income-producing real estate ventures.  REITs Hospitality is currently at -14% with Industrial remarkably at a positive 8%.+

Q- What regions should be first to recover from the COVID19 Pandemic?  

ADAM – Costa Rica has a highly educated workforce and stable government. By almost any standard, Costa Rica has one of the best health care systems in Latin America.  Incredibly, Costa Rica exports as much in medical devices as it does fresh bananas. Costa Rica’s quality of life is evidenced by topping the Happy Planet Index rankings to #1. Costa Rica is one of the world’s leading nations for ecological sustainability and a Blue Zone (only 6 in the whole world)!

Q- How important are airports for the hotel industries recovery?

ADAM- Airports are critically important to recovery.  Today more than ever, as tourists come back to Central America, they will be looking for

  • health and safety
  • ease of access (flights + affordable costs)
  • air conditioning

One of my favorites is Liberia Airport. LIR is one of the top Airports in all of Latin America and the Caribbean. More than 3 Million tourists travelled to Liberia airport (LIR) in 2019 with 65 flights from the USA daily.  The airport is small, modern, and full Americans dressed in Patagonia and Lululemon. “It feels like Burlington, Vermont.”

Q- How feasible is to reconvert an hotel into other use?

ADAM- In the last crisis, we saw a lot of conversions from office to residential. Today, we have a huge need to increase the wellness element of hotels.

Q- How do you value a hotel asset in today’s world?

ADAM- Discount Cash Flows (DCF) are the only way to quantify a value. This is even more true today in the COVID 19 pandemic where sales are scant.

Q- Where do you see Costa Rica’s Development opportunities in the near future?

ADAM- We like the Papagayo region where ADR and occupancy rates are the highest in the country and probably in Latin America.  Costa Rica has incredibly 12 day average stays with a reported 30% retention rate of tourists.  They come back.  As a Blue Zone, most of the Papagayo peninsula is protected. We found this eco-development that is located only 20 minutes by car from the LIR airport. Hacienda del Mar is an absolute paradise.  There are plans to build a Blu Zone hotel with 100% of its infrastructure complete. The project has lots of room to grow and we are seeking like-minded partners.