HOSPITALITY

The hospitality sector in BRICS countries presents long-term growth potential fueled by expanding middle classes, increased domestic tourism, and government support for travel infrastructure. However, international corporations in this space face considerable risks stemming from political uncertainty, regulatory opacity, and inconsistent enforcement of business laws. Foreign operators often contend with restrictive zoning regulations, bureaucratic hurdles in obtaining permits, and fragmented oversight of health, labor, and taxation standards. Additionally, hospitality is a highly visible sector, making it susceptible to sudden policy shifts during political transitions or economic downturns.

In the past five years, the COVID-19 pandemic was the most defining shock to the sector, with BRICS countries imposing lockdowns and border closures that devastated occupancy rates. In China, international hotel chains like Marriott and Hilton faced strict pandemic-era controls and saw their expansion plans disrupted. Brazil and South Africa experienced extended tourism slumps and safety concerns that led to the downsizing or closure of many foreign-run properties. Conversely, India’s domestic travel rebound from 2022 onward benefited global brands like Accor and IHG, which capitalized on leisure and tier-two city demand. Russia’s hospitality sector, once attractive for global chains, saw a rapid exodus of Western operators post-2022 due to sanctions and reputational risk.

Ongoing risks in the BRICS hospitality market include fluctuating demand linked to political instability, visa restrictions, crime, and civil unrest. Infrastructure deficiencies in transport, utilities, and digital connectivity can affect service quality and expansion viability, particularly in secondary markets. Additionally, ESG considerations—such as sustainable tourism, labor ethics, and local community impact—are growing in importance for regulators and global investors. International hospitality companies must carefully manage local partnerships, compliance frameworks, and brand positioning to operate sustainably in these complex environments.