An Overview of Self-Storage in Latin America: Word of Mouth, New Laws and an Emerging Customer Base
|Copyright 2014 by Virgo Publishing.|
|Posted on: 10/25/2011|
By Lucia Darnell
“Self-service storage” is a relatively new concept in Latin America, which comprises Mexico as well as the Caribbean, Central America and South America. Companies providing self-storage in these regions have only been around about 20 years or so compared to the United States, where they’ve existed for almost half a century. But though self-storage is young in this region, it’s growing, with support coming from word of mouth, new laws, a growing customer base and an industry-specific association.
Spreading the Word
Most Americans are at least somewhat familiar with self-storage. Even those who’ve never used the service are aware of what it is and have a basic idea of how it works. This is due to many factors such as the vast number of storage facilities along roadsides and in neighborhoods, word-of-mouth testimonials from current and past tenants, and even popular television shows.
But industry familiarity is not at all the case in Latin America. Since self-storage is such a new concept in these countries, it’s important to get the word out to potential customers. It’s common for facility operators to employ outside sales personnel whose main job is to visit office buildings, manufacturing companies, apartment complexes and so on, promoting the advantages of renting storage space.
Passing laws and regulations that pertain specifically to self-storage is essential in Latin America, both for facility owners as well as tenants. Laws act as guidelines for self-storage operators, and can even protect them from hefty fines resulting from lawsuits. In addition, self-storage legislation can regulate rental agreements, lien sales and value limits on items stored, which protects all parties involved.
For example, in the United States, it’s understood that each tenant is responsible for the items in his own individual unit. If someone stores stolen property or other contraband, that person alone is held accountable. But if this situation were to occur in some Latin American countries, the entire self-storage complex might be shut down and all business brought to a halt until justice is decided. This obviously can cause a severe hardship to the owner as well as customers renting space at the facility.
Emerging Customer Base
The few self-storage companies that exist in Latin America have been well received and are going strong. Their tenants consist mostly of businesses, tourists and wealthy individuals.
Businesses often find it much cheaper and even safer to rent storage space for things such as surplus merchandise, boxes of files, large equipment, etc. It can be more economical to rent offsite storage than to lease a bigger office or build a new warehouse.
Because of the large number of businesspeople who are tenants, many storage companies furnish an area dedicated to this group of clientele including features such as workstations with computers and Internet capabilities, fax and copy machines, conference rooms, and other business-related amenities.
Tourists—particularly American tourists—are accustomed to the idea of self-storage, and they like their stuff! So renting a storage space to park a car for a month while visiting a foreign country or store vacation gear during the off season is very common. This can be much easier than hauling everything back home to the States.
At present, most people who rent self-storage in Latin American countries are in the economic upper class. This is why many storage companies offer amenities that are not commonly available in the United States, for example, a concierge service for tenants to assist them with their moving and storage needs. The concierge can arrange rides for tenants to the airport or other locations. It can even provide a mechanic for basic vehicle maintenance such as battery changes and flat-tire repair, which is great for automobiles parked for long periods.
But the future of self-storage in Latin America definitely lies with the emerging middle class. Although not wealthy by any means, many people in these countries are becoming far more financially secure. With new money comes the desire to buy new stuff, and with new stuff comes the need for space.
The Latin American Self Storage Association (LASSA) was formed to assist and advise anyone involved with self-storage in the region to deal with the trials and tribulations of this “new” industry. It’s an alliance of people working together to further the development of the business—colleagues as well as competitors—with the common goal of improving the environment for all. Members are owners, vendors and other self-storage personnel who collaborate to enact favorable laws and determine what works well for the industry today and in the future.
Between getting the word out about the benefits of self-storage, new laws being enacted, and a whole new group of potential customers emerging, the outlook for self-storage in Latin America is promising. The association will be there to provide support to facility operators and help improve the business for everyone involved.
Lucia Darnell is secretary for the Latin American Self Storage Association and the Spanish business director for PhoneSmart, an off-site sales force that provides self-storage operators with call-center services and employee-training programs. She can be reached at email@example.com . For more information about LASSA and self-storage development in the region, visit www.laselfstorage.org .