Hospitality Design - January/February 2012 - 70

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BRAZIL

game on
By Stacy Shoemaker Rauen
It’s no surprise that all eyes are on Brazil. Not only is the country hosting two of the world’s most important sporting events of the decade— the World Cup in 2014 and the Olympic Games in 2016—Brazil is also one of the fastest growing economies, experiencing sustained growth (its GDP increased 7.5 percent in 2010, a two-decade record high) and boasting a rising middle class (some 30 million) that is spending and traveling more than ever. Lodging-wise, the numbers also speak for themselves. Jones Lang LaSalle reported that in 2010, Brazil posted the highest RevPAR growth rate on record at 17.3 percent, and predicted a similar increase for 2011. According to STR Global, year-to-date in October, occupancy was at 69 percent, up 3.5 percent from 2010; ADR was $141.53, a 25 percent increase; and RevPAR was almost $100, up 29.4 percent. This growth shows no signs of stopping either: Marco Lomanto, director of products and tourist destinations for EMBRATUR (the Brazilian Tourist Board), says Brazil will increase its occupancy by 2017, adding 300 new hotels with about 70,000 rooms—10,000 in Rio de Janeiro alone—all in an attempt to accommodate the projected 600,000 tourists for the World Cup and 380,000 for the Olympics. The Brazilian government also plans to invest an estimated $20 billion on overall infrastructure improvement, including transportation in host cities, new stadiums and refurbishments of existing ones, seven new cruise terminals, and the creation of temporary and permanent venues for the Olympics. “Brazil is on ﬁre,” says Ricardo Dunin, partner, Performance Empreendimentos Imobiliarios, one of the largest developers in Rio with 13 branded hotels (mostly Accor properties) in the works. “There’s a big demand that wasn’t there before, and not enough hotels. Now everyone wants to go to Brazil: international [tourists], business travelers, and locals, those who couldn’t afford to travel and now can.” But, he warns, “Brazil is very difﬁcult. It’s proven to be a harder place to do business than other [countries] in Asia and South America.”

Looks Can Be Deceptive
Even with all of the glowing numbers, the world’s seventh largest economy and Latin America’s largest is lacking quality international hotels. According to STR Global, there are only 103 projects currently in the pipeline, accounting for 12,775 rooms. “The Brazil hotel industry is in its infancy,” says Laurent de Kousemaeker, senior vice president of development, Latin America and Caribbean for Marriott International, noting that Marriott only has four hotels in Brazil. “We quantiﬁed the rooms in Brazil’s ﬁfteen major cities,

and it came out at one hundred twelve thousand. We broke those down by category and only six thousand represent full service and luxury; the rest is select service. You have to scratch your head and ask, ‘Why aren’t people building hotels? What is all the hype about?’” “More than eighty percent of existing hotel supply is budget and midscale. There’s not even a luxury branded hotel in São Paulo,” adds Ricardo Suarez, vice president of acquisitions and development in Latin America for Starwood Hotels & Resorts, which just announced the 2014 opening of the Sheraton Reserva do Paiva Hotel and Convention

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Table of Contents for the Digital Edition of Hospitality Design - January/February 2012
