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US$ 3 Bi Investment Expected

No Slump for Brazil's Hotel Industry

Alexandre Rocha  Sep 18, 2009

Brazil's hotel industry remains attractive even at a time in which international tourism is suffering the consequences of the crisis. The country's potential as an investment target was highlighted at the 2nd South American Hotel & Tourism Investment Conference (Sahic), held this week in the city of Rio de Janeiro, in southeastern Brazil.

According to the general coordinator of Investment Promotion of the Ministry of Tourism, Laércio de Souza, who attended the event, the market perception is that the reduction in the average occupation rate of hotels was low when compared with other countries and, at the same time, fees have increased, thus making up for the lower number of visitors.

"There was no slump in the Brazilian hotel industry, the companies earned even more," Souza stated. According to him, if on the one hand there was a reduction in the number of foreign visitors, which contributed to reduce average occupation rates, on the other hand there was growth in the total number of Brazilian guests, which, coupled with seasonal price adjustments, has led the fees to increase.

And the forecasts concerning investment in the sector are optimistic. Souza stated that the ministry forecasts an investment volume of between 5.6 billion Brazilian reais (US$ 3 billion) and 6 billion reais (US$ 3.2 billion) in the hotel industry alone over the next two years.

He added that the country's increased Gross Domestic Product (GDP) in the second quarter - growth of 1.9% compared with the first quarter - has prompted optimistic projections.

The general director of the Accor group for South and Central America, Roland de Bonadona, stated during the conference, for instance, that the company is currently investing in 15 new projects in Brazil.

He underscored that the country has managed to overcome the effects of the crisis and is now recovering, therefore this is a good time for investing. "The situation is not tragic as in other markets," he declared, according to a press release issued by the Ministry of Tourism.

As in other sectors, according to Souza, the highlights of the hotel industry right now are large emerging nations such as Brazil, China and India, which have proved more resistant to the crisis than the United States and the European Union. In Brazil, the tourism sector as a whole accounts for roughly 6% of the GDP.

He also said that out of total investment in the Brazilian hotel industry, 50% originates in the country itself, and 50% come from abroad. The region that attracts the most interest of sector entrepreneurs is the Northeast, which is the target of more than half the new projects.

No Slump for Brazil's Hotel Industry
Source: Brazil magazine

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