The October 2009 decision by the International Olympic Committee (IOC) to award the 2016 games to Rio de Janeiro is the latest positive development for the Brazilian tourism industry, which is gradually moving towards realising its enormous potential. The trend in the number of inbound tourists has been erratic but unquestionably upwards arrivals have risen from 4.7mn in 2001 to 7.2mn in 2008. The report expects a fall in that number in 2009 because of the impact on developed countries of the global financial crisis but the recovery should be quick. The report forecasts that the number of tourist arrivals will increase to 9.2mn by 2014.

Unlike most developed countries whose tourism industries have been hit even if indirectly by the global financial crisis, Brazil has the advantage of reasonably strong domestic demand. The number of Brazilians who are looking to travel within their own country and that can afford to do so is growing. According to Brazilian Institute of Tourism (Embratur) president Jeanine Pires, the revenue generated by tourism in 2008 was nearly 17% higher than in 2007, which was the best year on record. It appears likely that overall growth will continue through to 2009. The airline Gol Transportes Aéreos raised its market outlook for 2009 in November after posting a Q3 profit that beat Bloomberg analysts’ estimates. Gol forecast a 14% jump in 2009 in domestic traffic, up from an earlier prediction of 2-4% industry growth.

Other company news has been positive, with Accor developing a network of 20 Formule 1 and Ibis hotels in Brazil by 2010 a project brining nearly 5,000 rooms and total investment of about EUR200mn. In November 2009, Brazilian flag carrier TAM Linhas Aéreas reported a profit for Q309, boosted by the Brazilian real strengthening against the US dollar and dropping fuel prices, Bloomberg reported. Hotel das Cataratas, at Iguazu Falls, by Orient-Express Hotels was upgraded in autumn 2009. We see upgrades as signs of a more general boom in investment in Brazil’s tourism infrastructure, which is widely regarded as a factor restraining the industry from reaching its full potential in the past.