Hosting economic growth

RIO DE JANEIRO, Brazil - In a two-year period, Brazil was chosen as the venue for two of the world's biggest sporting events: the 2014 World Cup and the 2016 Olympics. Rio de Janeiro, which is expected to hold the World Cup final and will be the host city of the Olympics, already is feeling a positive impact in the tourism and real estate sectors from landing the athletic events.

Paulo Senise, the executive director of the Rio Convention & Visitors Bureau, believes tourism will increase 10% in Rio in 2010 as a result of Rio's international profile's being raised because the city was chosen to host the World Cup and Olympics.

"The growth rhythm will continue in the following years, which will stimulate a series of services, including the offering of direct flights to Rio and the extension of the hotel sector," Senise says. "There will be more employment, larger income and social stability, not to mention the reflection on the financial section."

In 2008, more than 1.5 million tourists visited Rio, according to data from Rio de Janeiro's tourism secretariat. The United States sends the largest number of visitors, followed by Argentina and France.

This summer season alone (January to March) is expected to bring about 2.5 million visitors to Rio, with 20% arriving from outside Brazil. Brazil is expected to make about US$8.1 billion in tourism revenue, according to the secretariat.

The city expects to make US$7.1 billion based on the 79,000 tourists who are expected to arrive for the 2014 World Cup. But that pales in comparison to the US$17.8 billion the secretariat claims the city will make when an expected 196,000 visitors descend upon the city for the Olympics two years later.

"I have total confidence in the success of the Olympic project in Rio, which will be an even better destination in 2016, as much for the cariocas (locals) as for the tourists who will visit us," says Antonio Pedro Figueira, the secretary of tourism and president of Riotur (tourism company of Rio de Janeiro).

Jeanine Pires, president of Embratur, a federal-owned agency that reports to the Brazilian ministry of tourism, says that the budget to promote Brazil's tourist attractions may reach R$190 million (US$102 million) by 2020.

Real estate also is thriving. A study by the ministry of sports reveals that among the 55 economic sectors that will earn more revenue because of the development that's needed to host the two major events, civil construction, with a 10.5% increase, leads the pack, followed by the real estate services and rent (6.3%).

Rental prices in the areas where the Olympic facilities will be located should increase from 20% to 30%. Properties in neighborhoods where competitions will take place, such as Barra da Tijuca, Deodoro, Maracanã and Copacabana, may see their value double, according to Secovi Rio, a real estate union.

It means the rent for a one-bedroom apartment in Copacabana, which now costs about R$1,000 (US$537) a month, may exceed R$1,300 (US$699). A two-bedroom apartment in Barra da Tijuca, which sells for about R$309,000 (US$166,000), may cost R$600,000 (US$322,580) in the near future.

"Rio will start to attract even more investments, increasing business in the scope of trade and real estate services," says Pedro Wähmann, Secovi Rio's president.

The market for seasonal housing, in which renters pay to use a house or apartment for only the duration of an event, also will be much more expensive.

"We cannot forget that the area of the Pier, downtown, is [an] object of great expectation, since the city hall is developing a project of renovation and infrastructure called 'Porto Maravilha,, with a budget of R$140 million (US$75.26 million), which will certainly [increase the] value [of that area] very much," says Pedro Carsalade, president of Abadi (Brazilian association of administrators of properties).

http://infosurhoy.com

<< back to Company News