Ceará, another untapped Brazilian resort destination

Brazil continues to surprise international hotel groups with its amazing unspoiled resort destinations. Fortaleza, the capital of the state, is the second closest resort destination to Europe, after Natal.

Fortaleza’s Paracuru beach
Fortaleza’s Paracuru beach

Despite its amazing beaches, tourism only represents 13% of Ceará’s GDP, and the penetration of international hotel brands in the region is below the Brazilian average of 8%. Holiday Inn Fortaleza, Ibis Fortaleza and Mercure Fortaleza stand out as the only international flags in the capital. There is a clear opportunity for quality branded hotels in Fortaleza and its surrounding area.

The airport was partially extended during the recent World’s Cup, as 75% of the visitors to the region come by air. The high ADR levels experienced during the matches made extremely difficult traveling there during this period. The Olympic Games are expected to attract additional residual improvements to these levels, in line with the rest of the country.

The leisure-hotel demand generators for Ceará are more than 80% domestic. Travelers come from Sao Paulo and Rio in the southeast and Pernambuco, Bahia and Rio Grande in the northeast. Out of the remaining 20% demand, more than half is generated by Portugal, Italy, Argentina, France and the UAE. Room nights are concentrated in the high season that goes from July to January, with an average stay above eight days.

The potential for an integrated quality resort is obvious. Besides Dom Pedro Laguna Hotel in Aquiraz, a high-quality property with a golf course by Portuguese group Dom Pedro Hotels, there is little else that would contribute to the consolidation of a consistent international holiday stream of demand right now. Such integrated resorts cannot be found in Ceará today. The closest ones are in Bahía, Santa Catarina or Pernanbuco states.

In contrast with the prevalent leisure residential developments with enclosed perimeters and no services for guests and owners, there is a gap in the market for a low-density/low-rise mixed-use resort concept designed with a European style. Some of the services lacking in existing leisure residential developments include supermarkets, restaurants and bars, schools, medical centers and sports centers located within walking distance of the hotels and leisure residential units. The steady growth of the Port of Pecem should guarantee one of the variables of the equation: a local residential demand from the 10,000-plus employees working for the corporations already established near the port.

From a hotel perspective, the low-density location opportunity is clearly north of Fortaleza, away from the higher-density area of Aquiraz and just one hour from Fortaleza’s airport. The area is already well known globally by wind-surfing and kite-surfing fans. The other established tourism enclave there is Jericoacoara, too distant from the airport (186 mi/300 km) to become a volume destination.