BRAZIL South America’s leading economy has emerged relatively unscathed from the global financial crisis, and the same can be said for Brazil’s hotel industry, which coped better than surrounding regions during 2008 and 2009, according to data from STR Global.
The country’s resiliency is due in part to a strong domestic market that has not been adversely affected by moderate increases in ADR. However, more significant ADR hikes in U.S. dollar terms would undoubtedly influence arrivals from the United States, which is Brazil’s second most important source market, after neighboring Argentina.
Brazil’s RevPAR showed a continued upward trend, despite a dip during 2006, and negligible improvement during 2008 and 2009. São Paulo followed this national trend to a similar pattern, albeit at a slightly lower level. Rio de Janeiro’s significantly higher RevPAR reflects a shortage of supply resulting from the restricted development opportunities in a city where new sites with ocean views and finance are equally limited. Rio’s slightly more erratic performance also showed a positive recent trend.
STR development data indicates there are 53 projects comprising 7,400 in various stages of development in Brazil as of August. “This a modest total for such a large market, and it will be interesting to see if this figure rises significantly in light of the forthcoming football World Cup and Olympics,” says Elizabeth Randall, managing director of STR Global. “São Paulo seems to have a good level of supply at present, but development in Rio de Janeiro might be curbed by a push to use cruise ships for temporary accommodation during these large events.”