The WPJ
Vacation Real Estate News
Brazil's Hotel Industry Remained Unscathed from Global Financial Crisis
According to data from Smith Travel Research (STR), Brazil emerged relatively unscathed from the rigours of the global financial crisis and the same can be said for the country's hotel industry, which coped better than surrounding regions during 2008 and 2009 calendar years.
The country's resiliency was due in part to a strong domestic market that was not adversely affected by moderate increases in average daily rate (ADR). However, more significant ADR hikes in US$ terms will undoubtedly influence arrivals from the United States, which is Brazil's second most important source market after neighbouring Argentina.
Year on year percentage change for year to July 2010
Brazil's revenue per available room showed a continued upward trend despite a dip during 2006 and negligible improvement during 2008 / 2009 (as seen in the graph below). Sao 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.
Annual RevPAR performance 2004 to July 2010 (Brazilian Reals)
The Central and South American Pipeline report from STR Global for August 2010 shows 53 projects with 7,400 rooms in all planning phases (under construction, final planning and planning).
"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", said Elizabeth Randall, managing director of STR Global. "Sao 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".
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