The Brazilian Hotel Sector

The Danish Consulate General and the Embassy of Denmark
São Paulo, August 2010

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Table of Contents
1 2 3
3.1 3.2 3.3 3.4

Executive Summary ...................................................................................................................... 3 Brazil’s Economical and political situation ..................................................................................... 4 The hotel sector ............................................................................................................................ 6
Regional trends .................................................................................................................................................. 8 Cruise ships and coast line development ........................................................................................................... 9 Cheap loans for the Brazilian hotel sector ....................................................................................................... 10 Operators in the Brazilian market .................................................................................................................... 12

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4.1 4.2 4.3 4.4

Opportunities for Danish suppliers .............................................................................................. 15
Supplying the growing hospitality sector ......................................................................................................... 15 Demand for green technologies....................................................................................................................... 16 Cruise ships accommodation for the world cup .............................................................................................. 16 Owning and operation hotel chains ................................................................................................................. 16

5 6 7 8 9 10

How to enter the hotel market .................................................................................................... 17 The future of the market ............................................................................................................. 18 Final considerations .................................................................................................................... 19 Appendix A) Current industry events for 2010. All are yearly events............................................. 20 Appendix B) Government Stakeholders and branch organizations ................................................ 21 Appendix C) Introduction to Brazilian business culture ................................................................ 22

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3 . A growing environmental conscience could potentially benefit Danish suppliers that are likely to already have an environment friendly product portfolio at competitive prices. São Paulo and Rio de Janeiro. and the government backed development bank BNDES is offering a USD 600 million line of credit to the hotel sector. the world cup and the Olympic has fueled a wave of new investments and widespread optimism. are without comparison Brazil biggest economic centers. There is demand for all sorts of hotel inventory. Available capital in a sector undergoing structural changes provides opportunities for new suppliers. and coupled with a promising long term forecast the market presents promising opportunities for Danish suppliers. This part of the country remains underdeveloped for now. while international exposure end economic growth are likely to attract more overseas visitors. The hotel sector shows nationwide growth. Whether having a particularly green or regular product portfolio. building materials and knowhow. Green solutions have intrinsic value in being more cost-efficient. Setting up a presence in Brazil is a low cost investment and involves low risk compared to the gains of exposure to the Brazilian market. and growing concerns about the environment adds value from a marketing perspective. The common denominator is investments.1 Executive Summary Brazil is an emerging market with a proven growth potential. The middle class can now to a higher degree afford domestic vacations. The tourism sector is growing and major upcoming events such as the 2014 FIFA World Cup and the 2016 Olympic Games will increase hotel demand significantly. entering Brazil grants access to a growth market with long term potential reaching beyond the 2016 Olympics. New market demand in general and government support has forced investments and changes in the market. Rio de Janeiro and São Paulo. The markets in the south-east. but is mainly concentrated around the north east region. The government is spending billions of USD on infrastructure. The north-eastern part of the country is currently receiving a large share of the capital invested in the Brazilian hotel sector. new hotels are being build and old hotels are being refurbished. Expectations about long term demand are firmly rooted in Brazils growing middle class and the after-effects of Brazils international exposure. The short term outlook is good. Even though they are short term events.

The Brazilian population can be divided into segments depending on the monthly household income levels (table 2.1 Class A&B: Class C : Class D: Class E: Income segments in Brazil + 4808 R$ 1115 . a number which is still well below the potential capacity. Brazil had its largest investment outflow ever – with USD 28 billion.1. Brazilian tourism ministry 4 . and is part of the worldwide trend of cross-border investments by firms from Third-World countries. and it is only quite recently that the international tourism has started to pick up in Brazil. In 2006.4808 R$ 768 . The recent internationalization of Brazilian firms has a different characteristic. The tourism sector in Brazil focuses primarily on domestic tourism which is becoming more and more important 1.2 million international tourists in Brazil per year. Table 2. The Ministry of Tourism was created in 2003. During the 1980‟s the country saw an increase in inward FDI with total investments surpassing USD 2 billion – although still concentrated in a small number of companies and sectors such as the financial sector. There were however exceptions such as Petrobas (oil and gas) and Vale (mining).1115 R$ Under 768 R$ 1 Interview Laércio Roberto Lemos de Souza. oil and gas industry and a few from the manufacturing sector. Among the country‟s largest corporations. There are 5. Recent developments are shown in illustration 2. Along the economical growth Brazil has experienced a large expansion of their middleclass. few had outward foreign direct investment (FDI) activities before the early 1990‟s.1).2 Brazil’s Economical and political situation Traditionally. even when compared with other Latin American companies. authorities have neglected the issue of tourism. Applying a more general perspective. Brazilian firms are latecomers to the international arena.

2 3 4 BCG.1: Recent development in income segments with 2014 forecast 56 % 49 % 37 % 28 % 27 % 16 % 11 % 8% 8% 24 % 20 % E D C 16 % A/B 2003 Source: FGV. but forecasts shows that Brazil will post a 5% growth in 20104. The worldwide economic crisis caused a brief downturn during recent years.2 percent annually from 2003 through 2008 – in the same period foreign investments in the country experienced a 30% increase. Brazil recorded a record number of domestic travelers during 2008 and 2009 in the middle of the worst financial crisis in decades3. Since 2002. a commodities boom has fuelled strong growth and lowered poverty across Latin America.4808 R$. economic growth in Brazil averaged 4. the future optimism is also rooted in the increasing number of small and mediums sized businesses that continue to gain in strength and numbers. the government is undertaking very active social policy schemes within a liberal free market framework. attract investors and headlines. Brazil‟s progress is notable considering that it has far more poor people than any other South American country. and has long been one of the world‟s most unequal countries in regards to income distribution. With Asia‟s rising demand for soybeans. 1115 . The middle class is still depending on cheap goods but it can afford domestic air travel 2. beef and iron ore.Illustration 2. In short. Although Brazil‟s industrial giants such as airplane maker Embraer and the mining company Vale. have entered the middle class segment. The foundation of today‟s success was laid during the Fernando Henrique Cardosogovernment (1995-2002). The forecast for 2014 shows continued growth. DataPopular and LCA Propertybrazil. The country is following what it calls the „middle path‟.com International monetary fund 2010 5 . IBGE and LCA 2008 2014 Since 2003 more than 33 million people in this country of 198 million.

The more developed markets in the south provide good opportunities for niche concepts or more products that require more mature markets. Confederations Cup 2013.gov. Brazil still lacks a more consolidated hotel industry. where the hotels or condo-hotels are developed together with residential. World Cup 2014 and the 2016 Olympics. the market leader in Brazilian business news. financial controllers – among others). As shown in illustration 3.br 6 . Brazil is not expected to face problems regarding the labor force (maids. The difficulties concern hiring skilled professionals (general managers. is forecasting that the country will lack beds for the 2014 world cup in football. The South. have increased year over year since 2005 in all Brazilian regions. waiters. These events are likely to stimulate demand for a larger hotel infrastructure than the present one. Valor Especial. in order to prepare for the two upcoming events. The Military Olympic Games 2011. A lack of infrastructure has held the sector back. and there are highly attractive markets for entrepreneurial projects in underdeveloped regions. South-eastern and Mid-West regions had outstanding performance with more than 10% growth rates in the same period. Current investments in this industry in Brazil are primarily done through hotels. However. corporate towers and/or shopping malls.brasil. Natal and Fortaleza in the north-east lacks the most beds. Indexes such as the REVPAR (revenue per available room). receptionists). but things are set to change as investment will increases over the coming years. Brazil will in the near future host large international events. 5 www. particularly in the northeast.3 The hotel sector The hotel business in Brazil has become increasingly attractive to investors due to increased tourism and promising business growth rates. Brazil is planning on investing USD 11 billion in the hotel sector5. New facilities are being build while older worn down or outdated facilities will have to undertake refurbishment in order to live up to the required standards. condo hotels (condominium based) and mixed-use properties. All in all.1 most cities do not provide sufficient capacity at current levels.

there is a genuine optimistic atmosphere within the Brazilian hotel market. HVS Brazilian Hotel Market Overview 2009/2010 Interview Laércio Roberto Lemos de Souza.1: Hotel beds.5 billion)7. For the year 2010. but it still remains below the country‟s potential. is the expectation of a strong GDP (+5.1 is not taking the 2016 Olympics into account. a stable exchange rate (1 US$ = 1 R$ 1. the number of existing hotels in Brazil is more or less 25 thousand8. the Brazilian hotel industry is undergoing a very positive development. The hotel supply in Brazil has substantially increased in the last few years. Brazilian tourism ministry 7 .Illustration 3. June 2010 This survey linked to illustration 3. Currently. The reason for this. forecasts for the World Cup Source: Valor Especial. FDI for 2010 is projected to be the second highest in history (at US$ 37.80 at year‟s end).35%) on a yearly basis. 6 7 8 The SELIC rate is the Banco Central do Brasil's overnight lending rate. According to an analysis made by the Brazilian Tourist Ministry. and an increase in the SELIC rate6 (11% at the years end).

com/worldcup/brazil2014/destination/cities/index.000 rooms are being constructed and it is hard to tell when the market is saturated. From 2003 – 2007.html The hosting location of the FIFA 2014 world cup can be seen in illustration 3.3 above. There is a growing perception that there will be a large volume of public and private investment in the city. As seen in illustration 3.June 2010 According to Valor Especial the future of the hotel investments will primarily focus on the North-eastern part of Brazil. Illustration 3.2.2 Illustration 3.2% of new investment projects and 83.2 .3 % of the invested capital.fifa. and an increase in hotel demand. 52% of the 35.Hotel investment projects begun in 2008-2011 Source: Valor Especial: Turismo . This perception is based on the following facts:   The co-hosting of the World Cup 2014 The hosting of the Olympic Games 2016 8 .1 Regional trends Brazil is experiencing investments in the hotel sector in all regions as shown in illustration 3.3 – FIFA World Cup 2014 host cities Source: http://www. The north east remains underdeveloped for now – Around 46.3. The city of Rio de Janeiro has attracted extra attention because it is hosting the Olympic Games in 2016. the north-east region already accounts for 48.848 new companies that started in this region were in the business of establishing resorts.

It is estimated that Rio will need 40. the expectations are that the demand for hotels will begin to increase. However. 3.  Expected investments in the Naval.transportation and international commerce sectors The implementation of the 3.5bn-real Porto Maravilha Project renewing Rio‟s port area.2 Cruise ships and coast line development Seven Brazilian harbors will be expanded to accommodate cruise-ships turned into hotels. Mucuripe. São Paulo‟s current market situation is favorable for investors and owners of hotel units in the city. once again reaching 2008 levels. As shown in illustration 3. with the expansion of two floating piers that will house six cruise ships.4. requiring investments of USD 375 million. Santos and Rio de Janeiro. In 2010. With these vessels the city will have an additional 12.petrochemical. the world cup coincides with the lucrative season regular cruise travel which could drive prices up. for the Manaus harbor. the current capacity is expected to be doubled by 2014. Natal. The secondary market of condo-hotel rooms is growing and can prove to be a lucrative way to invest in the city‟s industry during the next few years.000 thousand more rooms to satisfy the demand during the Olympic Games9. In this light foreign cruise ship anchoring at the Brazilian coast could gain market shares from the domestic hotel market. 9 HVS Brazilian Hotel Market Overview 2009/2010 9 . Due to growth in the Brazilian leisure tourism market. At its current valuation. the Brazilian Real is relatively expensive for overseas travelers.. The development of leisure located along Brazil‟s attractive coast line is an interesting option.000 beds during the World Cup. For example. Recife. there are opportunities for domestic tourism products to tap into the demand that is currently served almost exclusively by the cruise and resort market. there is an untapped market high attractiveness and relatively low costs. This strongly benefits dollarized products. São Paulo will also be one of the hosting cities for the World Cup 2014. The Special Secretary of Ports presented specific projects for harbors in Salvador..

The parameters to determine whether national content has been met are among others: Nationality of employees as well as weight.4 – Business opportunity in the cruise segment Source: Diogo Canteras. The estimated USD 600 million is earmarked for renovation and expansion of the hotel supply. The rule of local content applies not only to the finished project. Hotel Investing in Brazil . but it is important to note that BNDES will only provide financing for projects with at least 60% of local content. BNDES does unfortunately not provide loans for international companies. price and volume of materials and so forth. reform. commerce and the service industry as well as in small and medium-sized private businesses. Local presence can be obtained by either creating a subsidiary or by entering into a joint venture with a Brazilian company.3 Cheap loans for the Brazilian hotel sector Since its establishment in 1952. 3. The goal of this action is to finance the construction. The only situation where the rule of local content does not apply is if an equivalent product does not exist in the Brazilian market. is to take into account ethical and environmental principles. BNDES Tourism Program: BNDES has opened a line of credit with attractive interest rates and terms (starting at 6. To determine whether an equivalent product can be found in the national market is a matter of assessment. this company must have an established presence in Brazil. in regards to execution of its credit policy. and has played a significant role in the support of investments in agriculture.Hospitality Net. In effect this means that Brazilian contractors many times will be inclined to choose national sub-contractors over international ones. expansion and modernization of hotels in order to increase 10 . The firm conviction of BNDES. but to any part of the project.Illustration 3. BNDES is firmly committed to the principles of sustainable development. If an international company intends to obtain financing for a project from BNDES. the government backed development bank BNDES has financed large-scale industrial and infrastructure projects.9% in up to 18 years) to Brazilian firms in the hospitality sector.

Beneficiaries should be enrolled in the Ministry of Tourism‟s Brazilian database for tourist services (CADASTUR) and provide evidence that their project is enlisted in the Hotel Classification System in effect at the Ministry of Tourism. The scheme operates with the concepts of Standard Hotel. companies have to be headquartered and administered in Brazil. As of mid august 2010 ProCopa Tourism is considering 63 projects. Energy Efficient Hotel and Sustainable Hotel. but will now have extra funds to benefit all 12 host cities for the 2014 World cup.asp 11 . Different rules apply for each category. http://inter. The BNDES ProCopa Turismo offers financial support through subprograms divided according to hotel certification.gov. Conditions for eligibility: In order to gain access to credit. Clients applying for the BNDES fund have to submit their applications by the 31 st of December. The program offers special financing conditions for hotel projects certified for sustainability or energy efficiency. 2012. In order to obtain the maximum term of loan expansion (12 or 18 years) bidders should submit sustainable construction certification which. The program offers funding to tourism projects throughout Brazil.the capacity and quality of accommodation for the 2014 World Cup.bndes. besides energy efficiency also incorporates rationalization of water and waste management.br/english/procopa_turismo_in.

Merure.com Hyatt will focus their expansion efforts on under-penetrated markets such as Brazil. http://www1. There are currently 466 rooms and suites.solmelia.com Sol Meliá No openly announced plans Hyatt Grand Hyatt Sao Paulo is a 5-star hotel located on Avenida das Nações Unidas. three in Brasilia and two others in Campinas and Angra dos Reis.com. among others. Furthermore the chain is remodeling 31 of their 65 Mecure hotels and eight of their 51 Ibis hotels.809 rooms. Hilton There are two Hilton Hotel & Resorts.4 Operators in the Brazilian market Hotel Accor Current market position Accor is the main international operator and the 2nd largest hotel chain globally.com www. The hotels are under the brands: Ibis.3. They see their presence in Brazil as a potential platform for future growth. http://www. This will be achieved through the expansion of their 20 Formule 1 and Ibis hotels. http://www. which are targeted at economy class tourists.com One project in the pipeline for Salvador.com/ This Spanish hotel chain currently owns 14 hotels in Brazil.grsa.br Investment strategy The company is planning to build 85 new hotels in Brazil in the period up to 2015. Sofitel. The company is planning to build 28 additional hotels.hyatt.atlanticahotels. in Sao Paulo. www. Atlantica The hotel chain currently operates 72 hotels in Brazil http://www. One in São Paulo and one in Belem. nine in São Paulo. Novotel. It currently operates 144 outlets throughout Brazil with 22. 12 . Formule 1. (around 5000 rooms) with an investment of more than USD 250 million.accorservice.hilton.

Hoteis Othon The Othon Hotel group offers more than 5.bluetree.br So far Blue Tree has 6 hotels in the pipeline located different places in Brazil. Porto Alegre.com In addition to its hotel portfolio. http://www.hoteis-othon.Marriott Currently Marriott International offers four hotels in Brazil. Marriott International Inc. all to open within 2012.4 million acres (589.000 hectares) of endangered rainforest in the Juma Sustainable Development Reserve. Joinville. Brasília.com. two in São Paulo. http://www. Blue Tree Blue Tree Hotels has 22 hotels and resorts in operation: São Paulo (9 hotels).com. one in Rio and Marriott Executive Apartments in São Paulo which has 114 apartments. helping to protect 1.marriott. Recife. the beach resort Blue Tree Park Cabo de Santo Agostinho (in Pernambuco). has recently opened a development office in São Paulo. Florianópolis. http://www. Marriott International recently announced its partnership with the state of Amazonas in Brazil.000 rooms in more than 40 properties. Curitiba. as a part of an overall global restructuring to focus on growth in emerging markets.br No openly announced plans 13 . the beach and mountain resort Blue Tree Park Angra dos Reis (in Rio de Janeiro) and the Blue Tree Park Brasília.

four and five-star categories.orient-express. located in Rio de Janeiro and Hotel Cataratas in Iguazu Falls.com www. Crowne Plaza. (15 owned by BHG) Operation properties in the three. Salvador da Bahia (5-star).A. www.com/ Portugal‟s Pestana Group is a likely candidate for credit lines issued by BNDES.ichotelsgroup. The Company plans to take advantage of the cultural diversification in the country and in South America as a way to attract all types of business tourists and to reduce the seasonality risks.com 14 . http://www. Brazil Hospitality Group is one of the largest hotel groups in Brazil.pestana. They manage 31 hotels. Natal (5-star). Holiday Inn Express and Staybridge Suites.ihgplc. focused on the luxury end of the leisure market. Holiday Inn. which was reopened in 2009. Curitiba (4-star business hotel). www.investtur. There are six new projects in pipeline. as it manages nine hotels in six of the 12 World Cup 2014 host cities Orient Express Orient-Express is a hotel and travel company. The group operates 12 hotels across Brazil. two Holiday Inn hotels and four new Holiday Inn Express hotels InterContinental Group The Brazilian subsidiary of the Intercontinental Hotel Group is holding a number of recognized brands in the Brazilian hotel industry. Its units are. among the brands are: InterContinental.com/ BHG invests mainly in large urban centers oriented towards business tourism. Pestana São Paulo Hotel & Conference Center São Luis de Maranhão http://www.Pestana Pestena operates seven hotels in Brazil: 5 star Rio Atlantica Hotel Angra Hotel( 30 luxury individual bungalows).com No openly announced plans BHG S. Copacabana Palace. Salvador (5-star).

the middle class is growing in numbers and can afford domestic travel as mentioned. In the short term. The Hyatt group currently only has one hotel located in São Paulo. The current hotel supply is too low to accommodate for World Cup travelers and many hotels need to be upgraded in order to live up to FIFA standards and expectations from overseas travelers. 10 Nain & co. The domestic market is growing and the publicity generated from the upcoming events is likely to boost international tourism to Brazil. Setting up a presence in Brazil is a long term investment that goes beyond the world cup and the Olympic Games. but it is also provides hotels with the opportunity to find a new supplier that meet the exact requirements of their business. Accor. The biggest group in Brazil. the domestic tourism market is growing. This easy access to credit gives the hotel sector an incentive to expand and renew. In a long term perspective. New construction and refurbishments not only require big orders. Coupled with a positive economic outlook. while the publicity generated from the upcoming events is likely to boost Brazil‟s international reputation as a tourist and investment destination. This in all provides a positive outlook on the market opportunities for Danish suppliers. The world cup in 2014 and the 2016 Olympic Games are events that will generate short term demand for the hotel industry. LCA and Roland Berger 15 . new construction and refurbishments causes a spike in demand for industry grade furniture. the structural changes imposed by the World Cup and the Olympic Games provide a good opportunity to enter the market. has announced plans to build or develop 85 hotels – an USD 250 million investment. Suppliers that successfully enter the Brazilian market are in a good position to capture some of the current demand and position themselves in a promising growth market. Engaging in export or setting up local production will allow Danish exporters to capture growth well beyond 2016. As previously mentioned BNDES provides an estimated USD 600 million line of credit to the hotel sector under favorable terms. fixtures and equipment. Forecasts show a 77% rise from 2008 to 2014 in the amount of domestic air travelers10.4 Opportunities for Danish suppliers 4. but see their presence in Brazil and emerging markets as a growth platform. Looking beyond the World Cup.1 Supplying the growing hospitality sector The hotel sector in Brazil is currently growing at a fast pace. If Danish suppliers can provide sustainable solutions for the Brazilian hotel sector. BCG. suppliers can therefore expect a steady demand in the long run..

Danish suppliers can potentially win bids to provide some of the hospitality structure needed in order for the ship to function as hotels. Almost half of the Brazilian landmass is covered by the Amazon and the public is becoming increasingly aware of the environment.000 hectares) of endangered rainforest in the Juma Sustainable Development Reserve.4 Owning and operation hotel chains The Brazilian hotel market is growing and is showing signs of long term sustainability. This could mean tough competition for new entrants.4. hotels require complete solution for their properties. helping to protect 1. Following this lead. The BNDES ProCopa Turismo favors green investments and operates with the concepts of Standard Hotel. Overhauling whole properties grants the operator with the choice to install new fixtures. The world cup and the Olympic Games have forced changes in the hotel sector. or create markets. Investments are pouring into the hotel sector and the internal competition is likely to increase. On the other hand.4 million acres (589. which might result in an industry consolidation. The Brazilian awareness of the environment precedes the world cup. for the construction of energy efficient buildings. technologies and suppliers. seven Brazilian harbors are planning to expand capacity in order to accommodate for cruise ships during the world cup. but the structural changes caused by the event help to expose the market to new ideas. Other Brazilian operators have schemes similar to the one of Mariott. Danish suppliers could potentially tap into.2. Marriott International recently announced its partnership with the state of Amazonas in Brazil. The industry already accommodates a lot of big domestic and foreign chains seeking to expand market share. the demand for hotel rooms is likely to grow in the future. Owning and/or operating hotel chains can prove lucrative but it is not without risk. improved insulation materials etc. green refurbishment solutions. going green is also valuable from a marketing perspective. Danish exporters are likely to have a product portfolio that focuses on being energy efficient and to have expertise in providing green solutions. there are also opportunities for companies willing to provide onshore accommodations catering for the same segment. Apart for the obvious cost savings. 4. Energy Efficient Hotel and Sustainable Hotel. Brazilian authorities have projected investments of USD375 million in this area. 4.2 Demand for green technologies Denmark is known for green solutions. Green policies are becoming more and more popular. intelligent lightning etc. With new construction and refurbishments. 16 .3 Cruise ships accommodation for the world cup As shown in sector 3. better insulation.

17 . fixtures and equipment / Subcontracting to new construction and refurbishments. CAPITALIZE ON THE DEMAND FOR GREEN PRODUCTS Subcontract to big chains / Provide green solutions for new construction or refurbishment projects. Finding suitable partners and contractors / Market research. Cultural differences / High level of fixed assets equals high risk. OWNING AND/OR OPERATION HOTEL CHAINS Obtain a presence in a growing market. Finding suitable partners / Assisting with contracting and standard compliance. which can slow down the set-up process. A low level of fixed assets equals low risk / Spike in demand leading up to the world cup / An established presence can lead to more orders in the future. full ownership over process. Political decisions may change / Inefficient and expensive customs system. Monitoring the competitive biddings SUPPLYING CRUISE SHIP INFRASTRUCTURE Ownership over the process / Specific contracts. Make a competitive proposal to port authorities that meets the requirements Joint-venture with suitable partner or Greenfield investment Inefficient and expensive customs system / Need for compliance with Brazilian standards. Bureaucratic process. Danish companies are likely to have a competitive advantage in green technologies.5 How to enter the hotel market WAY ADVANTAGES DISADVANTAGES EMBASSY/ GENERAL CONSULAT E ROLE Assisting with the setup of a local office / Advice on contracting/ Finding potential clients SUPPLYING THE BRAZILIAN HOSPITALITY SECTOR Set up Brazilian office to supply furniture. Language barriers often include the need to hiring local personnel.

11 Preuss. However. This may create an oversupply of hotel rooms after the Olympics. 18 . In the long run. such an image change could boost international tourism in Brazil.6 The future of the market There is a risk of overestimating the Olympic Games impact on tourism. The anticipated image change and improved infrastructure after the Games are projected to lead to an increase in incoming tourists. IHG aims to offer affordable luxury for Brazilian and foreign tourists. seven large international hotel chains. can potentially result in disappointing off-season occupancy rates. including three of the world‟s four largest. along with general economic optimism and great expectation about the Olympic Games. But with Brazils growing middle class and its economy‟s positive track record there is a justified optimism in the tourist sector that reaches past 2014 and 2016. So far IHG operates two Holiday Inn hotels in Brazil. Demand for hotels and accommodation is expected to be consistent and high. and real estate has shown appreciation despite the anxiety generated by the global economic meltdown. Brazil was the first of the mayor BRIC countries to emerge from the global recession. which has positive effects for employment. mainly under the brand name Holiday Inn. Many of the incoming tourists change their perception of the host country. The goal is to administrate 50 hotels in Brazil in 2020. in Manaus (the Amazon region) and in São Luis in the Northeast. the world‟s largest hotel-chain Intercontinental Hotels Group (IHG) have faith in the Brazilian market. a relatively cheap-end hotel chain. Holger “Aspects of Olympic Games Tourism” Johannes Gutenberg-University Mainz. Brazil is showing strong currency forecasts for 2010 and the GDP expected to grow by 5% in 2010. generated income and tax revenues. According to recent studies made by Research Team Olympia11 the Olympic tourism legacy is largely positive. A burst of demand for hotel rooms related to the Olympic Games often leads to the construction of excess capacity. in the long run demand is expected to rise again due to increased awareness of the city or region. Applying an international perspective. Since 2008. have set up projects in Brazil. Excess investments driven by the world cup 2014.

The widespread optimism in Brazil and the hotels sector in particular provide a good opportunity for Danish firms to establish and expand positions in a market that is likely to grow. Rio de Janeiro and São Paulo are the main international gateway markets. fridges. For further information. Suppliers of furniture.7 Final considerations This study has been done by the Commercial Department of the Danish Consulate General in São Paulo in cooperation with the Danish Embassy in Brasilia. These areas can support new investments from branded budget to luxury properties. The mid-market segment is underserved and provides significant opportunities for foreign investors. As Brazil will be the host-country of both FIFA World Cup 2014 and the Olympic Games 2016. Even though the WC and the OL are limited to a relatively short period of time. Danish suppliers will have an excellent opportunity to enter the hotel industry. please contact: Consulate General of Denmark in São Paulo Jimmy Olsen Phone: +55 11 2127 0750 E-mail: jimols@um. there will be demand for foreign suppliers of goods and know-how. The North-east. Establishing a presence in Brazil has long term potential that reaches far beyond the end of the Olympics in 2016. With substantial amounts of governmental and private investments pouring in to the hospitality sector. The great expectations for the Olympic Games and the world cup do not only concern the hotel and tourism sector. as well as for commercial assistance.dk 19 . electronic equipment and textiles such as towels. televisions and other items will be affected by the increased demand caused by both the Olympic Games and the FIFA World Cup. they play an important role in putting Brazil on the world map.

2010 International Trade Show of Equipment. The conference attracts major players in the Brazilian hospitality industry and participants come from all over South America. Bars. SAHIC is an annual event.8 Appendix A) Current industry events for 2010. Restaurants.16. 2010. Flat Services. Food and Beverage to Hotels. SAHIC is a meeting place for private and public authorities. Fast Food Restaurants. All are yearly events. Snack Bar. 20 . A South American Hotel & Tourism Investment Conference held in the city of Cartagena de Indias – Colombia. investors and developers from the most important hotel chains expounded on the opportunities of the region as regards hospitality and tourism. Products. Equipotel is an annual event. Food Service Industry and Laundries. September 27-28. August 17-19. Motels. Services. 2010 Conotel is a conference on the hospitality business. Conotel is an annual event. September 13 .

The tourist sector provides Brazil with jobs for people with a low level of education and brings in foreign currency. the National Federation of Hotels. SEBRAE: The Brazilian Service to Support Micro and Small Enterprises. Sebrae is partnering with Brazilian entrepreneurs with insufficient cash to start up their own business. Its aim is to make the Brazilian tourist sector economically sustainable. Associação Brasileira da Indústria de Hotéis (ABIH): The Brazilian Association of Hotels is a non-profit branch organization. By fostering tourism activity Embratur is making feasible the conditions for the generation of jobs. marketing and supporting to the trading of services. Industry and Foreign Trade. income and development throughout the country. Bares e Similares (FNHBS): Founded on 23 September 1955. 21 . Federação Nacional dos Hotéis. and tourists destination of Brazil abroad. Restaurants. products. Ministry of Tourism (MTur): The Ministry of Tourism was established in 2003. It is a federal state owned agency reporting to the Brazilian Ministry of Tourism. The objective of BNDES is to provide long-term financing for projects which contribute to the development of the country. Sebrae was created in 1972 as result of a pioneer initiative of institutions that encouraged entrepreneurship in the country. Bars and Similar.9 Appendix B) Government Stakeholders and branch organizations BNDES: The Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social – BNDES) is a federal public company associated with the Ministry of Development. Embratur (Instituto Brasileiro de Turismo): Embratur is also known as the Brazilian Tourist Board. It works exclusively on the promotion.

In Brazil. 22 . is common. they exchange kisses by placing their cheeks together and kissing the air. Music and long. informality. restaurant entertainment prevails over home entertainment. Handshaking. when leaving a small group. However. Some regions have casualness about both time and work. interruptions viewed as enthusiasm. Giving a gift is not required at a first business meeting.10 Appendix C) Introduction to Brazilian business culture Brazil is a big country home to a variety of different cultures. When conversing. Business meetings normally begin with casual chatting. instead. but titles are important. animated conversation are favorite Brazilian habits. though minor delays are accepted. and friendships. Avoid improvised calls to business or government offices. Let the host decide when it is time to talk business. use good eye contact. When women meet. buy lunch or dinner. Brazilians enjoy joking. Shake hands for hello and goodbye. when doing business in Brazil a few general rules of thumb apply:           Be prepared to commit long term resources (both in time and money) toward establishing strong relationships in Brazil. This is the key to business success. be sure to shake hands with everyone present. First names used often. often for a long time. In São Paulo and Rio De Janeiro business meetings tend to start on time. Make appointments at least two weeks in advance.

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