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Rio: the Cariocan fervor

The entire Marvelous City is preparing to experience two planetary events that will cast the Brazilian capital more in the spotlight: the FiFA World Cup in 2014 and the Olympics in 2016. International hotel groups are trying to reinforce their implantation and while we expect to have 7,000 additional rooms by 2016, the city’s dynamism and the tourism potential should make it possible to easily absorb this capacity.

October 2, 2009 will remain in the minds of the Cariocas forever. On that day in Copenhagen, the IOC awarded the organization of the Olympic Games in 2016 to Rio de Janeiro. “This decision places Rio in the position it deserves, that of a global city that will seduce the entire world,” affirmed Carlos Roberto Osorio, secretary general of Rio2016, on the day of the election. In this long distance race, the Marvelous City succeeded in outstripping Chicago, Madrid and Tokyo. And the historic parallel with the Japanese capital could be likened to a baton relay. In 1964, the Olympics in Tokyo had marked the Japan’s accession to the international scene as part of its “economic miracle”. Will Rio, forerunning city of a nation in full growth swing, reproduce the same schema fifty years later,as a symbol of the change in era for the city and the entire country? Brazilians hope so and the enthusiasm should gradually grow between now and August 5,2016 with an important stage in 2014 when Rio will be in the spotlight with the FiFA World Cup.Less than a month after the decision of the Olympic committee, Rio set to work. The first stone in the redevelopment plan for Praça Maua was laid. This worksite is part of the vast Porto Maravilha project. This revitalization or the port area involves renovating historic buildings and the opening of the Museo do Amanha, an interactive museum designed by Santiago Calatrava, should constitute some of the key legacies of the Games. This urban redevelopment will have the merit of repositioning a central area in the somewhat abandoned heart of the city. The old docks will become one of the main places for activities during and especially after the two weeks of games as the 30,000 sq.m will be used for leisure purposes with bars and restaurants. Not far from there, the mythic Maracana stadium closed its doors to prepare for three highpoints that will place Rio at the center of attention: the finale of the World Cup and the opening and closing ceremonies of the Olympics. Works will take three years and 347 million euros to improve the space and surrounding areas.Further West, Barra da Tijuca will also receive a facelift. This neighborhood will be the lung of the future Olympics with the village and Olympic Park. Barra willconcentrate the accommodations for athletes and media as well as most of the sports installations outside the Olympic Stadium Joao Havelange, to the North. To facilitate the lives of competitors and tourists expected, $5 billion will be invested to optimize public transportation with the complete renovation of the tram system, a new metro and three new rapid bus. At the same time, the Galeao – Antonio Carlos Jobim airport will see its capacity grow to 25 million passengers. In order to welcome tourists under the best conditions, Rio will work to eliminate a major problem: security. This delicate point issue in a city where social disparity is high will see the number of policemen grow from 38,000 to 54,000 and should benefit from a national plan worth $3.5 billion, alreadyin place and that will last until 2012. This metamorphosis of the city opens new opportunities for hotel groups. Because Rio, wedged amongst many hills and the Southern Atlantic, leaves little room for development. Its Southern area is of course the most crowded. The cream of the hotel industry crowded at the edge of its celebrated beaches. In Copacabana, the shores of the Avenida Atlantica are just a long row of properties, including the emblematic Copacabana Palace (Orient Express), the JW Marriott and four hotels belonging to the Brazilian group Windsor Hoteis and six Othon Hoteis properties. Sofitel thrones proudly and the intersectionwith Ipanema, this second mythical beach that is also home to a Mercure, the Caesar Park and the new fashionable hotel designed by Starck, the Fasano. A little bit further, towards the Leblon section of the beach, the InterContinental and the Sheraton close one of the longest alignments of hotels in the world.Some groups succeeded in having a double shot such as the Portuguese group Pestana with its Atlantica on Copacabana and Rio Palace at Ipanema, a hotel that has been closed for nearly 6 months for works. “We will invest 15 million dollars to modernizethe hotel and reposition it on a higher segment,” explains Dionisio Pestana. Golden Tulip, thanks to its partner Brazilian Hotel Group, placed its brand on 4 properties on or near the two beaches. Faced with such well-established competition, places in the sun are increasingly rare. “Areas in the South and, to a lesser extent in the Center, are saturated. At Copacabana, there few pieces of land available, thus the only solution, costly and complex, is conversion and renovation of existing properties,” explainsRoland de Bonadona. This is why the general manager for Brazil for Accor is looking carefully at the neighborhoods in expansion: “we are examining severalprojects in Barra. The land is sought after, but a new hotel supply can be developped in that sector.”As the World Cup approaches, and then the Olympics, hoteliers are no longer hiding their ambitions for development. Accor, which will have 9 hotels in Riofrom August after the opening of a Novotel, plans to further develop its brand portfolio where Pullman is the only one missing. “Two Ibis, the first in Botafogoand the other at Copacabana, two streets off the beach, will open soon. And other negotiations are well-advanced. Our goal is to have at least fifteen or so properties ready for 2014 while waiting for others to open in 2016,” reveals Roland de Bonadona. Faced with major deadlines in the South American city, Anglo-Saxon groups are in the starting blocks. IHG, Marriott, Starwood, Hyatt, Four Seasons, Jumeirah are in the ranks to play an active role. And it would be surprising if Hilton, the official partner of the American team, were not seduced by the idea of completing network already begun in Sao Paulo and Belem.Other projects are well advanced, however. The Gloria Palace will reopen its doors thanks to the attentions of the Brazilian billionaire Eike Batista whobought this escheated hotel in 2008 for 32 million euros. Built during the same period as the Copacabana Palace and by the same French architect Jean Gire, this neoclassical property in the Gloria neighborhood will regain its former luster at the end of 2011. And from the heights of the Corcovado, the statue of Christ the Redeemer will soon be able to assist another resurrection thanks to Marcelo Limirio, another local magnate. The Hotel Nacional, designed by Oscar Niemeyer and closed in 1995 further to the bankruptcy of its owner Interunion Capitalizacao, will soon be able to host guests. The 34 m tower, that has seen the likes of Michael Jackson and Miles Davis, was bought for 85 million reals, or more than 35 million euros, after a first auction starting at 118 million reals was cancelled for lack of candidates. Its reopening isscheduled before the beginning of the World Cup.According to the Brazilian hoteliers association, ABIH, the size of the Cariocan should surpass 27,000 rooms for the opening of the Olympics as compared to20,000 today. With all these changes going on the question that arises whenever there are major sports events returns: do so many new buildings need to be built for a temporary event? The response to this question is usually negative. But in the case of Rio, it could prove to be positive. According to several observers, the Cariocan inventory needs to be filled out. For the Olympic games in 2016, the FIA (Fundação Instituto de Administraçã) is counting on 380,000 foreign visitors during the period for tourism revenue estimated at 152 million dollars. Faced with this influx of clientele, the Olympic committee already took precautions by blocking 13,000 rooms, while six cruise ships will temporarily provide 8,500 rooms.But a promising future should make it possible to absorb the new hotel capacity. Today, Rio is already the key destination on the southern hemisphere with 2.82 million international tourists. Despite the city’s distance from source markets in North America and Europe, this figure could continue to grow. In light of the two major sports events that will take place in the country, the tourist office Embratur will begin a major tourism advertising campaign with a goal to doubling the number of arrivals in the country by 2020. And as the Marvelous City is the must stop on any tourism circuit in the country, it should the first to benefit from this positive surge. It is a real plus for the city qui that can also count on steady growth of domestic and regional tourism.With its Sugar Loaf Mountain towering over it, the natural beauty of the city is legendary and tourist from the Northern hemisphere adore finding themselves in this picture perfect landscape, particularly during winter holidays or the Carnival with the city living to the rhythm of the samba. But the city’s tourism offers are not limited to the samba-Copacabana-caipirihna triptych. It is also a major business destination. While Rio lost a great deal when the capital was moved to Brasilia in 1960, the city remains the second economic pole in the country, after Sao Paulo. The regional and national headquarters of many banks, Rio is the Brazilian media and audiovisual production center. And thanks to the proximity of many industries and the recent discovery of oil reserves in the State of Rio, the city of over 11 million sees many business travelers passing through. And its tourist appeal makes it the dream destination for organizing many incentives.The possibility of taking advantage of many sources of clientele: this is the strong point that seduces hoteliers. And that explains why the destination continued to post “the best results in Brazil with the best ORs and the best average daily rates for a long time,” observes the young president Dionisio Pestana.Compared with most Brazilian cities with mostly business clientele and that are experiencing occupancy problems ion weekend, the Cariocan hotel business is relatively homogeneous. This offers fine hopes for the future, whereas Rio still plans to develop a strong segment: the congress segment. The city lags behind Sao Paulo, the first destination on the entire continent, the United States included. However, the work of its convention bureau and the development of new, state of the art infrastructures for the Olympics should drive the destination’s appeal further.

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