In the run up to the 2014 FIFA World Cup and 2016 Olympic Games the Brazilian Government and Ministry of Tourism have been actively supporting the growth of the country’s hotel capacity, including through fiscal incentives such as tax breaks.
Margarida Caldeira, Director at global architecture, urbanism and design practice Broadway Malyan, comments on the trends and ongoing opportunities:
“Rio de Janeiro’s mayor Eduardo Paes introduced legislation back in 2010 with the goal of adding 8,000 hotel rooms in the city, while in 2011 Recife’s mayor at the time, João da Costa, offered similar incentives. In other cities such as Belo Horizonte, the capital of Brazil’s inland mining state of Minas Gerais, hotel construction has been encouraged despite the region’s relatively low occupancy rates.
“However, in our own experience there are still significant opportunities for developers and operators to build new hotels outside of the main centres of São Paulo and Rio de Janeiro, as well as to retrofit existing hotels in Brazil’s major cities.
“We believe that two of the main obstacles to the growth of the Brazilian hospitality sector are the lack and high cost of skilled labour – in both the construction and operation of hotels. As in China and India, developers and operators need a two-pronged approach – drawing on skilled management expertise from both overseas and within Brazil, and developing a skilled local workforce through specialist training.
“Historically, only around 15 per cent of hotel guests in Brazil are from overseas, which is often attributed to the long flying times from other major destinations, as well as the difficulties faced by US business travellers in securing visas at short-notice. This means that beyond the World Cup and Olympics the future profitability of hotels in Brazil will depend on domestic demand.
“While traditionally Brazilians haven’t travelled very much, domestic demand for hotel rooms has sustained the industry and grow it at a steady rate of around 10 per cent over the past few years.
“However, with Brazil’s emerging middle class it’s expected that by 2020 another 50 million Brazilians will enter the tourism market – and with only a single ‘branded’ hotel room per 2,800 people it’s clear that there’s a huge opportunity for established international brands in the market.
“South America is a key region in our practice’s international growth strategy, which is aimed at enhancing our global reach, exporting our world-class skills, expertise and experience and positioning our expert designers to partner and support clients across emerging markets.
“On the back of our long-established presence in Portugal and Spain, the platform for shared cultural and linguistic connections in South America, our expert designers opened our studio in São Paulo in 2011.
“On the back of a 600-bed hotel scheme, our local team has since supported a buoyant national Brazilian hospitality sector – which is partly down to the World Cup – and we’re confident that the sector will go from strength-to-strength with Rio set to host the Olympic Games in 2016.
“Today, our teams are designing a wide range of projects in the hospitality, retail and masterplanning sectors, as well as others, across Brazil – and together with our team in Santiago, Chile, we’re delivering projects across the region and in counties including Argentina, Chile, Colombia and Peru.”
Pictured – Broadway Malyan’s masterplan vision for Convida Suape, near Recife in Brazil, which involves the transformation of a 470 hectare area to create a new city for up to 100,000 inhabitants. The project is seeing our team helping to ease chronic urban over-crowding and we aim to set a benchmark for strategic urban development in North Eastern Brazil – one of the fastest growth areas in the world.
Distinguished by its global reach with 16 studios across world centres, unrivalled diversity with 500+ design experts and distinctive client focus with over 75% income from repeat business, Broadway Malyan creates world-class and fully-integrated cities, places and buildings to unlock lasting value and deliver a ‘return on design’.