Olympics are kicking off in Rio – what is the scenario for hospitality?

Global Politics and Hospitality

The Hotel industry in Brazil is welcoming the great opportunity that a sports event like the Olympics is bringing to the country in terms of profits, prestige and growth.
Yet, the current political scenario in Brazil is not playing in its favour. What are the attended results for hospitality businesses on this year’s Olympics?
According to hotel-research firm STR, Rio de Janeiro had 27,137 hotel rooms in June, 37% more than it did four years ago. Quartz also reports that the real lodging stock could be even higher because those figures don’t include hostels, Airbnb offerings and some smaller properties.
Brazil in fact expects to welcome up to 500,000 tourists during the Games which the authorities hope will spend $1.7bn (£1.3bn) in the country (BBC News).
Yet, a recent survey of travel agents showed that 63% had seen less interest in these Olympics than in previous destinations like London and Beijing, with 88% stating that they had not seen an increase in interest in traveling to Rio for the Games (International New York Times). This is particularly worrying for Brazilian society that following the World Cup, saw a new economic opportunity into the Rio Olympics.

At the same time, public investments have been huge. In May, the Wall Street Journal reported that the state of Rio was behind schedule on a 9.77 billion reais ($2.71 billion) subway extension, important to transport for the Games.

Yet tourists, especially the international ones, have been sceptical about alternative forms of accommodation such as Airbnb. Airbnb won a bid to become the “official alternate accommodation service provider” of the 2016 Olympic Games, yet that did not help them to be as successful as expected. It has been reported that the leading group of guests using Airbnb during the Games, are in fact from Brazil, which is a shift from what occurred during the World Cup, where only 6% of bookings came from domestic travellers. There is certainly a link between the security concerns and such scenario. The government has put in place measures to strengthen national security, by deploying extra personnel in the streets of Rio.

Many problems caused by politics, health and security concerns are certainly creating some interesting space for debate on what makes a city hospitable for an important event such as the Olympics. In order to trigger some positive message, Rio 2016 organizers launched a hasty plan to combat low attendances, and the unattractive prospect of swaths of empty seats, by revealing it will give away 240,000 free tickets to underprivileged local children. This will certainly not solve the problem but it will help local people to feel more part of this great world event. The quality of the teams is high-standard, hence there is no doubt that the genuine passion for sport will create a positive environment and ultimately a success.

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