Market Attractiveness of BrazilMarket Attractiveness of BrazilBrazil is the 10th largest economy with a population of 190 million, an opportunity that cant be ignored. Brazils hotel industry is becoming increasingly attractive to investors for various reasons. With a boom in the economy, domestic demand for hotels across Brazil is escalating. With the increase in the personal incomes of consumers, more disposable income is available for travel and lodging. More importantly the luxury hotel market in Rio is booming because of the Brazils thriving economy.
The demand for hotels in Brazil will be on a rise as Brazil is hosting the World Cup and Olympics . These two events are expected to attract a large number of tourists and spectators. A study conducted by Ernst & Young (“A World of Possibility”, 2010) on the socio-economic impact of the 2014 World Cup reports that Brazil has a lodging shortfall of approximately 62,000 rooms. This clearly suggests that there is a huge market available for the expansion of hotel industry.
Tourism is a major industry that contributes to Brazils GDP. Total international and domestic tourism accounted for ~8% of the Brazils GDP, above Latin Americas 5.1%. In 2005, tourists spent substantially on accommodation (32%) followed by shopping and travel (25%). According to Euromonitor International, the Brazil/EU tie-up signed in 2010 is expected to generate 335,000 additional passengers for Brazil (“World Travel Market”, 2010). Also, RevPAR, (revenue per available room) which decreased to 8.4% in 2009 saw a huge increase of 34.5% in September 2010. The average daily rate (ADR) increased to USD 110.35, a 22.5% increase from the year 2009, which implies that hotels are able to charge more than before (“A World of Possibility”, 2010).
The Brazilian government was committed to improving and extending the state-of-the-art infrastructure. The Central government began its construction spree in March 2008 with the completion of 40,868 connected buildings, bringing back the total number of connected developments in South America to 50,065. This was only slightly faster in 2006 (56,734) than in 2005 (49,962), with only 47,760 connected projects. There are five connected public transport projects and at least one public access transit project in a project district (Boca-Pridina/Tajuca). As a result of ongoing construction, the National University of Brazil in Brasilia and the Centro Municipal de Brasil, (included) continue to build new schools and universities to address student needs. The government works on a strategy to develop the capacity of the university system, while supporting local partners in the construction of the main academic building and the secondary and tertiary projects, in order to provide all students a level education that can be used by the national capital, while providing a quality life for more than 85 million. In May 2007 the government opened up all university facilities to the public, with several new facilities being built, which further increased its educational capacity, while also supporting local stakeholders, in the construction of university campuses. In 2009 the government announced that it will implement a range of initiatives to protect local people from possible disasters, including building safety in the streets (A World of Possibility”), with the introduction of an urban fire protection zone located in public areas in areas under threat (MozĂŁo Gombas et al., 2013. ). In 2015 the federal government set up a national public body to monitor the potential of the future development of Brazil and its society (A World of Possibility”, 2015).
Another trend of increased public investment is the construction industry. By the end of 2011 Brazil had constructed a total of 2,821 public building projects around the country. The total number of construction projects in 2010 was ~2.55 million, which was significantly above the total number of commercial and industrial projects in the whole of 2008, and above that of all other cities and states of the world, including Dubai. The total construction cost of a project in Brazil was ~2.54 billion dollars, which surpassed that of the entire world. In 2011 Brazil added to the total number of connected construction projects at 10.7 million. By September 2016, the average construction costs of construction projects were 3.9 million USD (~$16.45). Overall, the Brazilian government’s net investment in private projects is down from the peak of 2.4 million USD in 1988. Of the total, 1.2 million USD of the total was invested in government departments and enterprises (1.3 million USD is for the Ministry of the Interior & Foreign Affairs, $
The Brazilian government was committed to improving and extending the state-of-the-art infrastructure. The Central government began its construction spree in March 2008 with the completion of 40,868 connected buildings, bringing back the total number of connected developments in South America to 50,065. This was only slightly faster in 2006 (56,734) than in 2005 (49,962), with only 47,760 connected projects. There are five connected public transport projects and at least one public access transit project in a project district (Boca-Pridina/Tajuca). As a result of ongoing construction, the National University of Brazil in Brasilia and the Centro Municipal de Brasil, (included) continue to build new schools and universities to address student needs. The government works on a strategy to develop the capacity of the university system, while supporting local partners in the construction of the main academic building and the secondary and tertiary projects, in order to provide all students a level education that can be used by the national capital, while providing a quality life for more than 85 million. In May 2007 the government opened up all university facilities to the public, with several new facilities being built, which further increased its educational capacity, while also supporting local stakeholders, in the construction of university campuses. In 2009 the government announced that it will implement a range of initiatives to protect local people from possible disasters, including building safety in the streets (A World of Possibility”), with the introduction of an urban fire protection zone located in public areas in areas under threat (MozĂŁo Gombas et al., 2013. ). In 2015 the federal government set up a national public body to monitor the potential of the future development of Brazil and its society (A World of Possibility”, 2015).
Another trend of increased public investment is the construction industry. By the end of 2011 Brazil had constructed a total of 2,821 public building projects around the country. The total number of construction projects in 2010 was ~2.55 million, which was significantly above the total number of commercial and industrial projects in the whole of 2008, and above that of all other cities and states of the world, including Dubai. The total construction cost of a project in Brazil was ~2.54 billion dollars, which surpassed that of the entire world. In 2011 Brazil added to the total number of connected construction projects at 10.7 million. By September 2016, the average construction costs of construction projects were 3.9 million USD (~$16.45). Overall, the Brazilian government’s net investment in private projects is down from the peak of 2.4 million USD in 1988. Of the total, 1.2 million USD of the total was invested in government departments and enterprises (1.3 million USD is for the Ministry of the Interior & Foreign Affairs, $
Investing in the hotel industry is a long-term plan that goes beyond the Olympic