Toggle navigation

Rio's Olympic hotel rooms empty one year later

Tuesday, 8 August 2017 09:14:16 AM

Rio de Janeiro hotels nearly doubled capacity for the Olympics, but had a problem once sports fans went home: the tourism industry had checked out with them.

After being criticised for not having enough rooms in the buildup to the Games, Rio energetically boosted bed numbers, hoping that this would also benefit the famous seaside city afterward. And during the Olympics last August things looked good: occupancy reached 76%.

Fast forward to June this year, with Rio state nearly bankrupt and the city awash in crime: the occupancy rate was 37%. By comparison, in June 2016 and 2015 occupancy was 50%.

"We raised our hotel capacity from 29,000 rooms in 2009 to 56,000 in 2016," said Alfredo Lopes, head of the Rio hotel industry association. "What we didn't do was attract more tourists."

"The situation is really critical," said Brazilian Hospitality and Food Federation president Alexandre Sampaio.

"Hotels agreed to big investments in order to meet the demands of the (Olympics authorities), with more modern establishments and the entry of new international chains. However, these investments are now compromised," he said.

"If we don't manage to get an acceptable occupancy rate in the near future, many hotels risk closing in the second half of the year."

'Risk of closure'

The situation is worst in the far-flung area of western Rio where the Olympic Park was built. Now that the Games are over, there is almost no reason why a tourist would want to be based there, with difficult access to sightseeing favourites like Copacabana beach or the Christ the Redeemer statue.

Many of the nearby sports arenas are either in a semi-abandoned state or are being used too seldomly to support the neighbourhood's economy or to attract new investment.

"Today almost no one goes to those hotels. Most have only one or two floors open, with 12% occupancy," Lopes said. "No big hotel chain wants to invest millions just for the Olympics."

But even more central areas are hurting. The four star Arena Ipanema hotel, right by the famous neighbourhood's beach, was inaugurated just days before the Olympic opening ceremony.

The manager, Douglas Viegas, described "a very serious occupancy crisis" in the hotel, which has 136 rooms.

"It's absolutely not what we were expecting," he said in the nearly deserted reception area.

"We were counting on an occupancy of 75% but today we're at around 40%," he said. Rates have been cut by almost a third to try and boost trade.

Other hotels are trying to lure customers by offering use of their pools and other extras for day visitors, who are not required to take rooms.

Tourists scared off

Brazil is struggling to exit a deep two year recession but in addition to economic problems, Rio is suffering a surge in violent crime, hitting the tourism sector hard.

A study in July by the National Business Confederation said 40% of losses between January and April — 320 million reais (RM440 million) — were linked to problems with crime.

"Rio risks being left out of the future improvements in the economy because crime doesn't stop growing and there is no short-term solution," one of the authors of the study, Fabio Bentes, said.

"The feeling of insecurity is the worst thing that can happen to tourism. Tourists end up choosing a different destination."

Sampaio said the problem wasn't just local.

"Rio is the gateway to Brazil and this situation can end up affecting the whole country," he said. "We've missed the train. We should have capitalised on the positive image of a perfectly organised Olympic Games."