Olympic Games and pre-salt make 15,000 hotel rooms get off the ground in Rio

From mirror-windowed skyscrapers on the seafront to small luxury hotels downtown, Rio de Janeiro is well on its way to meet the goal of 15,000 new hotel rooms required by the IOC (International Olympic Committee) for the 2016 Olympic Games.

Major hotel chains such as the U.S.’s Hilton and Hyatt don’t have hotels in the city yet, but they are coming and will build by the sea in Barra da Tijuca (west zone).

“For some years, we have been looking at Rio waiting to make a major investment, because increasing our presence in Brazil is crucial for our expansion strategy,” says Myles McGourty, vice-president of Hyatt. The construction of the hotel will begin this month and it is expected to be ready in 2015.

A study by the City Department of Urbanism shows that 18,126 hotel rooms are either under construction, or have had their licenses approved or are having their requests analyzed at the department. There are 4,606 rooms under construction in at least 28 different projects. There are no official estimates regarding how many of the 18,000 rooms will be ready for the 2014 World Cup.

Not only new hotels are responsible for the expansion. Chains already known locally are investing to expand their businesses.

Such are the cases of Brazil’s Windsor, which is building two towers with almost 1,000 rooms, and Accor, of France, which operates the chain Ibis, investing R$ 420 million to increase its hotels from the current 12 to 18 in four years.

New Brazilian investors also are arriving. REX, a real estate company that belongs to Eike Batista’s EBX, is refurbishing Hotel Glória, purchased in 2008 and which will be operational again in 2014, with 352 rooms.

BUSINESSES

Hotel analysts and chains say the hotels won’t survive only on the sport events. The recovery of the local economy, boosted by the pre-salt, is seen as the most important factor for the “hotel fever.”

However, the Olympics did influence the sector. Rio’s city hall, fearing the number of hotel rooms will not be enough for the Olympic Games, created a law in 2010 which gives fiscal benefits to hotel projects.

In the past two year, Riocentro, Rio’s main convention center, received at least eight major international events, such as Rio+20, in the middle of 2012.

(Lucas Vetorazzo | Folha de S. Paulo)