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World Cup-2014: Brazil Dreams of a US$ 30 Billion Infusion

World Cup in BrazilThe ball had barely started rolling in this year’s FIFA World Cup, and already tourist industry entrepreneurs were setting their sights on 2014, when the football championship will be held in Brazil. The event’s impact on the Brazilian economy will be huge, ranging from the coming of 600,000 foreigners to the country in 2014, to an increase of 47.9 billion reais (US$ 29.9 billion) in the GDP.

If the tournament is well organized, with modern stadiums, good lodging and transport services, safety for walking the streets and, therefore, tourists happily returning home, then the Cup’s results will last for years and years. In other words, before, during and after it, the Cup will be a landmark event for the country.

According to the Brazilian Ministry of Tourism, in 2014, 2 million jobs may be created in the industry, and 73 million passengers may arrive in the country.

Also according to the Ministry, 552 million reais (US$ 310 million) have already been invested in the cities that will host the kings of football four years from now: Belo Horizonte, Brasília, Cuiabá, Fortaleza, Manaus, Natal, Porto Alegre, Recife, Rio de Janeiro, Salvador and São Paulo.

“The World Cup host cities will gain visibility with the tournament,” explains the director of Products and Destinations of the Brazilian Tourism Institute (Embratur), Marcelo Pedroso. “Not to mention that we want to take advantage of the event to diversify the destination options in the country,” he says.

All of the municipalities involved in the tournament should also have exclusive bus lanes and light rail vehicles. The intention is to make traffic easier between the stadiums, hotels, bus terminals and airports. In all, there will be public transport projects, with a total budget of 11.4 billion reais (US$ 6.4 billion).

Pedroso claims that in 2014, 20 billion reais (US$ 11.6 billion) should be invested in infrastructure works such as construction of roads, for instance. The process will mostly affect the lives of those living in the largest Brazilian metropolises: São Paulo and Rio de Janeiro.

In Rio de Janeiro, which is also going to host the Olympic Games in 2016, international tourist flow should be approximately 79,000 during the Cup, and 196,000 for the Olympics. The estimate is from the Special Tourism Secretariat of the Rio de Janeiro Tourism Authority (RioTur).

In order to host the World Cup and the Olympics, Rio expects to carry out works such as the construction of a high-speed rail estimated at 34.6 billion reais (US$ 19.4 billion), the renewal of two terminals at the international airport, to increase capacity to 25 million passengers a year, and the extension of subway lines 1 and 4, which should cost 1.1 billion reais (US$ 619 million) and 4 billion reais (US$ 2.2 billion), respectively.

All in all, the Rio de Janeiro city hall forecasts that investment should reach 28 billion reais (US$ 15.7 billion) by 2016, which should be supplied by the municipal, state and federal governments (23 billion reais, or US$ 12.9 billion) and by the International Olympic Committee (5 billion reais, or US$ 2.8 billion). In the private sector, the improvement of the hotel network and the construction of new hotels should involve investment of over 1 billion reais (US$ 565 million) in the city of Rio de Janeiro alone.

In São Paulo state, investment is expected to reach 1.68 billion reais (US$ 950 million) in Guarulhos and Congonhas airports, as well as another 936 million reais (US$ 530 million) in Viracopos terminal, in Campinas, 99 kilometers away from state capital São Paulo.

In all, the largest city in the country should receive almost 34 billion reais (US$ 19.2 billion) in works for the world cup. Expectations are for 500,000 foreign tourists to visit the country in the month of the Cup, as well as 3,000 journalists.

Among the great hotel chains, expectations for the 2014 world cup are already great. At Accor group, originally French and operating in the country with brands Sofitel, Novotel, Mercure, Ibis and Formule 1, there are 73 hotels currently operating in the cities to host the 2014 Cup, with over 25 units under construction, with investment of 480 million reais (US$ 270 million).

The company says that there are another 34 points in advanced negotiation with investors for future construction. And that is not all: in the cities close to the capitals that are going to receive matches, there are 18 projects in implementation and 35 in advanced negotiation.

Blue Tree Group, for example, forecasts five inaugurations in the Midwest and North this year. “We are observing very positive performance,” explained the executive president at Blue Tree network, Chieko Aoki. “The first quarter of the year was one of growth of 15% when compared to the same period in 2009,” she said.

According to the businesswoman, the sector is getting ready to receive the visitors to come to the Cup and Olympics. “Being one of the main links in the tourism chain, we are organizing ourselves now so as to offer top-end products and services,” said Chieko.

Homework

According to the president at Arbache Consultoria, a professor and consultant in the area of market intelligence, Fernando Arbache, the country needs high-end services to reap the rewards of promotion of the Cup and the Olympics. “The main benefits come after these events,” he explained.

“Most of the countries that prepared themselves well had positive results as, after the games, the tendency is for those present to return as tourists,” he said. If the opposite takes place, the embarrassment may be great. “The cost of a badly organized Cup may last decades,” he said.

Arbache warns that studies and estimates regarding visitation for both great sports events should be developed not considering the current reality, but based on the country we will be in 2014 and 2016, with more cars on the streets and people needing quality public transpiration to see the matches. “Other bottlenecks to be worked are the expansion of the number of passengers at airports and the greater consumption of energy, for example,” she explained.

The logic is that, if it is well worked, tourism may change the country in terms of generation of jobs. “Those who go on holiday want to rest and have privileges, without facing automated services,” explained Arbache. “Tourists want to be served, in person. And that is where the sector may generate many jobs.”

To exemplify what he says, Arbache uses Cancun, a popular resort in Mexico. “Hotels in Cancun offer excellent services. All Mexico had to do was notice that to start attracting tourists from all over the world,” he said. “Brazil needs to become more professional in this respect, to understand that tourism is an impulse to social mobility for many workers,” he says.

Anba

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