This is the third in M&C's special three-part series on emerging meetings markets. Brazil's booming economy and heavy investments in infrastructure improvements have captured the attention of global investors, who watch with great interest as the country prepares to host major events in upcoming years.
The mystical allure of Brazil seems to have intensified of late, and not just as a leisure destination. The world's eighth largest economy now gets as much attention for its potential as an emerging market as for its soccer prowess and Ipanema bikinis. The fact that the country has scored two major sporting events -- the 2014 FIFA World Cup (to be played in 12 different cities) and the 2016 Olympic Games (which will be held in Rio de Janeiro) -- promises a boon to the travel and hospitality industries. Brazil is "the flavor of the month," as one convention and visitors bureau head put it.
A handful of factors are driving Brazil's current success, according to Ricardo Souza Ferreira, executive vice president of corporate travel management company Grupo Alatur and the former president of the Brazil chapter of Meeting Professionals International. Ferreira touts the country's wealth of natural resources, newfound fiscal discipline (which has resulted in a national budget surplus) and the outgoing political administration, which strove to improve the country's infrastructure. (The hugely popular president, Luiz Inácio Lula da Silva, finished his second term in January. Dilma Rousseff, Lula's former chief of staff and now the country's first female president, succeeded him.) Brazilian corporations have prospered.
"For many, many years we've had big business," said Ferreira during a recent Association for Corporate Travel Executives webcast about Latin America, "but for the first time now we have multinational companies originating in Brazil, going all over Latin America."
The region was spared the worst of the worldwide economic recession. The effects surfaced later and were less severe than elsewhere, and most Latin American countries have bounced back relatively quickly. "In Brazil in particular, it's almost like the recession never happened," noted Barbara Blue, president of the Latin American division and North America Affiliate Program for BCD Travel, in the same webcast. "Business is booming," she added.
Building boom Hotel development has exploded accordingly. The construction pipeline is flourishing throughout South America, according to Portsmouth, N.H.-based Lodging Econometrics' 2011 Outlook for Latin America Lodging Real Estate Trends, thanks to the quick recovery of the South American economies and the rebounding hotel industry.
Brazil has 28,104 rooms in the pipeline, the report found -- a fraction of the development occurring in emerging-market leader China, but it accounts for 66 percent of all room development in South America. The number also represents a 33 percent year-over-year increase over room development at the end of 2009, and Lodging Econometrics expects that trend to continue its ascent.
"There are 177 projects in the pipeline right now in the country," notes Bruce Ward, senior vice president of Lodging Econometrics, "and I wouldn't be entirely surprised if at the end of next year we're sitting here talking about twice as many projects."