by Michael J. Shapiro | November 01, 2012
As Brazil gears up to host major upcoming sporting events -- the 2014 World Cup and the 2016 Olympic Games in Rio de Janeiro -- investment in the country's tourism infrastructure has grown and the hotel development pipeline is strong. But it will be some time before those new hotel rooms open for business; in the meantime, planners can expect hotel rates to skyrocket.

"Significantly higher prices will be the norm until the supply of new hotel construction becomes available for meetings and events use," writes Tony Wagner, vice president, CWT Meetings & Events, Americas, in Carlson Wagonlit Travel's 2013 Travel Price Forecast: M&E Supplement. Brazil's hotels are expected to lead the way in a Latin American hotel market that is forecast to surge overall.

CWT expects the average daily hotel rate in Brazil to climb by between 13.3 and 14.8 percent year-over-year for the first half of 2013, and between 13.1 and 14.5 percent in the second half of the year. Per-attendee, per-day spending increases for Latin America meetings next year are expected to be the highest in the world, reports CWT, with the cost shooting up by 9.8 to 12.2 percent.

The surge already has begun, according to Advito, the consulting arm of BCD Travel, which expects Brazil's year-end 2012 average daily rates to exceed last year's by approximately 23 to 25 percent.  

Brazil should begin adding to its room supply in a much more meaningful way by 2014, according to Lodging Econometrics' Fall 2012 Latin America Lodging Real Estate Trends. The nation has the fourth largest development pipeline in the world, notes the report, behind the U.S., China and India, and it represents 45 percent of all development activity in Latin America.

The reports forecasts 8,182 new rooms (46 hotels) to open next year, with 13,625 more (87 hotels) expected to debut in 2014. Room openings in the following two years are expected to be even higher, as the government works with the private sector to accelerate development. "It's part of a massive undertaking to improve the tourism infrastructure," according to the report. About 70 percent of the projects are larger, upscale properties, most of which are in major cities.

Even with the room shortages planners likely will see pre-2014, CWT's Wagner expects the number of meetings held in Brazil to continue its upward climb. The fact that meetings and events in Latin America typically aren't booked far in advance might change as a result of that increased demand. "Planners may need to adjust their behavior in order to secure necessary space or risk being turned away," Wagner cautions.