Rio de Janeiro Olympic city 2016: challenges and opportunities
Sunday, 26 Oct, 2009
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Euromonitor International’s Angelo Rossini and Lisandra Minussi review the next steps now that Rio de Janeiro has been crowned host of the 2016 Olympic Games.
Rio de Janeiro’s victory over Madrid, Tokyo and Chicago in the bid to host the 2016 Summer Olympic Games is only the start of an important challenge for the former Brazilian capital, which will be the first Latin American city to host the Olympics.
As President Lula said from now on the slogan for Brazil and Rio will be “work, work and work” in order to be ready to host this important event and to make the most of it for the whole country.
The assignment of the Olympic Games to Rio de Janeiro, after that of the 2014 Football World Championship to Brazil, is in recognition of the increasingly important role the country is playing in global economics and politics.
These two important events are not just a tool to boost the image of Brazil and show its progress, but also a particularly important opportunity for Brazilian tourism, which has huge potential and is expected to take off thanks to the Football World Championship, and especially to the Rio de Janeiro Olympic Games.
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Arrivals to Brazil – 2003-2008 – ‘000 people
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|
|
|
|
|
2003
|
2008
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2003-2008 % growth
|
|
Business arrivals
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1,032.9
|
1,766.4
|
71.0
|
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Leisure arrivals
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3,100.0
|
3,390.1
|
9.4
|
|
Total arrivals
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4,132.8
|
5,156.5
|
24.8
|
|
|
|
|
|
|
Sources: Euromonitor International from trade sources/national statistics
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Many challenges ahead
However, in order to capitalise on this opportunity, the organization responsible for the Olympic Games will need to address a number of significant challenges, which in some cases are the same challenges Brazilian tourism is facing and thus far have delayed development.
Security is the first issue that the Olympic Games organisers will need to handle. Rio de Janeiro has the reputation of a dangerous city, one of the main factors hampering tourist growth.
The city welcomed 2.8 million visitors, up 7.3% on 2008 with 35% of these visitors of international origin. Euromonitor data shows this was the slowest growth rate of all Brazilian cities.
The 2007 Pan American Games showed authorities are able to keep the security issue under control, serving as a paradigm for the world stage. The Olympics are a great opportunity to show the world security is no longer an issue and Brazil is an increasingly safe destination to visit.
A second important issue is the facilities necessary to host such an important event. The Rio de Janeiro project was the most expensive out of the four candidate cities, amounting to $14.45 billion.
These large resources will be necessary to strengthen the travel accommodation and transportation facilities which currently are inadequate to host the Olympics. In particular, Rio de Janeiro Tom Jobim International Airport needs substantial improvements in terms of both security and capacity. For accommodation, an additional 25,000 beds are necessary to handle capacity for the Games.
The ‘Barcelona 1992’ model
The Olympic Games do not always have a happy ending and can prove challenging for the host city.
As argued by sports economics professor Brad Humphreys of Alberta University, the Olympic Games can result in enormous expenses not covered by revenues generated from the event.
This was the case for Athens, which spent $16 billion compared to the $1.6 billion planned, and also of Beijing, which planned to spend $2 billion but in the end spent $40 billion.
London has already spent $19 billion in preparation for the 2012 Olympic Games, already $11 billion more than the $8 billion initially budgeted for.
According to Professor Humphreys, Montreal citizens paid additional taxes for 30 years to finance their Olympic Games.
On the other hand, the virtuous model for Rio de Janeiro is represented by Barcelona’s 1992 Olympic Games.
The Olympics for Barcelona improved the city’s infrastructure and boosted its tourist image worldwide. The Olympics was a turning point for Barcelona resulting in an improved image and has since become one of the capitals of world tourism.
In order to achieve the Barcelona effect, vast potential is a prerequisite, the basis of which tourism development can be built.
From this point of view, Rio de Janeiro matches the Catalan city thanks to its beauty, people, weather, music and charm. The natural setting of the city will no doubt make the Rio de Janeiro Olympics a sensational event.
Therefore, the Brazilian authorities have the opportunity to replicate Barcelona’s success and forever improve tourism in Rio and Brazil.
However, this will only happen if they address the many challenges ahead.
The government will need to take advantage of the opportunity and conduct promotion over the next four years to maximise its exposure on the world stage, first with the Football World Championship and secondly with the Olympic Games.
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Travel accommodation value sales in Brazil – 2008-2013 Forecast – US$ mn
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2008
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2013
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2008-13 % growth
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Travel accommodation
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11,809.3
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13,695.9
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16.0
|
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Hotels
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11,331.1
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13,157.2
|
16.1
|
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Chained hotels
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2,045.4
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2,378.6
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16.3
|
|
Independent hotels
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9,285.7
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10,778.5
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16.1
|
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Other travel accommodation
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478.2
|
538.7
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12.6
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Campsites
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44.4
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46.3
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4.2
|
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Hostels
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42.1
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48.5
|
15.3
|
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Motels
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210.9
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238.9
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13.3
|
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Self-catering apartments
|
97.5
|
110.4
|
13.2
|
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Other other travel accommodation
|
83.4
|
94.6
|
13.5
|
|
|
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Sources: Euromonitor International from trade sources/national statistics
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