Hotels in Rio Keep Closing Due to Economic Crisis and Security Concerns

By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Once booming and full of high expectations, Rio de Janeiro’s hotel industry is now facing a crisis, as occupation rates plummet and thirteen hotels have closed since the end of the 2016 Olympics.

The city’s economic crisis, the lack of marketing campaigns, as well as reports of increasing violence have hindered the city’s tourism industry.

According to Brazilian Hotel Industry Association (ABIH-RJ) Rio de Janeiro chapter president, Alfredo Lopes, says that the lack of investments, more than the violence, is the main culprit for the crisis seen by the hotel industry today.

“After the Olympics, we did not have any marketing to attract the end consumer; to sell Rio throughout the country and the world,” said Lopes in an interview to local newspaper O Globo this week.

Expatriate and owner of WhereInRio luxury real estate firm, Frederic Cockenpot agrees, and shares, “The federal government and the city government invested billions in the city for the Olympics, then the state went broke and not since then has there been a single campaign to stimulate tourism.”

“It’s a shame as Rio has everything to welcome so many more tourists. The impact is terrible for hotels as well as vacation rentals agencies like mine. To survive, the only option is to cut prices…. Many hotels and [apartment rental] agencies have closed since then,” concludes Cockenpot.

The seemingly increase of violence reported by local and international media also is said to have contributed to the reduction of tourists visiting the city.

“The increase in uncertainties in public safety in Rio de Janeiro has caused a loss of confidence in tourism and events in the capital. It is undeniable that security problems harm the image of the city. In the tourism market, this negative image will continue to be felt for another year or two, if nothing is done soon,” said Cockenpot.

But it is not all bad news. If on the one hand, recreation tourists are shying away from Rio, corporate tourism is picking up, according to Renato Pezzino, regional sales manager for Brasilia-based hotel chain, Nobile Hoteis.

“The hotel occupancy for the corporate segment in Rio de Janeiro is picking up. This sector is a great business promoter for the hotel industry in Rio. In this sector we have noticed an improvement,” said the executive in an interview to Hotelier News website.

As far as tourists’ take on it, Bill Owen, a resident of San Francisco, U.S., has visited the Cidade Maravilhosa fourteen times, and was sadden with the news that one of his favorite hotels, Ipanema Plaza, had recently closed its doors.

“Ipanema between Postos 8 & 9 is known as one of the busiest and most popular gay beaches in the world. And many of the beachgoers made their reservations at the Ipanema Plaza because it was such a convenient location for sun and surf,” explained Owen.