We want to believe that, like the World Cup, Rio's Olympics will be a success. But it's really hard to keep on believing they will be given these numbers, and the recent resignation of the country's tourism minister, following accusations he accepted improper campaign gifts.
Brazilian officials said the Summer Olympics will bring an extra 350,000 to 500,000 tourists to Rio de Janeiro, and they’re sticking to it, in spite of early indicators and anecdotal evidence that suggest the real numbers will be smaller.
A little more than one month before the Aug. 5 opening ceremony, travel industry insiders say a two-year recession, ongoing political crisis and public alarm over the Zika virus has taken its toll on tourist enthusiasm.
“There’s sort of a perfect storm of circumstances,” said Julia Carter, director of sales at Brazil Nuts, a Naples, Florida-based travel agency. Olympic demand was “not as good as you might expect for a tour operator specializing in South America,” she said, adding that the company is considering using a new name to market its non-Brazil trips.
Brazil travel on American Airlines plummeted in the first quarter — by one measure, down 39 percent year-over-year — and the airline says it will operate 16 percent fewer flights to the country in August compared with last year. On local carriers, international demand has also suffered, falling 3.6 percent in April, compared with April of 2015, according to the Brazilian Airline Association.
Data from the lodging industry is mixed. Olympic organizers have reserved some 90 percent of available rooms for delegations, so vacancy rates are low. Airbnb, the “official alternative accommodations service” of Rio 2016, said it has booked 30,000 guests for the games, though it declined to give occupancy rates.
Alex Kaplan, who lives in Rio and rents out around 35 properties on Airbnb on behalf of the owners, said demand has been a letdown compared to the 2014 FIFA World Cup in Brazil. About 25 percent of the properties he manages are still available.
“People definitely don’t seem to be as excited about the Olympics as they were for the World Cup,” said Kaplan. “I’ve had had many rentals fall through.”
In an e-mail, the tourism promotion agency reaffirmed the government’s estimate that an additional 350,000 to 500,000 tourists will visit in August and September. That would mean around 1.1 million foreign tourists total, an increase of 82 percent at the high end of the range – ambitious, but less than the 96 percent increase in tourism during the 2014 FIFA World Cup in Brazil.
The soccer games, however, were played in 12 cities — instead of one for the Olympics — and they drew large numbers of rabid soccer fans from far-flung places. Olympic travelers tend to come from nearby countries. Furthermore, the World Cup took place before the Zika scare had begun.
The Brazilian government is scrambling to allay concerns that Zika will spread to tourists during the Games. On June 10, an official government website posted a 20-page presentation concluding the “risk of Zika is minimal during the games.” Also that day, Sports Minister Leonardo Picciani said prevention efforts had worked and the onset of the South American winter meant cases were about to reach near-zero levels.
For the Games themselves, only 67 percent of event tickets for had been sold as of May, far behind the pace of sales for the 2012 London Olympics. Rio 2016 organizers insist that reflects a cultural preference among Brazilians to put things off to the last minute.
Even robust ticket sales don’t necessarily predict tourism. In both London and 2008 host Beijing, national tourism overall actually dropped during the games. Regular tourists and business travelers tend to stay away from cities during massive events, said Victor Matheson, a sports economist at the College of the Holy Cross.
Even if the games do draw the projected half-million new tourists, Moody’s Investors Service and most economists agree that any windfall would be almost inconsequential for the greater Brazilian economy, the largest in Latin America, as it tries to emerge from the worst recession in a century.
Overly ambitious projections are par for the course in global sporting events, said Matheson, the economist. “Anytime you’re asking for something from taxpayers, it always makes sense to have inflated numbers.”
— With assistance from Mary Schlangenstein
©2016 Bloomberg L.P.
This article was written by Jonathan Levin from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo credit: Brazil's interim President Michel Temer, left, talks to Rio de Janeiro Mayor Eduardo Paes as they visit the Olympic Aquatics Stadium at the Olympic Park in Rio de Janeiro, Brazil, Tuesday, June 14, 2016. In recent weeks Temer has stepped up his pledges of support for the Olympic games, which have been beset by a series of problems including the ongoing political crisis, Brazil's worst recession in decades and an outbreak of the Zika virus, which has been linked to birth defects in infants. Felipe Dana / Associated Press