Hotel Prices Concern 2014 World Cup LOC, Government Calls On Hotels To Self-Regulate
The hotel price situation for the 2014 FIFA World Cup in Brazil has been an issue of concern for the local organizing committee since World Cup LOC CEO Ricardo Trade told SBD Global in early April, "The [hotel] price situation is a challenge, but the government is trying to control this." The government is indeed trying to ensure hotel prices will not skyrocket. Brazilian Tourism Minister Gastão Dias Vieira told SBD Global, "It will be easy for any visitor to get a hotel room, as much as it is during any mega-event anywhere in the world (which means, book ahead and prepare to pay more than you would in low season). 24,982 new hotel bedrooms are being built in the host cities. In addition to that, cities which are more hotel-constrained, like Rio, will have a registry of alternative means, something that worked well in Copenhagen in 2009 and elsewhere, including Rio itself during the Rio +20 summit." Both the government and the local organizing committee count on the increased number of available rooms in order to keep prices in check. Trade said, "We are having a lot of new investments in the hotel industry here. We have a lot of people building new hotels. These kinds of things will make it easier for the tourists because there will be more available hotel rooms and this could lead to lower prices. However, it’s a challenge."
NO PRICE CONTROLS: It is an even bigger challenge because the Brazilian government has no real control over hotel prices. Even though Brazil is the host, the World Cup is a FIFA event, and as such FIFA and its hospitality partner are in control of the majority of hotel rooms in the host cities during the event. Vieira said, "FIFA has a partner, Match, which is entitled to 60% of the hotel bedrooms in the host cities during the games. Match will sell, and the Brazilian government has no control whatsoever over their prices. It’s a deal that every host country has to sign -- South Africa had to, and Germany before it." He added, "Having said that, the Ministry of Tourism has been encouraging the hotels to self-regulate: we know there is an impulse to increase prices beyond what’s reasonable, and everybody should also know that is bad for business, since we want the tourist to come back in the future. That is why the main hotel associations in the country have signed a dealwith the Ministry in January committing themselves to monitoring prices."