Tickets for the Olympic Games in Rio de Janeiro are not selling as quickly as for the last Olympics. In addition, demand for air tickets and hotel rooms is also weak amid the recession in Brazil, the Zika virus epidemic and security concerns in the days leading up to the Games’ opening ceremony on August 5.
By August 1, only about 79% of the 6.1 million tickets for the Olympics had been sold, according to organizers. This is much less than the final figures for the last two summer Olympics in London and Beijing, where sales exceeded 95%. However, in percentage terms, Rio has already outpaced previous summer games in Athens, Atlanta, Barcelona and Seoul, which failed to break the 80% milestone, according to Statista. “I think this is an acceptable result,” says David Walleczynski, president of the International Society of Olympiad Historians (ISOH).
Walleczynski associates impressive ticket sales in London and Beijing with unique factors, including China’s huge population, England’s wealth, its proximity to mainland Europe and its love of all sports. At most of the Olympics, about 75% of tickets are purchased by locals. In the case of Brazil, on the contrary, it is long and expensive for foreigners to get to the country, while Brazilians mostly love only football.
Games organizers expect ticket sales to accelerate at the last minute, driven by demand from the local population and some foreigners. So far, their sales revenue has reached $ 304 million, or 95% of the plan. But some experts doubt that Rio will be able to significantly improve the result. By comparison, the organizers of the London Games raised £ 659 million ($ 880 million) from ticket sales, surpassing the plan by 32%, according to documents released after the Olympias. “All those who come from abroad have already decided to go [на Игры] or not, says Erich Betting, director of the Maquina do Esporte consulting firm. “From this point of view, it will be difficult for Rio to get ahead of London.”
Hotel and flight reservations have not met expectations either. Latam Tavel, one of Brazil’s largest tour operators and sponsor of Rio 2016, recently reported that hotel bookings were 30% below initial forecasts. Last Thursday, the company offered Brazilians a 50% discount on 12,000 room nights. According to the head of the Brazilian division of Latam Travel, Marcelo Desem, demand was affected by the deep recession in the country. Brazilian unemployment now exceeds 11% and GDP is expected to contract by more than 3% this year. In addition, people are scared off by the world’s media reports of terrorism and the Zika virus. This bad news “affects those who have not yet decided,” says Desem.
The Brazilian Hospitality Association (ABIH) reported last week that nearly 93% of rooms in Rio have been booked. There are very few places left in the popular southern part of the city, where the famous beaches are located. Demand is also high for luxury hotel rooms in the western area of Barra da Tijuca, where the Olympic Village and several sports facilities are located. However, properties in less popular areas have not yet met the demand that many had hoped for.
The International Olympic Committee (IOC), citing lack of demand, recently canceled all room reservations at a brand new hotel in Rio with which Hotel Invest Tais Perfeitu is partnering. Although earlier, the IOC almost entirely booked this hotel, the name of which Perfeytu refused to give, for the entire duration of the Olympics for its members and guests.
The IOC spokesperson said the organization “works closely with all of its housing partners and fulfills their contractual obligations to them.”
The boom in hotel construction in Rio has increased pressure on their operators, Perfeitou said. Room supply has doubled to 56,000 since 2009, when Rio was chosen to host the Olympics, and most of the new numbers have only hit the market in the past year and a half. “A surreal number of hotels have opened in Rio. Also, competing with Airbnb doesn’t help, ”Perfeitu says.
At the same time, Airbnb said that reservations for real estate through its service exceeded forecasts. By August 1, 66,000 tourists had confirmed their reservations, said Leonardo Tristan, Airbnb’s chief executive in Brazil. According to him, the number of offers for renting rooms, apartments or houses in Rio has doubled over the past year to more than 38,000. The company declined to disclose the percentage of offers not booked during the Olympics, but demand “continues to grow,” Tristan said.
The situation with air tickets is also controversial. Typically, major sporting events negatively impact airline profits by scaring off attractive business customers. But as American Airlines President Scott Kirby noted, the number of such customers in Brazil has already declined so much due to the recession, so he expects tourists attending the Olympics to improve the situation.
But Brazilian airlines flying to Rio are not seeing the Olympics’ positive impact on the profits they were hoping for, said Ronaldo Jenkins, director of operations and security for the Brazilian Airlines Association (ABEAR). Jenkins admits that he is skeptical about recent upbeat statements by tourism officials in Rio, who are talking about a full house at the Games. “I don’t know how these people get [до Рио]Jenkins says. “It is being discussed at our meetings that the demand for air tickets is lower than expected.”
Translated by Alexey Nevelsky
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