Brazil Seeks To Calm World Cup Hyperinflation

Last Updated: 21, August 2013

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Brazil’s tourism board on Tuesday confirmed that it has asked world football governing body FIFA and hotel operators to lower prices during the 2014 World Cup, after a study found that room rates will be up to 500 percent more expensive during the games.

Brazil’s tourism board Emratur said it fears that the “stratospheric increase” of rates announced for the World Cup period next year could damage the country’s image.

In the document sent to FIFA and the hotel operators, Embratur said that FIFA-appointed agency MATCH Services should change the current policy on blocking rooms and should reduce its mark-up rates.

“We propose that the companies involved conduct new rounds of negotiations to lead to a restructuring of the prices,” said the document obtained exclusively by the Associated Press.

“We reiterate that FIFA/MATCH charges mark-up rates of more than 40 percent on the amount contracted with the hotel, something that contributes decisively to the increase of the already high rates.”

Embratur said it wants to negotiate better prices in part because it is afraid that excessive rates during the World Cup may hurt Brazil’s tourism in the long run.

Travel industry experts also warn that Brazil could suffer from the same, post-event tourism slump that London did, largely due to inflated hotel prices, following last summer’s Olympics.

Rates at some hotels in London were up to 10 times higher than usual a year before the Olympics began, although they did fall sharply as the Games approached when the demand did not match earlier predictions.

“We want to guarantee economic success and a legacy for the country that goes beyond the 2014 World Cup,” said Embratur.

Embratur has informed Brazil’s justice ministry of its concerns and also criticised MATCH for imposing minimum stays of two nights at World Cup hotels.

The highest increase it reported was from a hotel in the north-eastern city of Salvador, where prices have risen by 583 percent, from $88 to $510 a night.

MATCH said it had not yet received the request, but would “welcome any attempt the government would make to help us lower prices and would fully support such initiatives.”

However, MATCH said that it does not regulate room rates and that prices are set “by the hotel owners and other tourism stakeholders”.

“As of yet it is totally unclear to MATCH Services on what criteria Embratur has been comparing rates as we have not been consulted in this matter,” AP quoted the agency as saying, adding it would “readily pass the benefit of any such reduction to its customers”.

Ticket sales for next year’s World Cup opened on Tuesday, with over 1 million ticket requests made within the first seven hours of public sale.

The first phase of sales for next year’s tournament runs until October 10 and FIFA said more than 163,000 people had made requests on Tuesday for various games. FIFA is expecting a similar demand to the 2006 World Cup held in Germany, when there were about seven applicants for every ticket of the 64-match tournament. Around 3.3 million tickets will be available for the tournament.

Tickets will range in price from $90 for first-round matches to $990 for the final at Maracana Stadium in Rio de Janeiro. The World Cup opening match will be held in Sao Paulo on 12 June 2014.

About 500,000 tickets have been set aside exclusively for Brazilian citizens. Brazilian citizens over 60, local students and members of some social programmes can purchase tickets for $23.

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