Brazil calms fears of room shortage for World Cup

SAO PAULO Thu Jan 24, 2013 5:19am IST

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SAO PAULO (Reuters) - Brazil's sports minister has predicted the country will have more than enough hotel rooms for the 2014 World Cup and will avoid a repeat of the price gouging that occurred ahead of last year's U.N. conference in Rio de Janeiro.

Soccer's governing body FIFA has raised concerns that Brazil lacks the quantity and quality of hotel rooms it expects for host countries, but sports minister Aldo Rebelo said private investors were improving lodgings in the 12 venue cities.

"The concern of the private sector is different from that of some observers," Rebelo told reporters on Wednesday. "They think there will be a surplus and that will result in a decline in prices.

"We are confident there will be a balance and will be watching so that tourists and journalists are not threatened with extortion," he added.

The concerns follow a rush for rooms in Rio last June when hotels in the city, known for its sparse stock of outdated and overpriced lodgings, hiked prices by as much as five times the regular rate ahead of a U.N. development conference.

At the time, city officials and the Brazilian government had to intervene to coordinate a rate cut by hoteliers. The gouging alarmed many in Brazil as the country gears up to host the World Cup and the 2016 Summer Olympics in Rio.

Rebelo, however, forecast a surge in lodging investments as hotel companies prepare for the World Cup, claiming one French chain alone was planning to invest $2.5 billion in Brazil over the coming years. He did not specify the company.

France's Accor (ACCP.PA), a market leader among hotel companies in the region, has said it expected to invest around $900 million in all of Latin America by 2015.

POOR ROOMS

The concerns over hotel rooms is particularly acute in far-flung venues like Manaus and Cuiaba, cities located in the Amazon and Brazil's remote farm belt.

Last year, FIFA secretary general Jerome Valcke warned that the dearth of accommodation was so severe, some fans might have to fly in and out of cities before and after matches.

Brazil's major tourist destination Rio is better served than most but the city has a history of late scrambles for decent accommodation during big events. The city has more than 20,000 hotel rooms but very few of them are ranked four or five star.

Authorities have discussed plans to host visitors on cruise ships in the city's bay during the Olympics. Some investors are even refurbishing sex motels that normally sell rooms by the hour.

Rebelo called the exorbitant price hikes ahead of the U.N. summit "criminal" and said authorities would act swiftly if abuses were detected again.

"The government will call on federal police to act against any hoteliers who try to gouge clients," he said.

In addition to hotels, Brazil is investing heavily to ensure that airports, public transport and stadiums are all ready in time for the upcoming events.

(Editing By Paulo Prada and John O'Brien)

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