Brazil plans on spending $187 million to generate and upgrade tourism services and activities in preparation for the next soccer World Cup and the 2016 Summer Olympics Games it will host. The funds will support the country’s efforts to increase employment, revenue, and foreign exchange generated by the sector by consolidating and diversifying the supply of services to visitors.
Tourism is crucial for the two host states, Rio de Janeiro and Pernambuco, which are famed for their seaside resorts. Toursim generates 38 percent of state gross domestic product in Rio de Janeiro and nearly 7 percent in Pernambuco. The 2014 World Cup and the Olympic Games two years later are expected to attract hundreds of thousands of additional visitors.
But these events will pose significant structural challenges for Rio de Janeiro, while Pernambuco needs to diversify a sector that is overly concentrated in terms of both demand and destination. At present 92 percent of tourist arrivals and activity from the domestic are focused along Pernambuco’s coast, in particular the more established destinations of the south. Funds will be used to help upgrade and diversify services in coastal zones and spread tourist activities towards inland mountain areas; create new thematic circuits and museums; establish cultural and visitor centers and exhibition halls; restore historical points of interest; and update the state’s Tourism Master Plan.
Additionally, the loan will fund a marketing campaign and help launch a communication strategy designed to remind visitors that all tourists, not just sports fans, will be welcome during the upcoming events, and to deal with the perception of saturation and rising prices at destinations. It will also contribute to regularizing informal activities, training personnel, and devising the legal framework for a new tourism management model.