Why the World Cup cannot save Brazil's tourism industry

Sat Jun 15, 2013 11:01am EDT
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By Brad Haynes

RECIFE, Brazil (Reuters) - For soccer fans flocking to Confederations Cup matches in Brazil's tropical northeast next week, getting tickets to the stadium should be simple - but two in three will not find accommodations in the host city Recife.

Officials are sending visitors as far as 120 kilometers (75 miles) inland to spend the night, a detour on par with staying in Philadelphia for a New York Knicks game.

The tournament starting Saturday, a dress rehearsal for the 2014 World Cup, will lay bare for visitors what may surprise many: despite gorgeous beaches, a tempting climate and legendary hospitality, Brazil's tourism industry pales next to its neighbors.

The country takes up half the South American continent but receives just a fifth of its international visits. The land of Carnival and beach cocktails ranks behind everywhere in the western hemisphere but Venezuela in foreign tourists per capita.

To be sure, it is exceedingly difficult to find someone who regrets a vacation in Brazil. The country's growing middle class has also provided enough domestic demand to make its tourism industry the world's sixth largest.

As with much of the Brazilian economy, a captive local market seems to have made things too easy for the sector, pushing up prices, sapping competitiveness and contributing to a troubling foreign deficit.

Foreigners' spending in Brazil has scarcely kept pace with inflation over the past five years, while Brazilians themselves have increasingly passed up domestic travel for trips to Miami and Lisbon. The dollar's recent weakness has stoked the trend, resulting in a tourism deficit of $15.6 billion last year and adding to a record current account gap.

How has Brazil - blessed with 7,500 kilometers of sunny coastline, the fame of Rio de Janeiro and the wonders of the Amazon - managed to blow such an open shot on goal?   Continued...

The Arena Pernambuco stadium is seen in Sao Lourenco da Mata, a suburb of Recife June 10, 2013. REUTERS/Helder Tavares