FEATURE-Why the World Cup cannot save Brazil's tourism industry

Sat Jun 15, 2013 7:59am EDT

By Brad Haynes
    RECIFE, Brazil, June 15 (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?
    A foreign fan heading to a soccer match in Brazil next week
may find one of the answers right away - at the hotel counter.
    Even in Recife's more expensive hotels, introducing oneself
in English can prompt blank stares and embarrassed grins. In one
case, the concierge at a hotel - FIFA-certified accommodation
for the World Cup - went silent after such an introduction.
    "Hello, my name is?" he then asked, furrowing his brow.
    Due to Brazil's size, isolation and uneven education, most
residents have little or no contact with a second language.
Brazil's English proficiency ranked in the bottom 15 percent of
a global study by teaching company Education First.
    Resorts, restaurants and tourism outfits therefore pay - and
charge - a hefty premium for bilingual service.
    "If you can afford English lessons, you're not going to work
the front desk of a hotel," said Gunde Schneider, a Brazilian of
German descent with a bed-and-breakfast in nearby Gravata. "More
likely, you're the owner of the hotel."
    
    THE ROAD TO RECIFE
    For the American fan in Recife, however, a misunderstanding
at the front desk will be just one in a string of frustrations.
    The hassle starts before setting foot in Brazil, with a visa
process that gives a taste of the country's notorious
bureaucracy.
    Neighboring countries from Argentina to Bolivia also have
"reciprocity fees" paid at the airport in the name of parity
with U.S. visa costs. Brazil takes it a step further, requiring
Americans to apply at a consulate and wait a week or more for an
entrance visa, mimicking the burden on Brazilians.
    The cost: at least $160.
    An easy flight to Recife will also be tough to find, due to
a legacy of barriers to foreign airlines. Of over 100 nations
that have signed an open skies agreement with the United States,
Brazil is one of a handful that have not put it into practice.
    As a result, flights funnel into Sao Paulo and Rio, where
airports are packed beyond capacity. Foreign visitors to
Brazil's northeast can often watch their final destinations
through the window as they fly south to catch connecting flights
from the major hubs - a six-hour round trip.
    When a fan lands in Recife, the journey is still far from
over. The wait in the cab line should last at least half an hour
thanks to the monopoly of the airport taxi cooperative - one of
countless barriers to competition driving up prices.
    The World Economic Forum also blames Brazilian policies
discouraging foreign investment in land, airlines and tourism
services for the lack of affordable offerings.
    
    LINGERING STIGMA
    Brazilians are quicker to blame the state of the tourism
industry on a tarnished reputation from the 1990s, when a
chaotic economy and rampant gang violence deterred visitors,
shuttering one in five of Recife's hotels.
    In a public survey at the 2010 World Cup, Brazil's tourism
ministry found safety concerns were the overwhelming reason
tourists gave for why they would not visit Brazil in 2014 - this
coming from soccer fans in South Africa.
    Brazilian officials say the tournament will refresh that
reputation, just as it gave South Africans a chance to turn the
page on their fraught political history.
    "The visibility will give a broader vision to the world,"
said Valdir Simão, a senior Brazilian tourism official,
highlighting the diversity of a dozen host cities. "People will
see: Brazil is not an exotic destination."
    But the problems are bigger than bad public relations.
    The WEF ranked Brazil's natural resources for tourism as the
best in the world, but the competitiveness of its travel
industry has slipped to 51st in a ranking of 140 nations.
    Harmful regulations, high prices and bad roads put Brazil
among the worst 25 countries in those categories - below the
likes of Kazakhstan and Gambia in each respect.
    The two in three visiting fans without lodging in Recife
next week may drive as little as 30 minutes to hotels along the
coast or as much as two hours inland for accommodations.
    At the far reaches of that radius is Caruaru, a sprawling,
low-slung city of 350,000 where newly paved streets wind among
walls of exposed cinder block.
    The city is used to drawing tourists for its truck races and
traditional music festivals, one of which is in full swing this
month. Caruaru bills the event as "The World's Biggest and Best
Saint John's Festival."
    Caruaru's hotels seem blithe about the Confederations Cup.
With lodging in short supply and local vacationers eager to
attend the festival, major hotels are already booked nearly
every weekend this month.
    Consulted a week ahead, the only rooms left at the Hotel
Village Caruaru on Saturday were going for 1,000 reais ($470) a
night.
  ($1 = 2.14 Brazilian reais)

 (Editing by Brian Winter and Jackie Frank)
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