¶ … Influx of Money Impact Hospitality Sector in Brazil how influx of money impact brazil'S HOSPITALITY SECTOR

How Money Influx from World Cup 2014 Impact Brazil's Hospitality Sector

How Money Influx from World Cup 2014 Impact Brazil's Hospitality Sector

Action plan

The literature review seeks to scrutinize and evaluate the probable effects of the influx of money from 2014 World Cup in Brazil in relation to growth and development of the country's hospitality industry (Jones 2012). Since the major declaration (October 2007) by FIFA that Brazil shall be hosting the biggest world event, the hospitality sector has embarked on building new hotels, bistros, and lodges. The sector has also stepped up efforts to renovate existing facilities ahead of the tournament slated for June 2014. Although preparations are still underway, an influx of visitors and money is inevitable with considerable accommodation bookings reported across the country (Jones 2012).

Influx of Money is vital to Hospitality Sector's Infrastructural Expansion

When the world football governing body (FIFA) awarded Brazil the right to host 2014 World Cup back in October 2007, most economic analysts saw it as a perfect opportunity to show the world some of the tremendous economic and social advances the country has made in the previous 15 to 20 years (Maennig & Zimbalist 2012). The reality of the undertaking is slowly becoming clear as the South American country only remains with just over a year before putting on the greatest sports event. Brazil's transport infrastructure is still struggling to keep pace with the country's rapid economic growth in past few years. The highly publicized announcement by FIFA that Brazil would hosting the 2014 World Cup was phenomenal as it led to several economic and social makeover (Maennig & Zimbalist 2012). The government through country's sports agencies in collaboration with the world football governing body embarked on a long-term program that would see total revival of hospitality and sports infrastructure particularly in the 12 cities scheduled to host the biggest sports event ever. Brazil's hospitality sector is one of the greatest beneficiaries of the forthcoming event. In effect, the government and the private sector have to work closely to ensure success of the FIFA World Cup notwithstanding infrastructural setbacks that have hampered realization of economic growth and development for the past two decades (Maennig & Zimbalist 2012).

Influx of money vital for economy and reputation of Hospitality Industry

According to Burt (2012), an influx of new money into Brazil has substantially improved the economy of the country. The greatest beneficiaries are business people and organizations in the field of hospitality (Burt 2012 p. 2). Television deals have improved the finances of football clubs with most players becoming more reluctant to leave their clubs for other destinations. The increase in clubs' income has effectively led to an upward trend in remuneration of players particularly among clubs in Brazil. Better salaries and wages would result in improved revenue in the hospitality sector as local and foreign players in still in contract with their clubs (in Brazil) would seek better accommodation among other services (Burt 2012 p. 2). As the biggest event approaches, better deals are inevitable in anticipation of the hype and reputation that the country and local clubs would build at the end of it all. The national team's performance also has an influence on the overall reputation of the country and local clubs. Local players would become more marketable in the local scene as well as in the international front. One of the greatest challenges however, is the capacity of the hospitality sector to effectively and efficiently handle the expected influx of visitors projected at 600, 000 (Burt 2012 p. 2).

Government and the private sector play critical role for success of the industry

Jonathan Wheatley (2007) attest to the size of the delegation that clearly shows the ecstasy and bliss felt around Brazil (Jonathan 2007 p. 1). FIFA World Cup was finally making its way back to the South America's greatest soccer nation 64 years after the 1950 competition. The locals view the sporting event as a prime opportunity to prove to the whole world the economic, political, and cultural advances of the continent-size country. The Ministry of Tourism expects an overwhelming number of foreign tourists with a mission to tour around the country to watch some of its beautiful scenery, wild animals, and vegetation (Jonathan 2007 p. 1). However, the greatest percentage of would consist of those tourists mainly coming to Brazil to watch football.

The hotel business sector...

Despite the major logistical challenges the country is facing owing to its huge population of about 196 people (according to World Bank), the government in collaboration with the private sector have stepped in to advance financial support to the hospitality sector (Jonathan 2007 p. 1). In effect, new hotels, lodges, and other recreational facilities have been noticeable especially in the 12 cities scheduled to host matches. Despite an imminent influx of money, the country still faces the challenge of lacking a more consolidated hotel industry. Incidentally, the number of markets for entrepreneurial projects has continued to grow mainly due to the world biggest slated for June 2014. Similarly, local hotels have had an irresistible bookings for the period of the sport event (Jonathan 2007 p. 1).
The 2014 World Cup to determine future prospects of Hospitality Industry

According to the World Cup highlights (Mail on Sunday, Oct. 2012), Brazil expects over 600, 000 visitors for a month-long tournament apart from the 5.2 million tourists that visit the country annually. The number presents a definite influx of money from different parts of the world (Sunday Mail 2012). The event has also put Brazil to test as to whether it has the capacity to accommodate and impress the rest of the world. In essence, the entire event would determine the destiny of the hospitality industry given the fact that the government established the Ministry of Tourism less than a decade ago (Sunday Mail 2012). The 2014 World would determine the future prospects of hospitality industry even for those tourists expected to visit host cities such as Rio de Janeiro, Brasilia, Sao Paulo, Manaus, Fortaleza, Natal, Recipe, Salvador, Cuiaba, Belo Horizonte, Curitiba, and Porto Alegre. In his book, Special events: A new generation and the next frontier, Goldblatt (2011) indicate that the 2014 World Cup has the potential to inject a lot of revenue for hotels, restaurants, and lodges (Goldblatt 2011 p. 16). He argues that tourism sector is and shall continue to be the greatest recipient of the colossal amounts of money foreigners bring into the country. This not only happens during such international events but also manifest considering the growth in the number of tourists visiting Brazil. Today, the population of foreign tourists visiting Brazil stand at 5.2 million and the number could possibly go up after the World Cup (Goldblatt 2011 p. 16).

Infrastructural Challenges a major threat to economic growth

Jones (2012) projects great returns for the industry despite infrastructural challenges. Brazil is struggling with its transport infrastructure in spite of a significant economic growth that has continued to inspire the economy and her people. The major concern of Maennig & Zimbalist (2012) is the outcome of the world event slated to take place in Brazil between June 12 and July 13, 2014. They argue that all preparations ahead of the tournament would determine the future prospects of the hospitality sector. The state and the private sector have invested heavily in the building of new hotels as well as renovating the existing ones. This move aims at ensuring the visitors get proper accommodation services not only in the host cities but also in other smaller towns. The imminent influx of money is a clear sign of economic progress that would essentially help the country achieve some of its important development goals. Louw (2012) is however skeptical about the probable benefits associated with 2014 FIFA World Cup. He believes that such event may result to serious violation of the Law. Apparently, government agencies as well as private companies have the tendency to breach the Law while holding the assumption that they have an obligation of protecting commercial rights of important events that bring together different continents and countries. However, such tendency would be inevitable as countries and organizations all over the world have a role to play in protecting their reputation in disregard of the apparent impact on the Law.

Conclusion

The state through its hospitality department must take a leading role to facilitate the building of new hotel, lodges or inns and refurbishment of existing hospitality facilities across major town and cities in Brazil (Jones 2012). Several economic and investment analysts project an overwhelming growth of the South American country with tons of new hotels built in readiness for the 2014 World Cup. The hospitality industry is not only booming in Brazil (the host country) but also the neighboring countries in the continent. These South American countries expect an influx of visitors from all corners of the world, which…