Businesses in Rio Experience Slower Carnival in 2014

By Michela DellaMonica, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Known internationally as the cultural expression of the Brazilian people, the Carnival of Rio de Janeiro also became a major source of business for the city. The period between the New Year celebrations and Carnival is considered the high season that local businesses count on, but this year appears to be slower than normal.

Rio’s Carnival in 2014 is expected to bring in around US$950 million according to data from Riotur (Rio’s state tourism department) and the Department of Economic Development of the State of Rio de Janeiro.

Of this total expected, about US$750 million from tourism. The remaining amount of income relates to investments in samba schools, city decorations and organizations of street parties also known as blocos.

According Riotur, the city of Rio’s tourism board, 920,000 tourists are expected for the festivities this year. Yet oddly enough, local businesses such as hostels and hotels have not seen much of a usual flood visitors reserving stays during Carnival.

Even earlier this year before the high season kicked in, local businesses weren’t seeing much of a change in rhythm. The overall slowdown of Brazil’s economy, as well as civil unrest and a bad reputation for being extremely expensive has taken a toll.

Now that it is currently the high season and Carnival has arrived, the hospitality industry hasn’t experienced the volume of guests they are used to. “For the first time in seven years we have not been fully booked months before the start of Carnival,” Lance Donald, owner of The Mango Tree hostel in Ipanema told The Rio Times.

Donald explains, “This I suspect is a factor of three things; the time to travel to Rio and Brazil in 2014 would be for the World Cup factor; there were sixty hostels in Rio when we opened in 2007, now there are more than 200; and finally adverse reporting of security here in the city.”

The Mango Tree hostel is part of an association of hostels in Rio called ACCARJ (Associação de Cama & Café e Albergues do Estado do Rio de Janeiro ) and according to Donald, many of its members have said they still had vacancies for Carnival, some even offering discounts to their high-season rates.

Historically, Carnival has an increase in turnover generated annually ranging from 5 percent to 7 percent. According to city economic officials, tourism this year for Carnival is about ten percent higher than last year with US$665 million was generated during this time in hotels, restaurants, bars and nightclubs.

One bed and breakfast that says they have not seen a difference in business this year compared to last year is Casa Cool Beans in the Santa Teresa neighborhood, as well as a new location in Ipanema. “We are always sold out for Carnival, so the season seems to be the same as other years,” said Lance Horsely, owner of the bed and breakfast.

Though it’s been an unusual market in the hospitality industry, a main upside to the Carnival industry is that it produces jobs. The superintendent of the Department of Economic Development in Rio de Janeiro and author of the study “Supply Chain Economics of Carnival,” Luiz Carlos Prestes Filho, noted that the festivities generate over 250,000 new jobs, which, financially, corresponds thirty percent of the expected financial transactions.

The purchase of raw materials, the making of the costumes and the production of floats involve the work of hundreds of professionals. Alongside manpower to help with the parades in at the Sambódromo, the second biggest time of hiring extra people is at the SAARA street market in Centro, where Carnival enthusiasts shop for costumes and other festive trinkets.