Government pressure, Rio hotels lower prices more than 20 percent

05/12/2012 - 16h54

The government has called for lower prices after high nightly rates charged by hotels in Rio de Janeiro caused some foreign delegations to cancel their participation in Rio+20.

In agreement with Flávio Dino, the president of the Brazilian Tourism Institute (Embratur), the network of hotels in the city agreed to lower prices by more than 20% during the environmental conference.

"The agreement between the hotel industry and other operators contracted by Itamaraty, the Brazilian foreign ministry, was to reduce prices by more than 20 percent. The final percentage for the reduction will be decided on Monday," said Flávio Dino, the president of Embratur.

The hotel network should meet with the government again this week and formalize a proposal for the prices. "The government is not trying to go against the law of supply and demand. We're making this request for the hotel network so that, even though demand is heating up, they will offer prices that are more competitive in the market for these events," said Flávio Dino.

The reduction also goes for the contracted parties that were signed on as hotels in Rio. "One of the clauses will be retrospective, that is, for the people who already made their reservations," Dino added. The hotel network also decided that it would do away with the seven-day minimum stay required for people participating in the conference.

The issue was addressed in a meeting arranged by the Chief of Staff, Gleisi Hoffman, at the presidential palace, Planalto. The meeting lasted about three hours and included the ministers José Eduardo Cardozo (Justice), Antônio Patriota (Foreign Relations) and Luis Inácio Adams (Attorney General).

There were also representatives from ABHI-RJ (Brazilian Association of the Hotel Industry in the state of Rio de Janeiro) and from Terramar (a business contracted by Itamaraty as an operator to take care of the reservations for international delegations.)

WORRIES

The decision of the government to pressure the hotel network came days after the European Parliament announced the cancelation of travel plans for the delegation that was going to participate in Rio+20, citing high travel costs.

After the reduction of hotel prices, the government tried to reach out to the delegations that had cancelled their participation in the event: "We're going to get in touch with the groups that cancelled because of the prices. The government action came just in time to prevent a multiplication effect that could threaten the success of the conference or the very image of the country."

Dino affirmed that the availability of vacancies in hotels is "fully sufficient" for the success of Rio+20.

"There are rooms available for the whole time period of the conference. We're not going to have a crisis of availability."

Translated by ANNA EDGERTON