The Olympic Games in Rio de Janeiro are over, and the city’s hotels can finally start to adjust to a new normal—whatever that may be.
And there’s already good news: According to data from STR, Rio’s hotel industry saw a “substantially larger” impact as host of the 2016 Summer Olympics than London in 2012 and Beijing in 2008.
During the month of August, Rio de Janeiro hotels posted a 199.2-percent surge in average daily rate to BRL1,250.26. That rate spike, coupled with a 26.6-percent increase in occupancy to 76 percent, led to a 278.6-percent increase in RevPAR to BRL949.84.
Conversely, Beijing saw a 184.2-percent RevPAR increase in 2008, which was mainly due to a 250.1-percent boost in ADR as occupancy actually declined 18.8 percent. In London, RevPAR increased 44.4 percent due solely to an increase in ADR, as the market’s occupancy was nearly flat during the 2012 Olympics.
Troubled Waters
Prior to the 2016 games, Rio de Janeiro hotels struggled to maintain occupancy levels, affected by considerable supply growth, fear over the Zika virus and ongoing political issues. The market’s 47-percent absolute occupancy level during the second quarter of 2016 was the lowest Q2 occupancy level for the market since 2002.
The year-over-year performance increases for Rio de Janeiro during the Olympics also came off of a low comparison base in 2015.
“The real challenge for Rio lies ahead now that there are 23 percent more rooms in the market than a year ago,” Patricia Boo, STR’s area director for Central and South America said in a statement. “This is a much different and less stable market than London and Beijing. While the Olympics performance lift for Rio was higher, the post-Olympics challenges will also be greater. The year after the 2012 Olympics, London experienced a 6 percent increase in demand, likely in part due to the attention the city received during the Olympics. Rio will need that and more to counteract the spike in supply.”