Brazil Winds of Change Could Have Significant Impact Here in Orlando – One year from now the world will descend upon Brazil as 32 nations will vie for the treasured World Cup title. 2 years after that, Brazil will hold another world “festa” as the 2016 olympic games will begin. 2 major, game-changing events that could further enhance Brazil’s legitimacy as the 5th largest economic superpower. At the same time, the events could also signify the beginning of an internal change and completely derail the train of progress there. Which way the pendulum swings will provide a significant impact here in Orlando in the coming years.
Last week, Visit Florida ( The tourism marketing arm for the state of Florida) proudly announced at the annual POW-WOW tourism tradeshow ( Travel Industry Association.org) that we received 57 million tourists last year. Again, Orlando sits at the top of the tourism food chain. South America, and Brazil in particular, usually account for about 4 million passengers a year to florida. 2 million of which come to Orlando. 2 million compared to 57 million may not seem like a lot, however if you take into consideration the sheer buying power of the Brazilian tourists, you would be amazed.
My business helps retailers develop tourism sales by working directly with Brazilian and all other demographics of tour operators, travel agencies, etc…I have been helping American companies develop this niche market for the last 20 years and i have witnessed firsthand the buying power of these tourists. In 17 years, my company has created $30-$40-million in sales for retailers in the Central Florida area. Companies like Just for feet, Burlington Coat Factory, hhgregg, Toys r Us, Macys, Sports Authority, and several others. The bulk of these sales came from….you guessed it, Brazilian and Argentine tour groups.
In 1999-2000, Brazil went through a tumultuous period. the devaluation of the Brazilian dollar…the “REAL”, the election of a new president, and many other factors basically caused the market there to take a plunge. The REAL at one time in 2000 was trading at $4.00 for every $1.00 Us Dollar. This served as a catalyst for many businesses here in Orlando to close. Several tour companies, bus companies, and travel agencies closed their doors. The majority of shops on International drive shut their doors. Then, the tragic events of september 11, 2001 took place, and that was the final nail in the coffin. Tourism business although decent from other demographics like the Uk and Canada, was not the same as our South American friends basically closed shop for a few years. And, Orlando paid a heavy price.
Fast forward to the last several years. Brazil has been on a monumental upswing. The economy has been booming as new trade agreements with China and new business investors have come in to partake in their vast natural resources. Tourism from Brazil has skyrocketed once again as many new companies have opened and many who closed their doors back in 2000 have reopened under different names. The Brazilians are coming to Orlando buying real estate in record numbers and their shopping power has once again exploded. For example, right now I am sitting on a schedule of 10,000 tourists from Brazil that will come by bus to the Sports Authority on Sandlake road between June 29 and the end of July…Their Winter School break. In that time frame, this one store will closely approach seven figures in one month with ease.
Why? If you go to Rio Sul ( Shopping mall in Rio de Janiero) or Morumbi shopping mall ( Sao Paulo) and you wanted to buy a pair of shoes, it would cost you $400-$500 for the latest, trendy pair. Here in Orlando in my store, it costs them only $100. The same goes for electronics, perfumes, basically anything. It is literally cheaper for a Brazilian family to fly here, buy all of their stuff for a year and then fly back to Brazil then to walk across the street in their hometown to make purchases.
The other issue is the credit issue. In Brazil, you can buy many things on credit or a payment system with the price inflated. Most of the time it is 10 x payment system.
Last Saturday kicked off the Confederations Cup in Brazil…the warm up tournament to the World cup. It is a huge event, broadcasted here by ESPN. The last several days however there have been nothing but stories of protests, riots, and negative press. Brazilians have had enough of the roller coaster ride as accusations of corruption in the government, mishandling of funds, and other issues have dominated the headlines. And, it appears, This is only the beginning as the Brazilians are taking advantage of the world’s eye on their country.
Brazil has only recently been building some sort of middle class. Their favelas ( Ghettos) make ghettos in new York look like the Holiday Inn. There have been widespread complaints about the education system, the need for better schools, and the need for better hospitals, doctors, and other public services. The amount of money being used to build and renovate the new stadiums and villages for the World Cup and Olympics could be used for these items. The everyday Brazilian is not feeling the advantage of hosting a World Cup and have decided to protest.
The problem with the timing of these protests is that this is supposed to be a proud moment for Brazil…putting their best foot forward and showing the world what Brazil is all about. Over the next ten years they should receive a big surge in investments, tourism, etc..and their economy would continue to grow. However, if these protests and fights with the government continue, which in all likelihood they will, many of the perks associated with hosting these events may be erased. Brazilians may make internal changes, but the overall impact of dollars coming in may not be as great. And, for Orlando, this would not be good.
The tourism cycle usually runs about every four or five years. Four or five years on an upswing and maybe one or two down, and then back up. Because of the surge Brazilians have felt with the awarding of these events, their economy, etc…. The cycle has lasted much longer and the upward swing has stayed. Many experts have predicted the upward swing would last all the way through 2016. Now, maybe not so much.
Personally, I think this gives us as americans even more reason to get rid of the visa requirement for Brazil altogether. This would triple the amount of visitors to Orlando as well as continue the growth of the powerful Brazilian population that is already here. Orlando must be cognizant of the events happening there and hope that a resolution comes quickly. Our friends and partners in the south are admirably standing up for what they believe in. We should be quick to welcome them with open arms and anything we can to help, as they have helped Orlando’s economy immensely over the last 20 years.