Saturday, August 07, 2010
Dear Reader,
The subject lines of some of the news headlines hitting my inbox this week made me sit up and pay attention. That's not surprising when you read them: "Brazil seeks help from Chinese", "Brazil launches global tourism campaign 4 years early". With a booming economy, and self-sufficiency in energy, why would Brazil need help from the Chinese...and why would anyone need 4 years head start on a marketing campaign?
It turns out that the headlines only revealed part of the story, of course.
I started with the help from the Chinese. The Chinese were asked to help Brazil--but only to vote for Iguaçu Falls, and the Amazon rainforest, as two of the new seven wonders of nature. The Brazilians figured that both would get into the top seven with Chinese support, and (so far) it's working. Inclusion of the waterfall and rainforest in the seven wonders list should help attract foreign tourists. And Brazil could do with some help on that front: they ranked lowest of all Latin countries for foreign tourist numbers and receipts, relative to their GDP and population, in a survey released this month. Domestic tourism, of course, is another story entirely.
Which takes me to the next headline--Brazil's early tourism campaign. As the 2010 World Cup fades in the memory, Brazil launched a global tourism campaign for the next one--four years before the first games kick off in 2014. Their campaign, "Brazil is Calling You" targets 400 million potential tourists, in 100 countries worldwide, this year alone, at a cost of $30m.
It's not as crazy as it sounds. Brazil studied the impact of the 2010 World Cup on South Africa, in terms of global recognition and branding, tourism numbers, and economic growth, and set a challenge to beat it. Their Aquarela 2020 plan is ambitious:
- They aim to sustain growth between 2010 and 2020 at a rate 1% higher than the growth rate for other South American countries.
- For the 2014 World Cup, they predict that 500,000 more tourists will come to Brazil.
- By 2020, they plan to double the number of foreign tourists visiting Brazil to 11.1 million.
- They aim to triple foreign tourist revenue to $17.6 billion by 2020.
The plan includes an investment of $50 billion in new roads, metro lines, airport expansions, and amenities (convention centers, aquariums, boardwalks) in the twelve host cities for the World Cup. Brazil's budget dwarfs South Africa's more modest $5 billion investment for this year's event.
Of course, these tourism and infrastructure upgrades aren't just for foreign tourists; domestic tourists will enjoy them too. And Brazil's domestic tourism market continues to boom. Domestic air traffic grew 27.6% in the first six months of 2010. The figures suggest that trip length increased, too: Brazilians are traveling further in their home country for business and vacations. Their top choice for vacations lies on Brazil's northeast coast. And that's where the hot deal is shaping up.
Fortaleza's share of the $50 billion World Cup investment includes road, metro, and airport upgrades, along with a shiny new convention center, a renovation of the cultural center, South America's largest aquarium, and an extension to the city boardwalk.
Properties in the area of this new boardwalk section are 22-60% lower than those on the current boardwalk. We expect that to change. These properties are ideally located (close to the beach, restaurants and bars, the new aquarium and the cultural center) for domestic tourists, and World Cup aficionados, looking for a short-term let. One-bed units start from 163,000 reals ($92,246), with developer financing over 100 months...the cheapest entry-point you'll find in Fortaleza.
Larger 2-bed units, from 260,000 reals ($147,130) work particularly well for long-term lets, to business executives and middle class professionals, who want to live within walking distance of the beach and nice restaurants and cafes. Again, these units come with developer financing over 100 months. A new free trade zone just outside the city should spur demand for long-term rentals in Fortaleza. Right now, owners in this development are netting a hassle-free 8% yield.
If you'd like a complete information pack on Fortaleza's most exciting rental opportunity, contact Daniel Neves here. Daniel thinks these units offer great potential. In fact, he bought a few for himself, and is renting them long-term. Don't put off contacting Daniel until later if you're really interested, however--these units are selling fast. Click here now to find out more.
Margaret Summerfield
Posted Under:
brazil, appreciation potential, rental yield
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