Update on Brazil: Leisure Vs. Corporate Destinations – STR

Graph - Brazil Corporate Destinations Hotel Occupancy - Source STR
Update on Brazil: Leisure vs. Corporate destinations

Since Brazil started to emerge from COVID-19 isolation, domestic leisure demand has returned at a modest level while international and group demand are unlikely to return in the short-term restrictions remain in place. As noted in our previous analysis, preference for Latin America’s regional markets continues to be higher than urban markets. Brazil is no exception.

Now the question is, when will corporate demand come back?

Leisure destinations

While occupancy across Brazil is taking time to recover, many leisure destinations began seeing occupancy improvement in July.

Since that point, STR-defined coastal resort submarkets have seen considerable upward movement with leisure demand growing robustly in the country. In December, coastal resort occupancy was 50.1%. For comparison, interior resorts posted just a 29.9% occupancy level that same month.

The differences between coastal resorts and urban hotels have also been notable. For the year, coastal resorts posted an 18% year-over-year increase in ADR, while urban hotels experienced an 11% decrease.

Corporate destinations

Corporate business and groups are, however, not yet on the road to meaningful recovery—the hotel industry was initially anticipating corporate travel to pick up by the third quarter of 2020.

Cities relying heavily on events, mainly international events, have seen occupancies below 30%. Brasilia, Brazil’s capital, for instance, saw a 22.5% occupancy level in 2020, while in 2019 the market occupancy was 52.3%.

Salvador, in the state of Bahia, also saw substantially lower occupancy than in 2019 due to the market’s dependence on groups and international events.

Click here to read complete article at STR.