Oct. 5 (Bloomberg) -- Hoteis Othon SA, a Rio de Janeiro- based chain of hotels, rallied for a second day on speculation the 2016 Olympics in Brazil’s second-biggest city will boost tourism.

Hoteis Othon surged 14 percent to 73 centavos in Sao Paulo trading. The hotel chain added 78 percent on Oct. 2, when Rio was awarded the 2016 Olympic Games. Brazil also will host the World Cup in 2014.

“You’ve created an event that’s going to have an effect on tourism that you can’t ignore,” said Rogerio Poppe, who helps manage 9 billion reais ($5.08 billion) of assets at BNY Mellon ARX Investimentos in Rio. “Together with the World Cup in 2014, it helps even more. This created a real need for investment.”

The International Olympic Committee has highlighted concerns about the city’s use of cruise ships for housing because of a lack of hotel space. Rio has 22,500 hotel rooms that meet the Committee’s standards, out of a required 40,000, O Globo newspaper reported Oct. 2, citing Minister of Tourism Luiz Barretto.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net

Last Updated: October 5, 2009 16:46 EDT