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InterContinental Plans Return to Rio in Time for Olympic Games

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Trump Towers Rio Illustration
Trump Towers Rio will help meet rising office demand in Brazil’s largest city after Sao Paulo. Source: MRP International via Bloomberg

May 13 (Bloomberg) -- InterContinental Hotels Group Plc, the world’s largest provider of hotel accommodation, is returning to Rio de Janeiro after losing its only location to Louvre Hotels Group SAS three years ago.

InterContinental plans to open a Holiday Inn and a Holiday Inn Express before the 2016 Olympics and is looking for other properties closer to Rio’s beaches, said Salo Smaletz, vice president of development for Latin America. Louvre bought the hotel InterContinental managed a few hundred meters from the seashore in the upscale Sao Conrado neighborhood in 2011.

“We want to return to Rio,” Smaletz said today in an interview at Bloomberg’s Rio office. “The market is very attractive and there is currently a deficit of quality hotels.”

The hotels will be in a downtown port area the city is turning into a business and residential hub with a new road network and a light-rail system. Engineering and construction group Odebrecht SA will build and sell the properties and InterContinental will operate them, Smaletz said. A group of investors is building Trump Towers Rio a few blocks from the InterContinental site in the Porto Maravilha project.

The hotel association in Rio, Brazil’s main tourist destination, expects occupancy to surpass 90 percent during the soccer’s World Cup, which starts June 12.

Hotel Rush

Hotel capacity is expected to surge by nearly 50 percent to 51,200 rooms in time for the Olympics, boosted by operators including Marriott International Inc. and Best Western International Inc., according to the Rio Negocios investment promotion agency.

The Holiday Inns will border the Mangue canal built in 1857 to drain nearby swamps and expand one of the main trading points in the Americas. Residents strolled wide boulevards bordering the canal during the late 19th century.

The area turned into a passageway between the international airport and affluent neighborhoods in south Rio with the construction of an elevated highway that began in the late 1950s. Businesses and residents moved out, leaving a cityscape of decaying and abandoned architecture.

The Rio government is predicting 8 billion reais ($3.6 billion) in investments, much of it ahead of the Olympics, to refurbish a 5 square kilometer (2 square mile) section of the port area. The aim is to emulate London’s Canary Wharf and Buenos Aires’s Puerto Madero, revamped waterfront areas that attracted companies and homeowners, Smaletz said.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net Peter Millard, Rob Gloster

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