Sports Minister Aldo Rebelo said large investments are being made in the sector and there will be more than enough hotel rooms to accommodate the hundreds of thousands of visitors. In fact, he said the main concern in the industry is to avoid an oversupply of rooms.
Rebelo said Rio has already shown it can host big events and that the World Cup host cities will also do a good job.
A lack of accommodation has always been one of the main concerns of World Cup and Olympic organizers. The 2016 Rio organizing committee has acknowledged since the bid stage that Rio's shortage of hotel rooms was its main weakness. The city was selected over Madrid, Tokyo and Chicago in the 2009 vote.
"The private sector's biggest fear is not the lack of rooms," Rebelo said in a conference call. "Instead, the concern is that the increased supply may cause an imbalance in the market. The supply may be much greater than the expected demand."
The minister said the private sector is making significant investments in the hotel industry in Brazil, and that French group Accor will alone be investing $2.5 billion in new hotels in the country through to 2015. Generous incentives have been aimed to spark private investment in new hotels.
"The estimated investments will be important in the expansion of the hotel infrastructure," Rebelo said. "Both for the regular hotel network and the alternatives that will be used as accommodation, which is a resource used by all cities receiving events of this scale."
For the Olympics, organizers have promised to put up to 12,000 people on cruise ships docked at the city's to-be-revamped downtown port. Next year, organizers are to decide whether to construct additional housing villages.
During the recent Rio+20 United Nations conference on sustainable development, Rio Mayor Eduardo Paes had to resort to decreeing a three-day public holiday, closing schools and urging residents to rent out rooms to conference participants.
Rebelo admitted challenges during the conference but noted that the problems were solved and in the end "the visitors faced no major setbacks." He said it was an example of how the city properly handled difficulties.
The minister said budget control is one of the greatest lessons Brazil tried to learn from the London Games. He also mentioned urban mobility, transportation, communications, security and the volunteer program, which he said are essential for the effective organization of the event.
Rebelo reiterated that overall preparations for the World Cup and Olympics are on schedule.
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