Government is concerned with spike in hotel prices for Rio+20

The government stepped in and negotiated a reduction of at least 20% in hotel prices during the Rio+20 United Nations Sustainable Development Conference that will take place between June 15 and 23.

According to the president of the Brazilian Institute of Tourism (Embratur”), Flávio Dino, the reduction could be more, “…We have hopes that the reduction will be more than 20%, maybe as much as 30%,” he declared.

The government stepped up after it was announced that a delegation from the European Parliament had decided to cancel its participation due to “exorbitant hotel prices in Rio de Janeiro.” That prompted the president of the Chamber of Deputies, Marco Maia (PT-RS) to take action: he announced that Congress would not foot the bill for members who attended the conference because of the high prices.

“What we have are isolated cancellations. There is not a generalized movement because of prices. The government acted in a timely and correct manner to deal with a situation that could seriously stain the country’s image,” declared Flávio Dino.

In fact, the government came down hard on the Rio hotel segment. It was made clear to representatives of the hotels that their presence was mandatory at a meeting in Brasilia. The representatives found themselves facing heavy artillery: across the negotiating table were the president’s Chief of Staff (“chefe da Casa Civil”), Gleisi Hoffmann; the ministers of Foreign Relations (“Relações Exteriores”), Antonio Patriota; and Justice (“Justiça”), José Eduardo Cardozo; and the government’s top lawyer (“advogado-geral da União”), Luís Inácio Adams. The meeting at the Palácio do Planalto lasted more than three hours.

It was agreed that the price reduction would be retroactive, that is, applied to reservations already contracted for the conference. And there would no longer be a minimum occupancy of seven days that many hotels were demanding.

Dino, of Embratur, explained that the government was not imposing a price list (“tabelamento de preços”) or revoking the law of supply and demand.

 “We just convinced them to charge prices more compatible with the event,” the president of Embratur said. “Now, if, after this agreement, we get more information about price abuses, we will take further action. For example, the Ministry of Justice will go into action.”

Meanwhile, the minister of Environment, Izabella Teixeira, denied that the cancellation by an official delegation from the European Parliament because of hotel prices meant that the Rio+20 Conference was in any way threatened.

“There are other people from the European Union who will participate. We have confirmations. There is no rush to get out,” said the minister.

Ambassador André Correa do Lago, the diplomat who is Brazil’s chief negotiator for the Rio+20 Sustainable Development Conference declared that some of the cancellations were due to the economic situation in various European countries and did not reflect on the importance of Rio+20.

“It is generally recognized that this event is of major importance. That is why we have confirmations of the participation of over 100 heads of state and government. What happens is that countries have their own problems, elections, crises and other circumstances. All this is normal. We understand that each country has to decide whether or not to attend Rio+20, and if so, at which level; that is, sending the leader of the nation or representatives,” explained Correa do Lago.