Business & Economy

With tourism crippled, storied Rio hotel converts to luxury flats

By Carlos A. Moreno

Rio de Janeiro, Jul 16 (EFE).- Hotel Gloria, this city’s first five-star establishment and once the preferred lodging for Brazilian and international notables visiting Rio, is being transformed into a residential building as the industry looks to reduce capacity amid a uncertain future for tourism in world shaped by Covid-19.

The Rio de Janeiro city government granted authorization earlier this year for the conversion of hotels into apartments or commercial space.

A decade ago, this tourist mecca had roughly 30,000 hotel rooms.

By 2016, the number had more than doubled thanks to a building boom spurred by Brazil’s role as venue for the 2014 World Cup and by the International Olympic Committee’s insistence that Rio needed 62,000 rooms to host the 2016 Summer Games.

“We came to have the most modern network in Latin America for the Olympic Games, but the expectations for growth of business, tourism and events did not materialize. And the setback was made worse by the pandemic,” the head of the HoteisRIO industry group, Alfredo Lopes, told Efe.

At least 80 of the city’s hotels shut down because of coronavirus, 12 of them permanently, and nearly 20 establishments are awaiting authorization for conversion, according to figures from HoteisRIO.

Rio still has around 52,000 hotel rooms and though trade has improved from the worst days of the pandemic, occupancy remains at less than 50 percent.

“Conversion of hotels is something that is absolutely necessary because we leapt from 30,000 to 60,000 rooms, and even before the pandemic we knew that we didn’t have the number of tourists or events to guarantee survival,” Lopes said.

Hotel Gloria, the first structure in South America to be built using reinforced concrete, opened in 1922 with a theater, casino, ballrooms and recreation areas.

The Gloria was bought in 2008 by tycoon Eike Batista – then No. 8 on the Forbes List of the world’s wealthiest people – and he promised to make it Brazil’s first six-star hotel in time for the 2014 World Cup.

But the renovations were halted when Batista went bankrupt in 2013.

Mubadala, the Abu Dhabi sovereign wealth fund, acquired Hotel Gloria in 2016 and later sold it to the Opportunity group, who secured approval from municipal authorities to turn it into an apartment building.

The conversion of the iconic Hotel Gloria “is a great step at this moment when the city government is revitalizing the entire downtown,” Lopes said.

Rio de Janeiro enacted this week an ordinance offering incentives to companies interested in renovating nearly 500 derelict buildings in the central city to create affordable housing.

The idea is to build on the improvements that were made ahead of the 2016 Olympics, including the construction of museums and an aquarium and the opening of an electric railway, to make downtown Rio an attractive place to live. EFE cm/dr

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