It has long been held that hosting the Olympics creates an economic boom for the country lucky enough to be selected. Strangely, this notion persists despite evidence to the contrary.
For example, consider the market for vacation rentals in Rio this summer. Reporting back in 2015 on Airbnb’s bid to provide rooms for Olympic tourists in Rio, Reuters made this statement: “It will be the first time a major sporting event has turned to the general public, and their extra rooms, to solve a short-term spike in demand for accommodation. By contrast, in London for the 2012 Olympics some homeowners faced potential fines for renting their properties during the Games.”
But how has hosting the Olympics really impacted rental hosts in Rio?
According to a recent Los Angeles Times article, Brazil has spent nearly $12 billion in public and private money to host South America’s first Olympic Games. This increased spending has, to some degree, trickled down to some of Brazil’s favelas, slums which are home to millions of residents.
Some favelas have seen improvements in sanitation and public transportation. Investment in the favelas has led to some uptick in rentals even prior to this year. In 2013, The Guardian reported that rents in the favelas had increased 6.8 percent more than rent in the wealthy areas over the prior two-year period.
With approximately a quarter of Rio’s population living in favelas, the areas have become somewhat notorious for violence and are sometimes considered as no-go zones. Despite this, recent years have seen an increase in tourism in these areas. According to this piece by The Conversation, it is estimated that at least 50,000 tourists venture to favelas every year.
This increase in tourism has helped hostels in the slums to flourish. Reporting on the success of one such hostel, Reuters notes: “The Favelinha hostel, like others in several of Rio’s more than 1,000 shanty towns, offers more than just cheap housing for the more adventurous among the estimated 500,000 foreign tourists expected to arrive for the Olympics in August.”
Despite some slight improvements in living conditions in the favelas and the presence of hostels in the favelas, Brazil still faced a major issue regarding tourist accommodation for the 2016 Games. Thus, Brazilian officials made the unprecedented move of naming Airbnb the official alternate accommodation service provider for the 2016 Olympic Games.
In theory, this would mean that Rio’s own residents would be able to profit from the nearly 500,000 tourists expected to attend the 2016 Games. Indeed, Airbnb listings in Rio have gone from a paltry 900 listings in 2012 to 25,000 listings today.
Unlike other areas where the sharing economy model has been met with skepticism and even hostility, Rio’s residents seem to welcome the possibility of seeing a profit on the rental front. Perhaps because Rio’s slum tourism industry is increasing, the concept of private individuals opening their homes for Olympic tourists is a natural extension of that process.
The Conversation article notes, however, that only about 1 percent of the Airbnb listings for Rio are in favelas. And of those listings, some are being provided by brokers instead of individual families in the favelas. While it is clear that there is a bump in vacation rentals in Rio’s favelas with the Olympic Games, it is somewhat less clear if the Games will leave a real mark on the favelas in the long run.
As one 12-year-old girl living in a favela just miles from Olympic Park told the Associated Press: “People wanted the Olympics to change things here, too. But they did not change much.”
For those lucky Rio rental hosts who are profiting from the opportunities afforded by the Olympic Games, Payoneer offers flexible ways to get paid. Check out Payoneer’s rental host payment solutions for a way to receive payments from your favorite rental marketplaces.