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Brazil – Injection of Funds to Improve Infrastructure Unlocks North East

August 11, 2008Article by Ray Withers

Thanks to the initial phase of PRODETUR, the Brazilian government’s ‘Action Programme for the Integrated Development of Tourism’, Brazil and its tourism industry have benefited from an injection of more than $670m into infrastructure improvements. This investment has resulted in the creation of 8 airports, construction and improvement of 1020km of highways, recovery of 732,000 sqm of historic heritage sites, environmental preservation of 70,426 hectares and the creation of 149 government bodies to manage these and other tourism activities.

According to the Minister of Institutional Relations, Walfrido dos Mares Guia, 900,000 jobs have been created since 2003. Due to the success of this initiative, PRODETUR 2 has now been set in motion with envisaged investment of around $400m and prolific improvements expected.

At present travel from Natal Airport to the North involves passing around a large estuary, but now thanks to this new government funding a bridge and highway are due to be completed this year, which will reduce travel time to approximately 30 minutes.

More importantly, with the rapid increase in tourism from Europe and the US and arrivals already at over 700,000 per year, the construction of a new “super airport” is now under way. The Sao Gonzalo do Amarante Airport, due to complete by 2009, will be the biggest commercial airport in Latin America and the fourth biggest airport in the world. Bringing in 5 million travellers a year, with a 3600m landing strip designed in preparation for the new 380 Airbus, construction of San Gonzalo will also create 20,000 new permanent jobs.

Thanks to these airport and bridge developments, one of the greatest barriers to Brazilian Tourism growth has been overcome and the flow of passengers to the north east of Brazil has quadrupled between 2002 and 2005. Thomson Holidays recently ranked Brazil as its number 1 target destination, whilst Trail-finders are now looking to start Business Class trips to Brazil. In 2006, 90 new tour operators across Europe started selling holidays in Brazil.

As a result of all the PRODETUR funded ameliorations, tourism has increased from 4.1m (2003) to 5.5m (2005) foreign tourists a year, whilst the income generated by these tourists has increased by 25%. In the Northeast regions of Natal, Recife and Fortaleza, development in tourism and the economy is significant, and the contribution of tourism to GDP has reached 6.32% (over twice the average rate for Brazil). It is predicted that the Brazilian tourism sector should generate 1.2m direct & indirect jobs in Brazil by the end of 2007. In response to these rapidly increasing tourism levels, a range of new flights are being offered to Natal. American Airlines is expected to be the first US airline next year to operate direct flights to Natal from Miami (5 hr flight time), whilst British Airways will fly direct from London. Companies like Thompson are now offering package holidays to these areas at incredibly attractive prices. It is fair to say this is the start of an enormous future global tourism market. As a result, resort demand, rental rates, and land prices are increasing at similarly rapid rates and should mirror the south’s impressive and profitable real estate history.

Property Frontiers have two quite different developments in the Natal area – Porto Dos Corais 50K north of Natal offers villas and apartments from as little as €45,000 in a large gated resort and Natal Ocean Club presents a collection of chic villas and condos with exquisite décor set in 20 acres of tropical gardens and with 300m of private sand beach from £120K.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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