- Brazil’s domestic spending up 1.4% as consumer confidence rises (InstitutoBrasileiro de Geografia e Estatística (IBGE))
- Luxe goods market in Brazil grown 5.5% since 2012, predicted to rise 30% by 2018 (Euromonitor)
- Hotel giant Accor to launch Mercure Natal to capitalise on growing context of brand-awareness in Brazil
Consumer confidence in Brazil is up as South America’s largest country registers an increase in consumer spending. According to statistics released by the InstitutoBrasileiro de Geografia e Estatística (IBGE), domestic spending reached BRL 799,423.72 million in the second quarter of 2014, up 1.4% from a figure of BRL 788,608.53 million in the first quarter of the year.
Taking consumer spending to new heights and record levels, these figures are a dramatic increase from the BRL 356,610.12 million which marked the average annual spend from 1995 to 2014.
Heralding a welcome boost for the Brazilian economy, these new levels of spending reflect a growing middle class, with Brazil being a focal point for Latin America’s ‘middle wealth category’ growth, as has been shown in the Allianz Global Wealth Report 2014. The Report revealed that those belonging to this category had near-on doubled since the end of the year 2000, to a figure of 13% of the population 13 years later.
And predictions are that this is just the beginning.
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Euromonitor International claims that consumer spending within Brazil will reach levels of US$2.7 trillion by 2030, becoming the fifth largest consumer market in the world by 2023. With the future looking more focused on consumption and growth of wealth, it is no surprise that this expansion is part of a wider move within the realms of Brazilian society to an increased interest in brands and luxury goods.
Worth around US$4.7 billion by the end of 2013, Brazil’s luxe goods market has witnessed a growth of 5.5% from 2012, surging ahead of the average global growth of 3.1%, according to Euromonitor International. Demand is high and ever-growing, as interest in brand names sparks interest, and more and more people look to own something associated with a ‘name’, a brand that they can trust, and one that fits with their increasing aspirations.
Fashion is becoming of greater importance, designer goods are garnering more and more interest and global names are moving into the once-forgotten Brazilian market with fervour. Predictions are that this will result in a 30% growth in the luxury market by 2018, making the Latin American country number 14 in the world’s luxury goods market.
Amidst this desire for ‘association’ and context of brand-awareness, global hotel giant Accor are set to bring their luxury Mercure brand to theRio Grande do Norte city of Natal, with the launch of Mercure Natal. Taking advantage of the booming hotel industry that saw an impressive increase of 6.7% in RevPAR (revenue per available room) across Brazil’s hotels during 2013 (according to Jones Lang LaSalle), as well as the increased interest in the city following its starring role as one of the FIFA World Cup 2014’s host cities, now is an ideal time to develop the new project.
With total hotel revenue in Brazil increasing by a Compound Annual Growth Rate (CAGR) of 14.08% from 2009 to 2013 (according to the Timetric report) and luxe hotels seeing an even greater growth rate of 19.22% CAGR, the new Mercure Natal is looking to capitalise on this.
Andrew Thompson, Group Sales Director of Ritz Property, who are developing the project for Accor, explains,
“The launch of the Accor brand in Rio Grande do Norte’s standout city of Natal is an exciting one. The Mercure Natal project is sure to benefit from its association with the worldwide brand name, and will form part of an impressive recent growth in the number of chain-affiliated hotels in the country (12% in 2013, according to Jones Lang LaSalle).
“The Accor name provides confidence, assurance of quality, and feeds into the emerging interest in Western brands and well-known names within Brazilian society. Associated with a French name, Mercure Natal is on track to be a great success, notably within the domestic market, but with interest also being piqued internationally too, buying into the project is a sound investment.”
Home to some of the most fashionable beaches and neighbourhoods in Natal, Mercure Natal is a contemporary 252-suite, 4-star hotel located in the upmarket district of Ponte Negra, set to open in 2015. The development offers an array of excellent amenities including a business centre, private swimming pool and 24-hour concierge. Just metres from Ponta Negra beach and on a 30 degree elevation, residents have stunning direct views towards the Atlantic Ocean and the Brazilian landmark of the Morro do Careca. Prices start from £110,000.