Brazil acts to combat 'abusive' World Cup prices

(Gustavo Miguel Fernandes/

(Gustavo Miguel Fernandes/


, Last Updated: 9:40 AM ET

Government-backed Brazilian consumer groups on Thursday struck a deal with Rio hoteliers to ban "abusive" pricing and prevent fans being ripped off during the upcoming World Cup.

Sky-high costs have become such a concern in the run-up to the event that the government set up a commission headed by the presidential chief of staff to keep prices in check.

After talks with consumer organizations, the Rio branch of Brazilian hoteliers' association ABIH agreed that hotels must charge no more during the World Cup than they do at New Year and during next month's carnival.

"Brazil is investing for the next 50 years -- not just a month," said Juliana Pereira of consumer affairs monitor Senacon, arguing that lasting tourist infrastructure will help Brazil more than price gouging.

"We must guarantee consumer rights are respected," added Pereira, noting there was a widespread perception at home and abroad that Brazil is an overpriced country.

In a separate development, aviation authorities agreed to a request from airlines to authorize an extra 1,973 domestic flights between June 6 and July 20, a period which includes the Cup.

Some Brazilian airlines reacted earlier this month to government pressure on fares by setting price ceilings -- though the maximum of $1,000 for a domestic return or $450 for a single compares unfavorably with fares in many other countries.

Brasilia has so far resisted allowing foreign airlines to operate domestic routes during the June 12 to July 13 tournament.

Brazil is shelling out an estimated $11 billion to stage the World Cup, and protests against such spending on a sporting jamboree rather than on health and education turned violent last year.

Yet the country hopes to recoup its investment if some three million domestic and 600,000 foreign tourists criss cross the giant country.

Many hotel and ticket packages are being offered through world football body FIFA's accommodation agency MATCH, over whose prices Brazilian state tourism body Embratur has no influence.

MATCH drew up packages with 800 hotels in 12 venue cities shortly after Brazil was awarded the event in 2007 but Embratur has urged tour operators to rein in what is said were "stratospheric" prices.

Pereira told reporters that consumer bodies had agreed to hold a "dialogue without prejudice" with the industry which culminated in Thursday's accord on maximum hotel rates in Rio.

The plan is to expand the accord to all 12 Cup venues.

Pereira said Brazil could not allow its image to be harmed by unscrupulous operators.

"The World Cup is an opportunity to raise the image of the country beyond its borders," she explained.

"We understand that high season rates should be the top price charged for the World Cup and that prices above that could be regarded as abusive. We shall crack down should we find abuses."

Sonia Leite Chami, representing hoteliers, agreed. "Any price surpassing those for the carnival period must count as abusive. We want to play our part in ensuring this event is a success," she said.

Price comparison site Trivago earlier this month put the average price of accommodation in Rio for the tournament at 1,440 reais ($610) a night.

New Year prices in downtown hotels are sometimes much higher.

A Trivago investigation last week showed the cheapest hotel deal it could find for any game was 468 reais ($200), for the June 19 match between Japan and Greece in the northern city of Natal.

Brazilian media meanwhile reported that some unnamed foreign broadcasters are to cut back Brazil-based Cup reporting and switch some coverage to home-based studios.