Now taking World Cup bookings, Rio's slums

Rio De Janeiro: Gun battles still boom through the streets. Drug dealers still ply their trade in the labyrinth of alleyways. Residents of the Rocinha neighborhood still fume over the brutal tactics of the police, who were recently charged with torturing and killing an impoverished bricklayer.

But with hotel rooms in perilously short supply and even modest hostels in Rio de Janeiro charging as much as $450 for a bed during the World Cup in Brazil next year, the residents of Rocinha and other favelas, or slums, are making the most of the city's acute shortage of lodging for the event: They are renting out their homes to fans from around the globe.

Maria Clara dos Santos, 49, is preparing to take as many as 10 World Cup visitors into her three-bedroom home in Rocinha, which commands a stunning view of Ipanema's sun-kissed beaches in the distance. True, dos Santos notes, untreated sewage reeks on her street and steel bars on her windows are needed to deter break-ins, so she is offering guests a comparative bargain - about $50 a night to stay with her during the tournament.

"We can provide a level of human warmth and authenticity that places down below cannot," she said, reflecting the growing popularity of favelas for their vibrant musical scenes, cheaper prices and absence of pretension compared with ritzier parts of town.

Housing tourists in Rio's slums might well turn out to be one of the smoother aspects of preparing for the World Cup, an event that has been more a source of contention for Brazil than a crowning achievement in its push for global acclaim.

Huge cost overruns and chronic delays as well as accidents involving workers falling to their deaths or being crushed by towering cranes are bedeviling the lavish stadiums under construction.

The Brazilian football confederation remains tarnished by bribery scandals at its highest levels. And if the enormous street protests this year against government spending for the World Cup were not enough, anger is now building over the costly transportation projects intended to get soccer fans to the matches. Some will not even be completed before the last goal in the tournament is scored.

"There's a real lack of robust governance structures here to deal with an event this size, so things start breaking and people start dying," said Christopher Gaffney, a scholar at Brazil's Federal Fluminense University who studies large sporting projects. "The absurd prices ahead of the World Cup are part of this phenomenon. People perceive the event as bringing only short-term benefits, so they're seizing on the immediate opportunities around the event."

Brazilian authorities expect the nation to receive as many as 600,000 foreign tourists around the month of the World Cup, which starts in June and will be held in 12 cities. Here in Rio, which will host the tournament's final game, hotel operators are clearly salivating at the coming influx.

One reason: The city has only about 55,400 hotel beds for as many as 300,000 expected visitors, leading rates to surge to an average of about $460 a night, roughly double what they regularly cost, according to a report by Brazil's state tourism agency.

Alfredo Lopes, the president of the Brazil Hotel Industry Association's Rio chapter, said the price increases should be expected.

"Rio's image is being exalted around the world at this time," he said. "It would be absurd to try to regulate hotel prices when there are people prepared to pay what the market determines is the correct price."

Going further, Lopes compared Rio with certain coveted luxury brands.

"Some people are prepared to pay triple the money for a Harley-Davidson than for another motorcycle, and there's a reason for that," he said. "The same goes for Rio," he added.

Never mind that the state of Rio de Janeiro is grappling with a new crime wave, illustrated by a surge in homicides around the city, the shooting of a 25-year-old German tourist in Rocinha and a string of muggings on beaches frequented by foreign tourists.

For those who cannot afford to stay in Rio's more glamorous districts, or who are simply turned off by the city's already high hotel rates, favela lodgings are emerging as an alluring option.

"I wanted to learn more about the heart of Brazil rather than the facade," said Isom Hightower, 30, an aviation consultant from San Francisco now paying around $11 a night for a bunk bed in a Rocinha guesthouse.

After quitting his job to travel in Brazil, Hightower found the lodging through Favela Experience, a startup created by Elliot Rosenberg, a 23-year-old fellow Californian, that promises "affordable World Cup accommodations" in the city's slums. During the tournament, the rate for the bunk bed in the same home may climb to about $50 a night.

Such guesthouses are proliferating, helped in part by the state's sometimes polarizing campaign to take control of dozens of Rio's slums by sending in army troops and police forces, a process commonly called "pacification."

Big security challenges persist, like the abuses by the police recently revealed in Rocinha, but living standards have increased in some communities with Brazil's stronger economy over the past decade. Basic services like public health clinics and cable-car transportation systems have been introduced and homicide rates have fallen sharply in some areas. The effort has also opened new parts of the city to tourism, and some favelas have taken on a chic allure, appearing as backdrops for fashion shoots and videos.

Bob Nadkarni, a 70-year-old British-born painter who moved here more than three decades ago, helped pioneer the concept of the favela guesthouse with The Maze, his aptly named labyrinth in Tavares Bastos, a slum near the old presidential palace. Its private rooms during the World Cup go for about $220 a night.

A real estate frenzy has struck this year in another hillside slum, Vidigal, which overlooks the exclusive beach of Leblon. With investors snapping up properties, basic one-bedroom homes there can cost about $75,000 or more, reflecting bidding wars as hoteliers seek a favela foothold.

"I think it's going to be almost like a Mediterranean village in 10 years," said Cello Macedo, an investor from Sao Paulo who bought a house in Vidigal and is transforming it into an upscale guesthouse, pinning his hopes on a party scene that already thrives in the slum, attracting bohemian travelers from Europe and the United States.

Vinicius Lummertz, a senior official in Brazil's tourism ministry, said that lodgings in Rio's favelas, whether guesthouses, chic hotels or merely rooms in the homes of families, would be welcome to bolster options for travelers. In fact, he painted a relatively rosy picture of Rio's capacity to receive large numbers of visitors during the World Cup.

"Prices for places to stay may jump before the tournament, but they could also go down when people consider all the options," Lummertz said. He said the ministry had compiled an estimate of about 150,000 available places to stay in Rio and nearby resort cities, including hostels, private residences and even short-stay love motels.

Indeed, these establishments, where clients can opt for trysts or overnight stays, will be competing with the guesthouses in the favelas. Of the 80 rooms at the Motel Villa Regia, a love motel near Rio's port, 51 have been converted into what appear to be regular hotel rooms, removing ceiling mirrors, Jacuzzis and illuminated glass cases selling condoms and snacks.

With themed rooms called Hollywood, High Tech, Japonesa and Versailles converted to more conventional uses, not everyone is pleased with the tug of market forces in Rio's hotel industry.
"We have clients who have been coming here for 28 years," said Lourdes Will, manager of the Villa Regia. "They feel abandoned."