Is it possible to measure the size of the loss, at least in São Paulo, since March 2020, in the Hospitality sector?
Yes, it’s possible. In 2019, the hospitality market in the State of São Paulo had 191,000 Uhs (Housing Units), and throughout Brazil, there were 540,000 Uhs. The pandemic presented a situation in 2020 of more than 80% of accumulated losses in the sector, a drop in the occupancy rate of almost 90%, and approximately 15% of the entire hotel offer definitively closed. This means billions of R$ in losses, and millions of direct and indirect jobs lost. There were six-generation hotels closed for the first time. Demand reached zero between April and June 2020. Even considering the industry as essential services, we reached 90% of the offer closed in this period. Afterwards, leisure destinations showed little return on weekends and holidays from July to November 2020. Unfortunately, from December 2020 to March 2021, with the return of the increase in COVID-19 cases and divergent political views, the demand returned back to the very low levels of the last year.
How many jobs do the hospitality and tourism sectors generate in the country? Do you think this segment could expand if gambling would be regulated? Is Brazil lagging behind other countries?
According to the World Tourism Organization (WTO), 10% of all jobs in the world are generated by tourism, as they directly impact 52 segments of the economy, in addition to informal labor markets. Therefore, in Brazil, we consider that with formal and informal jobs, in 2019, more than 50 million Brazilians had their professional or subsistence activities linked to the tourism sector. I defend the idea that approving gaming/casinos will have an impact on Brazil’s macroeconomics. With a legislation that has a liberal and marketing focus, that is, without limiting a specific model of gambling (integrated resorts, casino hotels, urban casino/bingo, online gambling, among others), its location (where it can be installed) and its quantity, we will have opportunities for investments, development and economic growth. Thus, we will present a model with great potential for all types of cities and tourist destinations, with the ability to really boost our country’s economy. We participate as speakers, articulators and leaders of the tourism and gaming markets in Brazil at the main national and international events, both public and private, always defending the appreciation of gambling as a macroeconomic policy of growth and social development. If the legislation on gambling and casinos is approved, initial foreign and national investment in Brazil can reach the order of USD70 billion. In a brief analysis, we have to include here the development of the real estate market. Then, there is the segment of architecture, engineering and construction. After that, we have to add furniture, decoration, lighting, security, and graphics industries in general, automation, technology, among others. In terms of gaming, we have to mention equipment for casinos, restaurants, hotels, shopping malls, convention centers and theaters. Finally, the operation itself in industries such as hospitality, food and beverage, entertainment, cleaning, security and surveillance, technology, software, and all its inputs and contracts for its operation. In addition, there will be investments in the domestic market in the order of billions of reais, as a complement of international investments. In the world, for example, in the G20, all Christian countries have casinos/gaming except from Brazil and two others that are Islamic. It is worth considering that the legal gaming sector (lotteries, Telesena, Jockey Club) also exists in Brazil, generating revenue of R$14.2 billion (USD2.5 billion). Regarding illegal gambling (jogo do bicho, bingos, slots and online), it generates with R$19.9 billion (USD3.52 billion). For instance, USA moves USD240 billion in gambling + tourism, and USD210 billion in exports.
How do you think Government can help the sector to get out of this current pandemic crisis?
Brazil needs to define a new macroeconomic policy, placing as a priority, with heavy investments in technology, communication and incentive policies. This only happens with Agriculture as the main export and economy product. The same policy should be taken in segments with great potential, as is being done in countries such as the USA, France and Spain: Tourism, Gaming and Casinos, as well as the Brazilian Hi-Tech industry, Creative Economy and Sustainability.
Do you believe that the gambling regulation will come out later this year? How would country’s economy enhance if the law would include the entire gaming industry?
We believe that, in order to have a post-pandemic macroeconomic recovery, both the Executive and the Legislative branches should approve the models of Integrated Casino Resort, Hotel Casino, Urban Casino and Online Casino. Based on this scenario, from the initial investment to the operation of the whole process, probably more than 10 million jobs would be generated, activating the vast majority of the country’s economic segments. In addition, billions of reais in taxes would be raised. We know that the public sector is with no funds because of this pandemic.
If, as you say, the legalization of gambling would generate in Brazil millions of new jobs and billions of reais in tax terms, why hasn’t gaming approval happened yet?
About gambling approval and regulation from the point of view of the Executive, Legislative and Judiciary Powers, it needs to be urgently legalized at the federal level, with the approval of different bills presented at the House of Representatives and the Senate. The Executive Power should define a project approving gaming or granting autonomy for States to legislate and regulate the approval of gaming and casinos. There is also the possibility of the Supreme Federal Court (STF) itself to resolve the claim, considering 1946’s decree #9215 of President Eurico Dutra as unconstitutional. In the Legislature, we believe that if the legalization of gaming and casinos would depend on voting, we would obtain immediate approval from the majority of members. If a State regulation were approved, I am sure that the Legislative Assemblies of São Paulo and of the whole Brazil would make it a priority, to increase jobs, foreign exchange and tax raise.