Hotel Room Price Crisis in Rio de Janeiro, Brazil - Essay Example

Hotel Room Price Crisis in Rio de Janeiro, Brazil Grade (Feb. 25th, Hotel Room Price Crisis in Rio de Janeiro, Brazil Hotel room prices in Rio de Janeiro, Brazil has hiked at a stratospheric rate, making the football fans who had planned to stay in Rio de Janeiro during the 2014 FIFA world cup tournament have slim chances of enjoying the most coveted event in the world (Philips, 2013). Ethics and independence is a topic learnt in class, which holds that while businesses are supposed to operate independently and free of unnecessary control and interference by the government, in turn, the business are supposed to uphold the principles of ethics, which then defines what is right or wrong, good or bad business practices. Therefore, while it is the business of private business to run their business activities free of government interference, the situation in Rio de Janeiro has broken all the rule of business ethics and independence. This is because, the hotels and guest houses in the city have hiked the prices of hotel rooms for the entire World Cup tournament event, such that the Brazilian government and the world football body FIFA ,are now being called upon to intervene and save the situation. The Brazilian Tourism Institute has written to FIFA asking that the body to intervene in the situation by trying to control the spiraling hotel rooms and accommodation prices ahead of the 2014 World Cup kick off (Jones, 2013). The trend in the rise of the hotel room prices has shown that by the time the tournament kicks off, the prices of the accommodation facilities in the city will have increased up to five times their normal prices, bringing the prices to a level that is hardly affordable by many fans from different parts of the world, who would like to be part of the spectators in the historic event. The concept of ethics and independence is one complex concept, considering that matters of ethics are not definitive, and they can be adjudged differently, depending on the perception of an individual. In this case, the ‘Hotel Room Price Crisis in Rio de Janeiro’ is an ethical issue, which may be perceived differently by different parties to the crisis, with the hotels and other accommodation business considering the skyrocketing prices of the accommodation facilities as good and thus ethical, since they are just taking advantage of a historic business opportunity. On the other hand, the fans and the concerned world football control body FIFA, considers such a hike in prices as wrong and therefore unethical, since the hike spoils the chances of many football fans, from different parts of the world, getting an opportunity to attend and enjoy the fun that comes with the tournament. Price increase is an acceptable practice in the world of business, considering that circumstances and situations affecting businesses keep changing, thus demanding a respective change in prices. However, price change can only be an acceptable business practice, where it is found to be fair to all the affected parties. Nonetheless, the situation in Rio de Janeiro has beat the logic of business fairness, with close to five times hike in prices, and therefore can collectively be termed as unethical. The crisis has seen many fans and even local spectators unable to meet the required prices, thus prompting the search for an alternative accommodation arrangement, which has taken them to the Rio Slums, which are often regarded dangerous, owing to the gun battles and drug dealing and peddling in the streets of the slums (Gomes, 2013). Nevertheless, with the recent unprecedented hike in the prices of hotel rooms and other accommodation facilities, where even a small room in a modest hotel is costing $450 per bed within the city, many are left without any other options, but to seek the slum accommodation (Romero, 2013). The residents of the city favelas or slums are taking advantage of the acute shortage of the accommodation for the fans to rent their homes to fans from different parts of the world. Maria Clara dos Santos, who is a resident of the Rocinha slum, is preparing her three-bed-room house to receive at least 10 visitors during the World Cup event, promising them of warmth and welcoming environment at her home. Owing to the untreated sewage leaks in her street and the not-so-comfortable housing conditions, Maria is offering her accommodation facility at a cost of $50 per night, to have football fans stay with her during the tournament (Romero, 2013). However, the show of kindness and willingness of such residents to accommodate visitors from different parts of the world into their homes is one of a kind, making the Rio de Janeiro 2014 World Cup a unique experience, for an event that has stood out as more of a contention than achievement for the country, which has faced numerous opposition, protests and street battles over the last one year regarding the same. Rio de Janeiro is one of the most loved cities in the world, and it has earned itself the nickname of "The Marvelous City" over the years, owing to its ability to attract a large number of tourists and visitors from all over the world (Gomes, 2013). However, the ‘Hotel Room Price Crisis in Rio de Janeiro’ has turned the coveted city into "the expensive city", considering that at a price of $450 per night, the accommodation facilities in Rio de Janeiro ranks as the most expensive currently, compared to accommodation in other lavish cities such as New York that charges an average of ($246) per night, while Miami charges an average of $294 per night, and the accommodation in Paris is even cheaper, at $196 per night (Gomes, 2013). Nevertheless, considering that Rio de Janeiro is a city with persistent endurance when it comes to popularity, where even the demonstrations and protests that characterized its streets in the last few months did not taint its name, the price crisis is not poised to taint the name and image of the city either, and in fact, it is set to boost the fame and image of the city in the global ranks, as one of the coveted city and tourist destination, which attracts high prices and people will still be willing to visit. Another factor that has contributed to the hike in the prices of accommodation in Rio de Janeiro is the fact that the city is also set to hold the entire World Olympic Games in 2016, something that has also increased the status and image of the city even further. Therefore, while increasing the prices of accommodation to such alarming levels, the hoteliers and owners of accommodation business in Rio de Janeiro are preparing for an even bigger event that will bring in more fans and athletes, and as such they may be seeking to set the bar high the earliest possible, in anticipation of the 2016 Olympic games (Gomes, 2013). Nevertheless, the price crisis is not the only misfortune that is surrounding the Rio de Janeiro 2014 World Cup tournament preparation, considering that the preparation of the stadiums has also been faced by similar challenges, such as delays, accidents and deaths of the construction workers, as well as the anger that has build amongst the residents of the city, owing to the increased cost of transportation that has characterized the city in the recent past months (Romero, 2013). Thus, while it could be easy to single out the ‘Hotel Room Price Crisis in Rio de Janeiro’ as the single most glaring crisis facing the preparations of the tournament, there are many other crises that are affecting the residents of the city, thus making the overall tournament preparation one that will affect the football fan-base in a great way. The Rio de Janeiro Hotel price crisis is a purely ethical and independence business scenario, owing to the level of self-regulation that is observed in the preparation. It is an event where ethics has to play the great role of regulating how the businesses operate and serves the visitors to the city, and the business in the city have proved to be unethical in respect to charging the fans high prices for the services offered. The expected tourists from different parts of the world that are predicted to visit Rio de Janeiro during the month of the World Cup tournament run into 600,000 visitors, an indication that it is a city with a very high potential of attracting visitors and tourists (Gomes, 2013). However, the most disturbing aspect of the preparation for the event is that; the government does not seem to have established the necessary structures and control mechanisms, to ensure that the tournament goes on smoothly. Instead, the government seems to have taken a back seat in the whole affair, and left the private businesses and operators run the show, an aspect that has made coordination of the different players in the event preparation very difficult. Nevertheless, in a sudden turn of events, the hoteliers and the owners of accommodation facilities, in a move to be ethical in their business practices and avoid abusing the independence that comes with private business practice, have agreed to limit the prices charged for accommodation and hotel rooms during the World Cup tournament event (Paris, 2014). The newly agreed charging price for all the hotel rooms and accommodation facilities will be up to the normal prices that are charged during the New Year festivities. Further, and in joining the show of business ethics, the Brazilian airlines have also set the cost of air flights from one football match venue to other at $260 on the upper limit (Paris, 2014). This latest move is an indication that good business ethics and independence can contribute to harmony and welfare of the society. References Gomes, L. (July 31, 2013). Rio de Janeiros World Cup and Olympic hostels boom. BBC NEWS. Retrieved February 25, 2014 from http://www.bbc.co.uk/news/business-23440232 Jones, W. (September 17, 2013).Brazil Struggles to Control Hotel Rates. The Rio Times, Retrieved February 25, 2014 from http://riotimesonline.com/brazil-news/rio-business/brazil-struggles-to-control-hotel-rates/ Paris, N. (January 17, 2014).World Cup: Rio de Janeiro hotel price limit agreed. Telegraph. Retrieved February 25, 2014 from http://www.telegraph.co.uk/travel/travelnews/10579734/World-Cup-Rio-de-Janeiro-hotel-price-limit-agreed.html Phillips, D. (October 16, 2013). Hotel price hikes in Brazil leave favela guesthouses as affordable option. The Guardian. Retrieved February 25, 2014 from http://www.theguardian.com/football/2013/oct/16/hotel-price-hike-brazil-favela-alternative Romero, S. (December 21, 2013). Now Taking World Cup Bookings, Rio’s Slums. The New York Times. Retrieved February 25, 2014 from http://www.nytimes.com/2013/12/22/world/americas/now-taking-world-cup-bookings-rios-slums.html?_r=0 Read More