How Brazilians Help To Keep Miami Afloat
Brazil has overtaken Canada as the top foreign source of both tourists and property buyers in the Florida city, which has been suffering through the real estate and financial crises.
MIAMI - Although the Portuguese language has yet to conquer this multi-cultural city, Brazilians still feel very much at home in Miami.
“There is a love affair between Brazilians and Miami, which has helped the economy in both places,” says Rolando Aedo, executive vice-president of the Greater Miami Office of Tourism and Conventions.
In 2012, Brazilians overtook Canadians as the main international tourists in the city, and also overtook Canadians in the acquisition of real estate. Around 690,000 Brazilians visited Miami in 2012, an increase of 8.8% over the previous year, and they are estimated to have spend $1.5 billion.
“This has been very important for us: Tourism has helped the overall economy and Brazilians are at the center of tourism in Miami, in real estate, in commerce and they are opening businesses,” says Aedo.
A year after the beginning of the recent financial crisis, the unemployment rate in the Miami-Dade County was around 12%, construction was in free fall and the foreclosure rate was up.
Miami is relatively close to many main Brazilian cities –separated by an eight-hour flight – and there is a large number of flights between Brazil and Florida, which has contributed to the “intense influx of tourism that we see now,” according to the consul general of Brazil in Miami, Helio Vitor Ramos Filho.
There are currently 123 weekly flights between Brazil and Florida, and the consulate says the number of flights will rise before the end of the year.
The economic growth in Brazil is also an important factor in the rise in Brazilian tourists, since today more Brazilians have the means to travel internationally than 10 or 20 years ago. Favorably currency exchange rates also make international travel more attractive for Brazilian tourists.
According to Aedo, the impact of Brazilians on Florida’s economy has been “incredible,” and he predicts an explosion of Brazilian tourists if the U.S. approves Brazil for the visa-waiver program. The Brazilian consul concurs: “If Brazil were included in the visa-waiver program, there would probably be an explosion of Brazilian tourists in the United States. The visa requirement is still an obstacle for many potential tourists from Brazil, since in Brazil obtaining a visa means additional costs related to having to travel domestically just to get the visa, which can increase the overall cost of a trip substantially,” explains Ramos Filho.
Whether or not Brazil can join the visa-waiver program is up to U.S. authorities, so the Brazilian diplomats can’t know if Brazil has a chance at getting visa-free travel this year. However, the subject is often discussed by diplomats from the two countries, and progress is expected over the course of the next couple years.
On a positive note, the Brazilian consul highlighted that the U.S. has reduced the wait time for a visa for Brazilian visitors, which he said has resulted in an increase in the number of Brazilian tourists in the U.S.
Brazilians’ buying power has helped another pillar of the Miami economy – real estate. In 2011 they overtook the Canadians as the largest group of international buyers in the city.
Liza Mendez, the incoming president of the Miami Real Estate Agents’ Association, said that Brazilians represented 60% of the international buyers in Miami last year.
Ramos Filho concurs that there has been an increase in the number of Brazilians buying property in Miami, a phenomenon he attributes to the 2008 crisis and the resulting drop in prices throughout Florida. Some Brazilian cities were also hit by the real estate bubble, which he said made Miami, with relatively cheap prices, even more attractive.
According to the available numbers, 61% of these Brazilian buyers purchased condominiums, and 42% bought the properties to be able to spend vacations there.
“The impact has been very positive, because it has helped make the real estate industry more dynamic. They continue to come, because the Brazilians are strong, and that creates domino effect in the restaurants and the shopping centers,” says Ramos Filho.
It is possible, though, that this trend will not sit so well with the tax authorities in the U.S. in Brazil. Most Brazilians buy their properties with cash, at an average price of between $200,000 and $299,000, “A little bit more than other international buyers,” according to Mendez.