Tourists planning to flock to Brazil for the World Cup a year from now should brace for some of the world's highest housing, restaurant and transport prices.
Prices have gone through the roof, particularly in the country's tourism gateway Rio, which this month is one of the hosts for the Confederations Cup and in July welcomes Pope Francis for a major Catholic youth festival.
Famous for its annual carnival and spectacular beaches, Rio is now the world's third most expensive city when it comes to hotels, according to a recent Brazilian Tourism Board (Embratur) study.
A hotel room in "The Marvellous City" on average costs US$246.71 a night, compared with US$245.82 in New York and US$196.17 in Paris.
Victor Mameaux and Damien Lambrecht, two 32-year-old Parisians recently rented a 20 square-metre apartment in the trendy Copacabana district for US$1,324 for two weeks.
"We had heard that Rio is a cheap but unsafe city, while in fact it is just the opposite," Mameaux said.
"I paid US$40 for a feijoada [the black bean stew that is Brazil's most beloved dish] without a drink in an Ipanema restaurant. It is more expensive than what I pay in Paris."
Over the past 10 years, restaurant prices have soared 140 per cent, according to the national statistics agency IBGE.
"Everything is expensive except cigarettes," according to Lambrecht, who nevertheless said he saw fewer beggars than in Paris. "It is not surprising. Here you have full employment; at home we have a high jobless rate," he added.
The pair said they never felt unsafe, even touring Dona Marta, the first shantytown that came under police control in 2008 after years in control of drug gangs.
Embratur chief Flavio Dino, meanwhile, blamed the price hikes on an overvalued real in relation to the dollar, and to limited accommodation availability at a time of a high demand due to the upcoming major sporting events.
He also pointed to inadequate infrastructure in terms of goods and services to cope with a growing mass consumption market.
Brazil is, as a result, paying the price of its spectacular development. Economic growth coupled with social programmes have lifted around 40 million Brazilians out of poverty over the past decade.
These new members of the lower middle class are now avid consumers in a country where everything, from shoes to silicon breast implants, can be paid for by instalment.
Brasilia wants to use the World Cup to spur development in the 12 host cities.
"We must increase offers from hotels and airlines to spur competition," said Dino, pointing out that over the past 10 years, the number of passengers on domestic flights has more than doubled to more than 100 million.
There are now more than six million passengers on international flights and Embratur is banking on 10 million by 2020.
Authorities have launched a plan to upgrade the country's congested airports and have invested US$4 billion in the hotel infrastructure.
Professor Daniel Pla, a marketing expert at Sao Paulo's Getulio Vargas Foundation business school, also noted that Brazil was a costly destination.
Domestic travel is expensive - and consequently hobbles mass tourism - because of the monopoly held by the country's two major airlines: TAM and Gol.
Fans will therefore need to have deep pockets to follow their respective teams in the various host cities.
"To go from Rio to Fortaleza in the northeast is as expensive as flying to Miami. The government must break this monopoly," Pla said.
Prices in Rio have skyrocketed since the city was picked in 2009 as host of the 2016 Olympic Games.
Prices in other World Cup host cities such as Fortaleza, Recife and Salvador are lower.
In Rio, the hotel industry has invested around US$1.5 billion in construction of 250 new hotels to bring room capacity from 30,000 today to 50,000 in 2016.
To combat price gouging, it set up a "tourism watchdog".
Embratur's Dino said after meeting industry representatives last week that the government would monitor hotel prices to prevent abuses in World Cup host cities.
"The problem is what happens after 2016. Brazil must not be seen as an expensive destination or we will kill the goose that lays the golden egg and hurt tourism for the coming decades," he warned.
Agence France-PresseTopics: Brazil 2014 World Cup Tourism Rio De Janeiro