The cancellation of Carnival parties for the second year in a row due to the Covid-19 pandemic should have intense impacts on the Brazilian economy, especially for the events and tourism sectors.
Of the 27 Brazilian capitals, 24 plus the Federal District have officially announced that this year’s revelry has been suspended or postponed, imposing bans on street blocks and a maximum capacity limit for closed events. São Paulo and Rio de Janeiro rescheduled the samba school parades for the Tiradentes holiday.
According to the National Confederation of Commerce in Goods, Services and Tourism (CNC), all this will cause the service sector to lose around R$ 3 billion in profits.
The estimate is part of a study led by the organization every year before Carnival.
In absolute values, CNC predicts that the 2022 event will have revenues close to R$ 6.45 billion.
Before the health crisis, the revelry used to move, on average, R$ 9.5 billion in revenue.
Despite the expected turnover volume for this year being 21.5% higher than that recorded in 2021, when the celebrations were also suspended and the service sector did not profit, it is still 33.7% lower than that observed in the 2020 Carnival, carried out before the pandemic was decreed by the World Health Organization (WHO).
“The Brazilian Carnival still has a lot to recover in the coming years to return to the level of two years ago”, predicts the CNC economist responsible for the research, Fabio Bentes.
“If we don’t suffer any other major blows in the near future, I believe that the R$7 billion in lost revenue that we estimate will be lost between 2021 and 2022 can be recovered in about three years,” he says.
Impacts across the country
According to Bentes, the states that will be most affected after two years without revelry are those that receive more visitors due to Carnival, such as Bahia, São Paulo, Rio de Janeiro, Minas Gerais and Pernambuco.
In Bahia, where one of the largest Carnivals in the country takes place, R$ 1.7 billion was not raised in 2021 and more than 60 thousand people were left without work options. The hole should be enlarged even more in the second year in a row.
The economy of Rio de Janeiro, on the other hand, stopped moving something around R$ 5.5 billion in 2021, according to the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV IBRE). The value is equivalent to 1.4% of Rio de Janeiro’s GDP.
In 2022, the expectation is that revenue will still be 20% lower than in 2020, when the party moved R$ 4 billion in the state’s economy.
In São Paulo, the last Carnival moved around R$3 billion, or 2% of São Paulo’s GDP.
Fewer parties and less travel
According to the Brazilian Association of Events (Abrape), approximately 50,000 revelry-related events were not and will not be held during Carnival (before, during and after).
For comparison purposes, in 2019, 90 thousand events were held. In the Northeast, for example, the loss in the sector will be 8.1 billion reais that will stop circulating only on party days.
“It’s not just the street carnivals in Salvador or Recife that are no longer happening or the parades in São Paulo and Rio de Janeiro that have been postponed — parties across the country have been cancelled, at the same time that many people are no longer traveling. “, says Doreni Caramori Júnior, president of Abrape. “The entire chair of the events and tourism sector is being shaken.”
Airline and hospitality companies are also expected to earn less. CNC’s expectation is that the segment of accommodation services in hotels and inns will move around R$ 660 million on holiday, when in the same period of 2020 the forecast was R$ 860 million.
Even so, the tourism sector hopes to recover part of the losses in 2021. In cities like Salvador and Rio de Janeiro, hotel occupancy is above 80%, even without the presence of street parties.
Among entrepreneurs in the bar and restaurant sector there is also a sense of optimism. “Bars and restaurants are optimistic about the holiday and the expectation of revenue varies from 20 to 30% in coastal cities”, says Paulo Solmucci, CEO of Abrasel.
According to a survey by the National Confederation of Commerce in Goods, Services and Tourism, the food away-from-home segment, represented by bars and restaurants, should generate something around R$ 2.78 billion in the four days of the holiday. Two years ago, the forecast was R$ 4.8 billion.
According to Solmucci, consumers are already feeling safer to go to bars and restaurants. Many people who in pre-pandemic years used to accompany Carnival blocks or go to parties should also exchange these activities for outings with family and friends to calmer places.
“However, in cities like Belo Horizonte, which will not have the street party, the sector’s revenue expectation tends to be reduced due to the smaller number of tourists present in the capital of Minas Gerais”, he says.
No party, no work
But according to Fabio Bentes, there is no doubt that workers, formal and informal, will be greatly impacted by the second year without Carnival.
A street block, for example, moves a chain of workers that ranges from renters and assemblers of electric trios to street vendors and recyclable material collectors.
In São Paulo alone, for example, 12,000 temporary vacancies were opened for street vendors of drinks in 2020. With the cancellation of the blocks and the postponement of the parade in the city, there is no guarantee of profit from the revelry for these people.
And it’s not just the vendors who feel the impact of the empty streets during Carnival. According to the president of the National Association of Recyclable Material Waste Pickers (Ancat), Roberto Rocha, revelry is the most important time of year for waste pickers.
“The festive period has always been an excellent opportunity for extra income. And this ‘plus’ is making a huge difference in the lives of many families”, he says. “In 2020, we partnered with the beverage and food sector and, in addition to the amount received in the cooperatives for the material collected, the workers also earned for the cleaning service”.
According to Rocha, the profits obtained by the collectors during Carnival used to represent up to 30% of the entire monthly income.
Despite the initiatives of some private companies to distribute aid to collectors and street vendors, a good part of the earnings forecast for this time of year will no longer be part of the family income of these Brazilians.
‘Families suffering and in need of help’
Mazinho Twister, as Francisco Aparecido de Alencar is known, 47 years old, owns a company that manufactures and leases electric trios. Every year during Carnival, he usually rents his vehicles for up to 30 events held throughout the state of São Paulo.
In 2022, Mazinho has all his 14 electric trios parked in the garage. “My profit was zero in the last two years. I had 22 employees and I suspended all of them, with the exception of a boy who takes care of the garage and helps in the conservation of the trios”, says the businessman, who lives in Campinas.
“Most of those laid off are currently living on government aid alone,” he says.
Mazinho still regrets the situation of many of his colleagues in the field, who were forced to sell their trios due to lack of work. “I’m resisting for now, but I’m behind on the rent for the garage where I keep the vehicles and R$90,000 in debt in the bank”, he says.
The desire to take to the streets is shared by Luiz Adolpho, president of the Homem da Meia-Noite club, one of the most traditional and famous blocks in Olinda. “I’m 57 years old and before the pandemic I don’t remember a Carnival where I didn’t play in the street”, he says.
The block of 90 years of history has not paraded for two years and has taken the decision not to participate in closed events either. It maintains contact with the public only through clips released by social networks and visits to its headquarters, with mandatory mask and presentation of proof of vaccination.
According to Adolpho, Homem da Meia-Noite employs an average of 450 to 600 people every year, including musicians, sound operators, security guards and assemblers. “Unfortunately, we haven’t been able to keep all the employees since the beginning of the pandemic. We collected basic food baskets to help the most needy, but it is not possible to serve everyone who was harmed by the cancellation of the blocks in Olinda and Recife”, laments the Pernambuco native.
“Actually, there is a great need to welcome people who have no income due to all the Carnival events that will not take place throughout Brazil. We received reports of many families suffering and in need of help”.
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