Real Bargain.

Since the devaluation, Brazil's tourism industry has taken off, and Salvador in Bahia state is reaping the benefits.

BACK IN 1991, JUST SIX INTERNATIONAL FLIGHTS LANDED every week in Salvador da Bahia, Brazil's fourth-largest metropolis, located in the northeastern state of Bahia (population: 2.5 million). Today, 34 international flights touch down each week at its Luis Eduardo Magalhaes airport.

The increase has come about because Salvador, like many other Brazilian cities, is happily riding the wave of the country's recent tourism boom.

Last year, 4.8 million foreigners visited Brazil, 65% more than in 1997. According to the World Trade Organization, Brazil was the best-performing tourism destination in South America last year. expanding its receipts by 10%, versus 9% for Bolivia, 9% for Peru and 7% for Argentina.

Since the government devalued the real last January, the number of foreign tourists visiting Brazil has doubled, according to Embratur, the country's government-owned tourism agency. Some 870 charter planes carrying foreign tourists landed in Brazil in the first quarter, versus 493 in the same period last year. While most of the flights came from neighboring Argentina, more and more Europeans and Americans are also coming to Brazil, looking for devaluation bargains.

They're not just flocking to Rio de Janeiro, either. Salvador, located 750 miles northeast of Rio, entertained 350,000 foreign visitors last year, well above its 144,000 in 1993.

Paulo Gaudenzi, Bahia's tourism secretary, says the increase is due more to recent efforts to revitalize the city than the effect of Brazil's currency devaluation. "Summer packages were sold before the devaluation," he insists.

Knocking on heaven's door. Indeed, over the last eight years, the state has poured US$1.5 billion into its tourism sector, half of which went toward a face lift of Salvador. New roads were built to provide access to near-virgin beaches, the city's sewage system is being improved to avoid polluting the rivers that cross the city and the airport is being expanded.

That's not all. The government is in the final stages of a $60 million project to renovate 350 colonial-era buildings in Pelourinho, the historical center of Brazil's original capital city (1549-1763). It is on the UNESCO list of World Heritage sites deserving special protection, but until recently, the area was a haven for drugs and prostitution. The city is now clean, well lit and safer than other Brazilian tourism destinations such as Rio de Janeiro and Sao Paulo. "If this is not paradise, we certainly are door-to-door with heaven," Gaudenzi recently joked at a press conference with foreign correspondents.

Tourism is helping to reduce the state's 12% unemployment rate, adding jobs in hotels, restaurants and shops, as well as pumping money into its informal economy. For example, baianas dressed in white lace and wearing turbans are making up to $300 a day selling acaraje, a snack made of palm oil, okra and shrimp, under coconut palms on the beaches.

Despite efforts by state officials, Salvador is still little known by foreigners. The stream of tourists is 80% domestic and 20% foreign, mostly from Europe and the Southern Cone. As for U.S. citizens, only 15,000 came to Salvador in 1998. the great majority being revelers during Carnaval and African-Americans interested in its African culture. "To sell to the American market is still a dream," says Gaudenzi, who blames the poor performance on a lack of direct flights from the U.S. to Salvador, the difference in cultures and high advertising costs.

Bursting with beds. Bahia may soon get a boost. Brazil's first self-contained resort, Costa do Sauipe, is scheduled to open next year just 34 miles from Salvador's airport. The development is a joint venture between Banco do Brasil pension fund Previ, which is pumping $200 million into the project, and the state government, which is throwing in another $30 million for infrastructure.

So far, three large hotel groups--Marriott of the U.S., Accord of France and Superclub of Jamaica--have agreed to open four-and five-star hotels on the site. Six theme inns have also signed on. By the time it's completed, the resort will be bursting with a whopping 1,650 rooms.

There will also be plenty of amenities. The 425-acre complex will include an 18-hole golf course, 15 tennis courts, paddle and squash courts, several swimming pools, an equestrian center, a soccer field, 3.7 miles of beaches and a village with restaurants, bars and shops. Officials estimate the resort will create about 2,500 direct jobs and 9,500 indirect jobs.

Because of its location, Costa do Sauipe will compete with Santo Domingo and blockbuster Caribbean resorts such as Jamaica and Cancun.

But Touran Rateb, vice president of marketing for Sauipe Hotels and Resorts, thinks he can offer a cheaper alternative. "Since we all have similar product and quality, we're going to be much more competitive in terms of price," says Rateb, who used to manage the Casa de Campo resort in Santo Domingo.

Rateb thinks the resort will initially attract Brazilian tourists, 100,000 of whom spend about $30 million a year vacationing in the Caribbean. "[The devaluation] will make those Brazilians rethink their budgets, travel in their own country and discover new resorts that can offer the same services and quality--for half the price," he predicts.

As far as attracting more Americans, Rateb says it will be difficult until the airlines start offering direct flights to Salvador. "You might have the most beautiful and exclusive product, but if you are unable to transport your customer to the destination, you're out of business," he laments. If Brazil's foreign tourism boom continues, a direct flight might not be out of the question in the not-so-distant future.