The Maldives set to receive record investment for 2019
With tourism in Japan booming and the 2020 Olympic Games on the horizon, investors have been taking a closer look at the country’s hotels.
The Maldives is proving popular with more than just tourists as hotel investment in the Indian Ocean destination is set to hit record highs in 2019.
It is estimated that more than US$450 million worth resort transactions have already been completed or underway according to data from JLL.
Traditionally dominated by Asian investors, the Maldives is now attracting new sources of cross-border capital from Europe and the United States. In the past six months, investments from these new sources of capital represent US$300 million, compared to the annual average deal volume of US$120 million per year.
The tightening of yields in core markets across the globe, particularly in Europe, means demand is set to remain high as investors look further afield in search of higher yielding opportunities, says Nihat Ercan, Head of Investment Sales, Asia, JLL Hotels & Hospitality Group.
“Our clients outside of Asia are starting to show increasing interest in the Maldives, given its reputation as a sought-after tourist destination.”
Catering to the travel boom
The Maldives is in the midst of a tourism boom. Arrivals in the first quarter of 2019 grew by 15 percent year on year, reaching a 15-year high in April 2019 with 190,713 tourists visiting, compared to 163,000 the year before, according to the Ministry of Tourism.
Arrivals from Europe rose by nine percent in January alone. Tourists from Italy, Germany and United Kingdom made up 26.2 percent of total arrivals in Q1 while travellers from the United States grew by 44 percent compared to last year.
European chains are opening to cater to the growing European market. Luxury Italian resort chai, Baglioni, will open its first property outside of Europe in June while the Movenpick brand from Accor group welcomed guests to its first hotel in the Maldives last November.
Investors have followed closely.
Last month, German-based Seaside Hotels & Resorts acquired Finolhu Maldives, a resort in Baa Atoll, for approximately US$90 million while Conrad Maldives Rangali Island resort, part of Hilton Worldwide Holdings, was sold to American investment firm Blackstone, in February.
“European hoteliers see an opportunity to capitalise on the familiarity of their brands with these travellers and tour operators,” says Charlie MacIldowie, Vice President, JLL Hotels & Hospitality Group.
“We expect more of our European and American clients to enter the Maldives hospitality market in the next 12 months.”