Singaporean construction giant Chip Eng Seng has announced plans to develop its second resort in Maldives.
Chip Eng Seng, through a 70-30 joint venture with Singapore-based Park Hotel Group, acquired the leasehold rights to Kodhipparu island in North Male Atoll in 2006. The resort, then in the final stages of development, was acquired from local construction firm Amin Construction, and opened as Grand Park Kodhipparu Maldives in 2017.
In a regulatory filing, Chip Eng Seng said Monday its wholly-owned subsidiary CES Hotels (Maldives) has entered a joint venture with Tropical Developments, which is also an affiliate of Amin Construction, to acquire a leasehold interest in a lagoon in the Maldives.
The lagoon, located in North Male Atoll, is expected to be developed into a five-star resort, the filing said.
“The company has been keen on extending its footprint in the hospitality sector in the Maldives and has been on the lookout for a viable opportunity to own and develop its second resort,” Chip Eng Seng said.
“The company is of the view that the lagoon, which has a tenure of 50 years commencing from August 9, 2016, presents such opportunity.”
The joint venture, called CES Tropical Maldives, will be 70 per cent owned by CES Hotels, with TDPL holding the remainder, the filing said, adding each party committed to funding USD 7 million and USD 3 million respectively.
Whilst the current leasehold owner of the lagoon is also an affiliate of TDPL and Amin Construction, the consideration would not exceed the cost the current leasehold owner paid to acquire the interest from an unrelated third party, the filing said.
“As the company has maintained a good working relationship with Amin Construction, the company is of the view that a joint venture with Amin Construction (through TDPL) would be a complementary one,” the filing read.
Amin Construction is already developing a resort within the lagoon of Kodhipparu. However, it is unclear if Chip Eng Seng’s joint venture is for the development.
Maldives is set to welcome 20 new resort openings this year.
Eleven new resorts came into operation in 2016, followed by at least 15 new resorts in 2017 and 20 new properties last year.
Over the past few years, dozens of uninhabited islands have been leased to local and foreign resort developers. Several international brands have entered into the market, increasing the number of resorts in operation to more than 140.
Singapore’s Park Hotel Group has opened its first resort in the Maldives, whilst major international hotel chains such as AccorHotels have entered the Maldives with five openings, including Mercure Maldives Kooddoo Resort, Fairmont Maldives Sirru Fen Fushi, Mӧvenpick Resort Kuredhivaru Maldives, Raffles Maldives Meradhoo Resort, and Pullman Maldives Maamutaa Resort. Brands like Hard Rock International, Capella Hotel Group, Carlson Rezidor Hotel Group, Emaar Hospitality Group, Baglioni Hotels, Emerald Collection and Meliá Hotels International have announced their entry to the Maldives as well.
Existing international players are also upping their presence, with Marriott International launching Westin and JW Marriott in Maldives, Hilton Worldwide re-introducing its top-end luxury brand Waldorf Astoria, Aitken Spence introducing its Heritance brand, Minor Hotel Group to introduce its AVANI brand, Onyx Hospitality Group to introduce its OZO brand with its second property in the island nation, and LUX* Hotels and Resorts opening its second resort in the Maldives. The Residence by Cenizaro has also opened its second Maldivian property, whilst Thai hospitality group Centara Hotels & Resorts has announced the development of its fifth resort in Maldives.
Leading local hotel groups, including Atmosphere Hotels and Resorts, Sun Siyam Resorts, and Crown and Champa Resorts, are also on an expansion drive.
Meanwhile, the first integrated tourism developments in the Maldives — Emboodhoo Lagoon project and Rah Falhu Huraa lagoon project — are underway, with the first phase of the Crossroads Maldives integrated destination at Emboodhoo Lagoon already open to visitors.
Along with the new resort openings come the challenge of increasing demand from budget travellers who choose guesthouses over luxury resorts that the Maldives is known for. The guesthouse sector has rapidly expanded with over 500 guesthouses in operation today.
The previous government had announced new steps to maintain a structured growth in tourism, including a slowdown in leasing islands for resort development and increased marketing efforts in key markets such as China and the Middle East in order to reach an ambitious target of a record 1.5 million tourist arrivals this year.
Meanwhile, the new government has pledged to ramp up tourism promotion.
Reflecting the new government’s pledge, the state budget for 2019 includes MVR 104,200,000 (USD 6.7 million) for tourism promotion, up from MVR 34,733,333 (USD 2.2 million) this year and the previous year.