International visitors and tourism investment are flowing into Cabo Verde. For both visitors and investors, this tiny country, 500 kms off the coast of Senegal, is a destination that is attracting well-earned attention. In earlier articles, the steady influxes of international visitors (See [add link]) and the incentives attracting investors (See [add link]) were covered. As demand for Cabo Verde’s attractive resorts grew, investors sought out opportunities and Government incentives have helped smooth the path forward. It is not completely smooth sailing, there are still a few kinks to work out such as taxation, but as we pointed out in a detailed White Paper on Tourism Investment in Cabo Verde ([add link]), there are more positives than negatives. So, not surprisingly, investors and international hotel brands are discovering Cabo Verde.
Cabo Verde has been experiencing a boom in hotel construction. From 2010 to 2014, the number of rooms increased by 84% from 5891 to 10,839 with the number of beds increasing by nearly 60% from 11,397 to 18,188. Most of the growth occurred in hotels and pensions with the number of the former increasing from 41 to 54 and the latter from 61 to 70. The number of hotel apartment establishments increased from 12 to 21.
The only international brands currently operating in Cabo Verde are Spain-based Riu Hotels & Resorts, Melia Hotels, Iberostar, and Portugal-based Pestana Hotels. These hotels account for nearly half of all rooms in Cabo Verde. This is set to change over the next one to two years with the opening of two Hilton hotels.
Four new hotels are expected to increase the overall room supply by more than 15% and the four and five star supply by 33%. Three will open on Sal Island and one in Praia by late 2016:
The Hilton Sal, The Hilton Praia, The Melia Llana Beach Hotel and the Royal Decameron Sal Beach Hotel comprising a total of 1658 rooms.
- The Hilton Sal will have 240 rooms, 23 suites, 1 presidential suite, a spa, three restaurants, and a business center, as well as the country’s first casino. It is reportedly costing more than $58 MN to build and is financed by Ecobank, Banco Comercial do Atlântico (BCA), the Banco Interatlântico (BI), the Banco Espírito Santo-Cape Verde (BES-CV), and Caixa Económica
- The Hilton Praia will have 200 rooms.
- The Melia Llana Beach Hotel will have about 600 suites, seven pools, discos, a Sports bar, mini club for children, four restaurants, gym, cyber cafe, pavilion wedding, meeting rooms, water sports, theater room, among other equipment.
- The Royal Decameron Sal Beach Club Hotel development includes two resorts, one four and one five-star with a total of 594 rooms. The four-star hotel will have 312 rooms and the five-star 282 rooms with bars, beach restaurants and thematic areas of promotion events, pool, spa, gym, recreation areas and a nautical club, game rooms and an amphitheater.
In addition to these new hotels, an even larger development is launching. In July 2015, the Macau Legend Development (MLD) company reached an agreement with the Government of Cabo Verde to develop a world-class integrated leisure, tourism and entertainment complex on Santiago Island. By 2018, this complex is expected to open and include an exclusive 15 year gaming concession for Santiago Island and an exclusive nationwide 10 year concession on the operation of online gaming, physical and online sports betting.
For Cabo Verde, this will represent one of the most substantial single investments in its history. MLD will invest at least EUR250 MN (US$287 MN) to construct an integrated complex that includes hotels, casino, office buildings, retail, dining, a convention center, museum, a clubhouse and marina.
The MLD investment is sparking the interest of other investors interested in gaming and casino projects, who are being attracted by the availability of gambling zone land and licenses. Some of the most attractive opportunities are being facilitated by the Boa Vista and Maio Islands Tourism Development Corporation – “Sociedade de Desenvolvimento Turístico das Ilhas da Boa Vista e Maio, SA” (SDTIBM).
The most popular islands for visitors and investors have been Sal and Boa Vista, although interest has also been growing in Maio. As development progresses on Maio, which has a third of the country’s beaches, it is expected to help diversify Cabo Verde tourism by offering opportunities for diving, nature tourism, ecotourism and adventure, cultural tourism, and sport fishing. Maio is a three hour slow boat ride from Praia.
Boa Vista, which has more than half of the country’s white sandy beaches, has also been attracting substantial investment and expects to double the number of rooms by 2020:
- Meliá Hotels is opening their first resort in Boa Vista with 850 rooms under construction as of early 2016.
- Expansions are expected in 2016-17 of the Riu and Decameron properties.
- Boa Vista will also have its first resort with an 18-hole golf course in 2018-2019.
Investors are responding to increased demand and interest among visitors. And as they continue to expand the country’s room supply and resort offerings, Cabo Verde is expected to generate even more investor interest.
- Scott Wayne, Tourism Investment Advisor to Questex
Boa Vista and Maio Islands Tourism Development Corporation – “Sociedade de Desenvolvimento Turístico das Ilhas da Boa Vista e Maio, SA” (SDTIBM) – is a limited liability company jointly owned by the State of Cabo Verde and the Municipalities of Boa Vista and Maio. SDTIBM manages and promotes private sector investment and sustainable tourism development in six tourism development zones (ZTE) on these islands. All ZTE land planning has been completed – an advantage for investors. SDTIBM sells land in stunning waterfront locations in the ZTE’s that is well served by local road and utilities networks. Over 90% of the ZTE land remains available for development with Maio almost completely undeveloped.