Thai hotel groups flock to Maldives as tourism booms

The Maldives’ booming tourism sector is attracting significant investment from Thai hotel chains, drawn by the luxury market’s growth potential and lucrative room rates. Several major players are expanding their presence in the island nation, with Centara leading the charge.

The Chirathivat family-owned Centara has recently opened two new resorts: the 145-room Centara Mirage Lagoon Maldives and the 142-room Centara Grand Lagoon Maldives, bringing their total Maldivian portfolio to four properties.

Other prominent Thai groups with a presence include Minor International (9 hotels), Singha Estate (3), Dusit Thani (2), and Onyx Hospitality Group (1).

Centara’s Andrew Jansson said the combined investment of approximately US$200 million (6.8 billion baht) in the two properties encompassed long-term island leases, land reclamation, and construction.

The two properties, located in North Male Atoll, target distinct market segments. The Centara Mirage Lagoon Maldives focuses on families, while the Centara Grand Lagoon Maldives caters to honeymooners and families with older children.

“The Centara Mirage Lagoon Maldives is a dedicated family hotel,” Jansson explained. “Every aspect is designed with families in mind.”

In its first three months of operation, the hotel achieved a 60% occupancy rate, with guests primarily from China, Russia, Thailand, the UK and India. Centara aims for 75-80% occupancy in the first year.

Addressing the evolving tourist demographics in the Maldives, Jansson said:“Over 60% of visitors are honeymooners, and 30% are families. This is a shift from a decade ago when couples dominated the market. We’re also seeing increasing numbers of tour groups from Thailand, Singapore, and India, drawn by convenient four-hour flights.”

The Maldivian hotel market has grown rapidly, from 130 hotels five years ago to 178 currently, with another 30 expected to open within the next three years.

This expansion is supported by infrastructure development, including the recent expansion of Velana International Airport, which by July will have a capacity of 7 million passengers annually.

The Maldives' unique geography, with over 1,100 islands, presents both opportunities and challenges. While many islands are uninhabited and available for development via long-term leases, investors often need to reclaim land to create suitable sites. This allows for bespoke designs but adds to costs.

Jansson acknowledged the increasing competition from other destinations, such as Turkey, Seychelles and Saudi Arabia, as well as established Asian beach destinations like Bali and Phuket.

While room rates in the Maldives remain strong, with potential for 5-10% increases, occupancy rates are under pressure due to increased supply. The emergence of hotels on local islands, offering lower prices than resort islands, also provides more choice for tourists.

“The Maldives is moving beyond its exclusive high-end image,” Jansson commented. “To boost tourism revenue, it’s focusing on attracting a broader range of visitors, including families.”

Dilip Rajakarier, Group CEO of Minor International, highlighted the Maldives as a key market for his company. With nine hotels already operating under various models, including ownership, joint ventures and management agreements, Minor plans to focus on expanding its management portfolio in the Maldives.

“The Maldives is a high-potential destination," Rajakarier said. “We’ve seen double-digit RevPAR (revenue per available room) growth in recent quarters.”