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Golden Times for Resort Development

Golden Times for Resort Development

1 August, 2014

As tourist arrivals continue to increase significantly, international hotel chains are expanding in the Cape Verdean market. Cityscape takes a look at what the archipelago has to offer.

Cape Verde, an island country spanning an archipelago of 10 volcanic islands off the coast of West Africa, has seen tourism numbers more than doubled since 2000, spurring a wave of beach resort property development.

Figures from the World Travel and Tourism Council (WTTC) show that travel and tourism directly contributed 16.2% of Cape Verde’s total GDP in 2013 and this is expected to rise to 20% of total GDP by 2024.

Travel & Tourism also generated 32,000 jobs directly in 2013 (14.5% of total employment) and this is forecast to grow by 7.0% in 2014 to 34,000 (14.9% of total employment), says the WTTC in its 2014 ‘Travel & Tourism Economic Impact Cape Verde’ report.

Tourist destination deluxe

Given the islands’ warm year-round climate, stunning landscapes and cultural wealth, these promising figures are not surprising. Due to its relative geographical proximity to Europe (approximately 5 hour flight time), Cape Verde proves particularly attractive to travellers from the UK, Germany and Scandinavia, amongst other European countries.

The islands cover a combined area of slightly over 4,000 square kilometres and offer an incredibly diverse landscape. The green Santo Antão, the archipelago’s second largest island, is ruptured with canyons, gorges and valleys, and offers some of the most amazing hiking in West Africa.

Mount Fogo, Cape Verde’s highest peak (2,829m/9,382ft), is still an active volcano that last erupted in 1995. The volcano’s cone remains intact and can be climbed in a three to four hour hike.

The island of Boa Vista is famous for its desert-like interior and strong winds which attract watersport fans from all over the world. Cape Verde’s most popular island for wind- and kitesurfing however is Sal, which gets more tourists than any other island. Sal’s largest town is Espargos, right next to the international airport.

Mindelo, a port city in the northern part of the island of São Vicente, has long been the country’s cultural centre, known for its colourful and animated carnival celebrations, with roots in Portuguese traditions and some Brazilian characteristics. The island is also marked by cobblestone streets, colourful colonial buildings, a yacht harbor and industrial port.

Santiago, the largest member of the archipelago and the first to be settled, has a little bit of all the other islands. It has sandy beaches, desert plains, verdant valleys and a mountainous interior as well as the capital, Praia.

Improving infrastructure

Cape Verde boasts a strategic location at the crossroads of mid-Atlantic air and sea lanes, which has been enhanced by significant improvements at Mindelo’s harbour (Porto Grande) and at Sal’s and Praia’s international airports. A new international airport was opened in Boa Vista in December 2007, and on the island of Sao Vicente, the newest international airport (São Pedro Airport) in Cape Verde, was opened in late 2009.
The major ports are Mindelo and Praia, but all other islands have smaller port facilities. In addition to the international airport on Sal, airports have been built on all of the inhabited islands; all but the airports on Brava and Santo Antão enjoy scheduled air service.

Investor attraction

Global hotel chains seem to have realised Cape Verde’s potential with regards to its developing tourism sector and are establishing themselves in the market. One of them is the Spanish Melia Hotels International, who currently have one hotel successfully operating, a further resort due to open this November and two more in the pipeline for the near future.

Cecílio Gutiérrez, Vice President Mediterranean Region, Melia Hotels International, says backed by positive economic growth, governemnt efforts to ameliorate Cape Verde’s investment climate are bearing fruits.

“The economy of Cape Verde has developed significantly and its annual growth has increased yearly over the past decade. Since early 1990, economic reforms have been launched aimed at developing the private sector and attracting foreign investments, with the government taking the role of promoter and regulator of economic activities. These activities are orientated towards tourism, hotel promotion and real estate and construction,” Cecílio Gutiérrez commented.

In addition to Melia Hotels, international hotel chain Hilton is also keen to capitalise on Cape Verde’s growing tourism market, having recently laid the first stone on their €46 million (US$63 million), 240 room hotel on the island of Sal, the first of the luxury chain in Cape Verde.

FDI crucial to local economy

Foreign investment is crucial to Cape Verde’s economy.

According to reports from the World Bank, the country has been significantly affected by the global economic crisis due to its heavy reliance on foreign investment, and its economy’s vulnerability to external shocks. In response, the government of Cape Verde (GoCV) developed a strategy to strengthen its operational transparency and accountability to make the country more attractive to international investors.

“As part of this strategy, GoCV has been developing a government-wide monitoring and evaluation system since 2009 to track progress on economic and social indicators. These efforts have shown promising results, and, although the system is still evolving and has challenges to overcome, it represents a significant achievement for a country of Cape Verde’s size and income level,” the World Bank reports.

Cecílio Gutiérrez of Melia Hotels International says economic reforms have indeed attracted foreign investors over the past decade. Additionally, “the favourable climate, political stability and short flight distance from the main European cities have a positive effect on investment flow,” he adds.

In 2007, Cape Verde joined the World Trade Organization (WTO) and in 2008 the country graduated from Least Developed Country (LDC) to Middle Income Country (MIC) status.

Bright prospects for tourism sector

Melia Tortuga Beach is Melia Hotels’ first property in Cape Verde and the hotel’s performance since its opening is an indicator for the fact that there is a lot more to come for the archipelago’s tourism resort market.

“Since its opening in May 2011, the figures have been positively increasing and the product is now consolidated as well as the brand Melia Hotels International in Cape Verde. Apart from the positive financial results, the Melia Tortuga has been recognised for its service and quality and awarded several international prizes such as World Travel Award, Tripadvisor and Holidaycheck awards,” Cecílio Gutiérrez comments.

Melia’s second resort, Melia Dunas, is due to open its doors in November this year and a third property, Melia Llana, is already under construction. A new project called Melia White Sands is also planned on the island of Boa Vista, scheduled to open in 2016, Gutiérrez says.
“Following the opening of new resorts in both islands, Sal and Boa Vista, we foresee an increase in the demand coming from major European markets, but also from emerging markets like Eastern Europe and Russia, boosting the flight capacities flying to Cape Verde,” Gutiérrez concludes.