Hotel Destinations Indian Ocean

Hotels & Hospitality Group | February 2016

Welcome to the latest edition of our Hotel Destinations Indian Ocean.

As you browse through this edition, you will find a selection of notable hotel trends, recent transactions, upcoming new projects and a summary of key market statistics for Maldives, Mauritius, Seychelles and Sri Lanka.

We hope you enjoy our latest update.

Scott HetheringtonChief Executive Officer, AsiaJLL Hotels & Hospitality Group

Sri Lanka

Seychelles

Mauritius

Maldives

Contents

Quick Facts

Contributors10

Destinations

10 Maldives11 Mauritius 12 Seychelles13 Sri Lanka

06

04Map of the Indian Ocean

08

Sri Lanka

Seychelles

Mauritius

Maldives

Indian Ocean

05Hotel Destinations Indian Ocean

HIGHLIGHTS

MaldivesThe Maldives is known for its crystal-clear waters and sandy beaches, establishing itself as the leading destination for luxury vacations while boasting one of the highest concentrations of luxury resorts in the world. The Maldives is a nation of low-lying coral islands scattered across the Indian Ocean, just north of the equator and southwest of the Indian sub-continent. Stretching more than 800 kilometres from north to south and covering a total area of 90,000 square kilometres, the Maldivian Archipelago comprises a total of 1,192 coral islands (of which only about 188 are inhabited) formed around a double chain of 26 atolls.

Tourism Demand Supply OutlookThe Maldives enjoyed growth in

tourist arrivals in 2015, which were up by 2.4% y-o-y to 1.23 million as at December 2015. This was despite a slowdown in Russian demand due to currency depreciation and there

being several travel advisories issued by governments in some the of key

source markets following the recent declaration of an, albeit short lived,

state of emergency in the capital Male. As with previous travel advisories, the

impact on seasoned travellers was minimal as most tourists bypass Male

and transfer directly to the resorts.

Significant growth was seen in several of the top ten source markets to the Maldives over the course of 2015. Arrivals from India grew by 14.9%

y-o-y as at YTD December 2015 with Italy close behind, up by 13.4% y-o-y. Growth was also seen in arrivals from Germany (+6.9%), the United Kingdom

(+4.6%), Switzerland (+1.4%) and Japan (+1.1%). However, arrivals from Russia

were down significantly, falling by 33.2% y-o-y, as well as France (-17%), Korea

(-5.4%) and China (-1.1%) recording falling visitor arrivals.

Three new resorts opened in the Maldives in the second half of 2015,

adding 439 rooms to supply. This included the 271 Canareef Resort

Maldives, which was rebranded from Herathera Island Resort and opened

in October 2015. The other new resorts to open in 2015 were the 116-room

OBLU by Atmosphere and the 52-room Outrigger Konotta Maldives Resort. More recently, the 120-room Amari

Havodda Maldives opened in January 2016. Looking ahead, around 1,000

rooms are due to open in 2016.

The Maldives continues to experience a steep decline in Russian visitation and

this is expected to continue into 2016. However, the continuing popularity of the Maldives as a winter sun and

honeymoon destination for Europeans and strong y-o-y growth from markets such as the Middle East should.help to maintain tourism numbers in the short to medium term. As more new

developments complete, offering greater choice for tourists, increasing competition to remain rate competitive

could keep any growth in ADR moderate as hotels focus on maintaining

occupancy.

There were no hotel transactions in H2 2015 however a number of deals are currently marketing or under offer.

NOTABLE HOTEL DEALS

The Chedi DhapparuMercure Kooddoo ResortSt Regis Vommuli Resort

UPCOMING HOTELS

QUICK FACTS

NEW NOTABLE HOTELS

Amari Havodda Maldives

OBLU by Atmosphere Outrigger Konotta Maldives Resort

Canareef Resort Maldives

rooms120

rooms116

rooms271rooms rooms

52

Note: Maldives Hotels refers to Marketwide HotelsSource: STR Global (YTD Dec 2015), Ministry of Tourism, Arts & Culture, JLLADR - Average daily rate, RevPAR - Revenue per available room

International Visitor Arrivals (YTD Dec 2015)

Number ofNew Rooms 2015

RevPARADROccupancy596 rooms USD 463USD72563.9%1.23 million

Four Seasons Mauritius (50%) – USD 40 million

NOTABLE HOTEL DEALS

Limited supply growth in the short term

UPCOMING HOTELS

06 Hotel Destinations Indian Ocean

MauritiusThe Volcanic islands of Mauritius, famed for its sapphire waters, powder-white beaches and luxury resorts, has one of the most mature hospitality sectors and complete tourism offerings in the Indian Ocean, with its beach offering, cultural interest, wide range of land and water based activities and world class golf courses. During recent years Mauritius has broadened its appeal from a focus on luxury to a more diverse and accessible offering. New international brands have entered the market during the past decade, yet the local brands continue to be the dominant players.

HIGHLIGHTS

Tourism Demand Supply OutlookMauritius had a strong year for tourism with a 10.8% growth in arrivals. France

is the leading inbound market at 254,362 tourists visiting Mauritius in

2015, representing nearly a quarter of all arrivals, followed by Reunion an adjacent French island with 143,834

tourists. Europe is the principal source of tourists making up 55% of the market,

an increase of 10.7% compared to 2014. Tourism from Asia has been the

strongest growth market with air access improving significantly recently.

Mauritius is a tour operator driven market which caters to those leisure

tourists looking for beach holidays with an opportunity for some exposure to the local culture and broad range of

activities. In recent years the tourism offering has diversified and, in addition

to the strong luxury following, the country now has a strong midmarket

segment as well. Leisure tourism dominates at 93% and business tourism

is focused on the financial services sector in Port Louis. Mauritius competes with the likes of the Maldives, Sri Lanka

and the Seychelles for the tropical tourist market, yet also with the higher

volume long haul markets in South East Asia due to its larger resorts and

cultural offering.

There are 101 large hotels in Mauritius with 13,650 rooms. The Luxury segment

represents 10% of supply, Upper Upscale 37%, Upscale 30% and Midscale and

below 12%. The largest supply node is the North of Mauritius around Gand Baie followed by the East and West. Between 2005 and 2014 supply grew at 6% which resulted in an oversupplied market with many news brands entering the market. Global brands represent 25% of supply

in Mauritius whilst the main local brands represent 33% of supply.

Mauritius is moving towards a more open air access policy and this has resulted in improved global reach.

The improved air access and unrest in other resort destinations will continue to support tourism growth in Mauritius. Occupancy growth was strong in 2015

at 15% and it is expected that growth in room rates will follow. Supply growth is restricted due to a moratorium on new

supply which creates for an advantages trading outlook.

Note: Mauritius Hotels refers to the marketwide hotelsSource: Ministry of Tourism and External Communications (YTD Dec 2015), STR Global (YTD Dec 2015), JLLADR - Average daily rate, RevPAR - Revenue per available room

QUICK FACTS

International Visitor Arrivals (YTD Dec 2015)

Number ofNew Rooms 2015

RevPAROccupancy ADR

72.9%1.2 million 467 rooms USD 172 USD 126

NEW NOTABLE HOTELS

Ravenala Attitude Shangri-La Le Touessrok Resort & Spa(Refurbishment & Rebrand)

Mystik Life Style HotelRui Hotels: Le Morne Creole and Coral

rooms272

rooms200

rooms530rooms rooms

35

There were no hotel transactions in H2 2015 however a number of deals are currently marketing or under offer.

NOTABLE HOTEL DEALS

Nouvelle Vallée Resort & SpaCarana Beach Hotel

UPCOMING HOTELS

07Hotel Destinations Asia Pacific

The granite islands of the Seychelles archipelago cluster around the main island of Mahé, home to the country’s international airport and its capital, Victoria. Measuring 28 kilometres long by eight kilometres wide, the island is home to almost 90% of the Seychelles’ total population, reflecting the country’s diverse ethnicity and descent from African, Indian, Chinese, and European populations. Together, the islands of Mahé, Praslin and La Digue form the cultural and economic hub of the nation and contain the majority of Seychelles’ tourism facilities as well as its most stunning beaches.

Seychelles

HIGHLIGHTS

Tourism Demand Supply OutlookInternational arrivals to the Seychelles grew from 128,000 in 2006 to 276,000 in

2015 representing a compounded annual growth rate of 7.9% across the 10-year

period. Tourist arrivals have enjoyed significant growth in 2015, increasing by 18.7% y-o-y as at YTD December 2015 as a result of improving air access and more

direct flights.

In 2015, France overtook Germany as the top source market for the

Seychelles, up by 15.3% y-o-y and accounting for 13.5% of all arrivals to

the island. Significant growth has been seen in arrivals from other top source markets, most notably from the United

Arab Emirates (+53%), the USA (+33.2%), the United Kingdom (+32.2%) and

Switzerland (+17.2%). Growth was seen across all the top ten source markets

with the exception of Russia, which saw visitor arrivals fall by 17.4% y-o-y as

well as a marginal 0.1% drop in visitor arrivals from Germany.

According to the Seychelles Tourism Board, there were 30 large hotels (more than 25 rooms) with 9,082 beds available in 2014. The main concentration of hotel

rooms in the Seychelles is on Mahé and Praslin islands. In September 2015, the 47-room Six Senses Zil Pasyon was

the first resort in the Seychelles to open under the Six Senses brand. The

resort comprises 28 one-bedroom villas, two two-bedroom villas and 17 private

residences all with private pools.

With a small future supply pipeline compared to markets such as the

Maldives, any increase in demand is likely to have a major impact on trading

performance by allowing resorts to upsell and yield more effectively during peak periods and keeping occupancy

stable during low periods. Infrastructure developments and an increase in the

number of weekly flights between Abu Dhabi and Mahe as well as more code share agreements between Air Seychelles and several major airlines

will help support further growth in tourist arrivals.

Note: Seychelles Hotels refers to Luxury and Upper Upscale HotelsSource: Seychelles Tourism Board, JLLADR - Average daily rate, RevPAR - Revenue per available room* Based on JLL estimates

93 rooms USD 350USD 50070%276,233International Visitor

Arrivals (YTD Dec 2015) Number of

New Rooms 2015RevPAR*ADR*Occupancy*

NEW NOTABLE HOTELS

QUICK FACTS

H Resort Beau Vallon Six Senses Zil Pasyon The Oasis Hotel & Restaurant

AVANI Seychelles

rooms100

rooms47

rooms124rooms rooms

30

There were no hotel transactions in H2 2015 however a number of deals are currently marketing or under offer.

NOTABLE HOTEL DEALS

UPCOMING HOTELS

08 Hotel Destinations Indian Ocean

Located south of the Indian subcontinent and just above the Equator amid the pleasant waters of the Indian Ocean, Sri Lanka, a nation island is a place where nature’s beauty remains abundant and unspoilt. Sri Lanka is now in the midst of a promising period of rapid economic growth and social development, driven largely by investments into infrastructure across the country as well as continued growth in the services sector, which now contributes 58% of the country’s GDP. In a remarkably short period, the country has bounced back as a strong contender among tourist destinations in the Indian Ocean, and is on a steady tourism growth path.

Sri Lanka

HIGHLIGHTS

Tourism Demand Supply OutlookSri Lanka has a unique tourism

proposition. Growth prospects for the country’s tourism sector remain encouraging, with the Government

of Sri Lanka now targeting 2.2 million tourist arrivals in 2016. Tourist arrivals to Sri Lanka continued to demonstrate

strong growth, recording 1.8 million tourist arrivals in 2015, up by 17.8% over

the previous year.

There has been a gradual shift in the source markets for the country’s tourism sector, with arrivals from the

traditional source markets of Western Europe declining as a percentage of total arrivals while Asian countries have increased, their market share led by China and India. Sri Lanka’s

main source markets, India and China recorded growth of 30% and 68%

respectively in 2015, with China now overtaking the United Kingdom to

become the second largest source market for Sri Lanka.

According to the Sri Lanka Tourism Development Authority (SLTDA),

Sri Lanka had approximately 28,000 rooms in 2014, of which over 60% fall in the informal segment consisting of supplementary establishments and

unclassified hotel inventory. The total room inventory across the country increased by 1,850 rooms in 2014. The hotel environment has grown increasingly competitive with an

increase in hotel room supply as several new domestic and international players establish their presence in the country.

The government’s focus on improving tourism infrastructure in the northern

and eastern regions of the country as well as other emerging tourism

zones have also begun to take shape. Colombo is the commercial centre of the country and the focus is largely

on driving investment and commercial development, as well as enhancing

recreational and entertainment options. Hotels of various categories are

being developed all over the country, including within some large mixed-use developments in the capital Colombo.

Note: Sri Lanka Hotels refers to Marketwide HotelsSource: Sri Lankan Tourism Development Authority (SLTDA), JLLADR - Average daily rate, RevPAR - Revenue per available room * Based on JLL estimates

Shangri-La Hambantota Resort & SpaSheraton ColomboAnantara Kalutara Resort & SpaMarriott Weligama Resort & Spa

70%Occupancy*International Visitor

Arrivals (YTD Dec 2015)

1.8 millionNumber of

New Rooms 2014

1,850 roomsRevPAR*

USD 91USD 130ADR*

Anantara Tangalle Resort & Spa

rooms152rooms

The Steuart by Citrus

rooms50

Cape Weligama

rooms39

Uga Escapes Colombo

rooms11

NEW NOTABLE HOTELS

QUICK FACTS

09Hotel Destinations Indian Ocean

Quick FactsNUMBER OF

NEW ROOMS 2015 OCCUPANCYREVENUE PER AVAILABLE

ROOM (REVPAR)INTERNATIONAL VISITOR

ARRIVALS 2015

Maldives 596 63.9% USD 4631.2 million USD 725

AVERAGE DAILY RATE (ADR)

Mauritius 467 72.9% USD 1261.1 million USD 173

Seychelles 93 70.0% USD 350 276,233 USD 500

Sri Lanka 1,850 (2014)

70.0% USD 911.8 million USD 130

10 Hotel Destinations Indian Ocean

Contributors

Frank SorgiovanniHead of Research Asia Pacificfrank.sorgiovanni@ap.jll.com

Scott HetheringtonChief Executive Officer, Asiascott.hetherington@ap.jll.com

Nihat Ercan Executive Vice PresidentInvestment Sales, Asianihat.ercan@ap.jll.com

Xander Nijnens Senior Vice PresidentSub-Saharan Africaxander.nijnens@eu.jll.com

Claire Gent Senior AssociateStrategic Advisory, Asiaclaire.gent@ap.jll.com

About JLL Hotels & Hospitality Group

JLL’s Hotels & Hospitality Group has completed more transactions than any other hotels and hospitality real estate advisor over the last five years, totalling more than $68 billion worldwide. Between negotiating the world’s most extraordinary, enticing, and profitable property deals, the group’s 350-strong global team also closed more than 4,400 advisory, valuation and asset management assignments. Investors worldwide turn to JLL to shape their strategies, tailor their portfolios and maximize the value of their assets. We are recognized as the global leader in real estate services across hospitality properties of all shapes and sizes. Our expert advice is backed by industry-leading research.We apply our broad spectrum of hotel valuation, brokerage, asset management and consultancy services through every phase of the hotel lifecycle. We have helped more hotel investors, owners and operators achieve high returns on their assets than any other real estate advisor in the world. Whether you are looking for a hotel or you’re ready to sell, we’ll use our capital markets expertise, hospitality industry knowledge and global relationships to put the right parties together and execute a bespoke deal that exceeds your objectives.

To find out more, talk to JLL.

www.jll.com/hospitality

JLL’s Hotels & Hospitality Group offices

www.jll.com/hospitality

Jones Lang LaSalle Property Consultants Pte Ltd | CEA Licence No. L3007326E

© 2016 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.

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