City Hotels: are they here to stay?

13 mins read

Let’s take a look at this segment of the country’s tourism industry that has seen slow growth for the past few years. The first city hotel in the Maldives was Nasandhura Palace Hotel, opened in 1981. In the decades that followed, a small number of hotels have risen up in the city. Tourist arrivals have increased by nineteen per cent compared to the same period last year, reaching 862,589.

Compared to the hike in the number of resorts and guest houses in the country, the growth in city hotels has been quite slow. To find out why, we talked to some industry experts and a number of GMs who manage some of the top city hotels in the greater Male’ area.

The Maldives tourism industry is renowned for its unique ‘one island-one resort’ model. Ultra-luxury resorts that cater to honeymooners and discerning holiday-makers made the country an exclusive destination favoured by the rich and famous.

Less well known are the city hotels of the Maldives. While the typical visitor has more than 130 resorts to pick from, the choice of hotel is limited to a dozen. In the recent past, guesthouses and inns that offer more affordable rates for budget travellers and backpackers have proliferated, opening up local islands to tourists.

A different clientele

City hotels, however, cater to a different clientele. They serve an important function in the hospitality landscape as a second home to business travellers and diplomats who, on a given month, sleep in a different city every week. More than just a bed to rest after a long day, these travellers seek peace and quiet, great food, maybe a massage or a dip in the pool. Having a nice view is a bonus. Others are transit passengers who look for a comfortable place to rest before they reach their final destination.

Most city hotels are located in Male’ city and the greater Male’ area. The most prominent one, Hotel Jen, up until recently, was the tallest building in the city. A Shangri La property, the hotel boasts occupancy that remains consistent throughout the year.

Its success can be attributed to a number of factors. Hotel Jen is a preferred hotel for diplomats and business travellers for its high security and its close proximity to government offices. In addition, its ballroom and customisable meeting rooms of different sizes are important factors. Another is its many dining options and its views. There’s also a wonderful spa, gym and a rooftop pool. Jen’s rooftop restaurant Azure is also popular with locals for lunch or coffee meetings and romantic dinners. To top it all off, there is free transportation and great service, important factors to consider when you are strapped for time.

Successfully running since 2013, another hotel who cater to a large number of repeaters, most of them business travellers, is Somerset Hotel. Although located in a heavy-traffic area in the city, the hotel offers quiet comfort and warm hospitality. Somerset attributes its success to personalised service, and offering value for money.

Hulhule’ Island Hotel (HIH) is also one of the top city hotels in the country. It is the only city hotel in the Maldives that serves alcohol. The hotel offers great ocean views, a pool, spa and gym. Guests can also play mini golf. And the hotel is in a secluded location, surrounded by a nice lawn and a garden. Located near the airport, for the past eighteen years, it was promoted as a transit hotel. However, with changing traveller trends, the hotel is going through a renewal to tap into new market segments, such as the clients who travel for meetings, incentives, conferencing and events, i.e. the MICE market.

According to group general manager Steve Ng, (and we agree) this is an important segment for city hotels. As these travellers won’t be taking the long trip to resorts that are located hours away from Male’, city hotels need to focus more on this segment. And there is growing demand. According to Steve, HIH’s meeting hall is always booked throughout the year.

“The Indian market is also growing now. When Indians do events, they go all out. Even for weddings, they book the entire hotel. When I was working in Thailand, they booked the entire hotel and the hotel was closed for three days for this event,” said Steve.

Changing markets

China still retains its spot as the top market, with 140,265 tourist arrivals by the end of June this year, according to the tourism ministry’s latest statistics. The Chinese market holds 16.3 per cent of the market share, with a ten percent increase in arrivals compared to the same period last year.

second largest market, with a 100 percent growth from the same period in 2018. Indian holiday makers hold a market share of ten per cent. The market has seen steady growth, which some attribute to the increasing popularity of the Maldives as a holiday destination among Indian celebrities.

The Maldives Marketing and Public Relations Corporation has also been promoting the country with roadshows themed ‘Journey to the Sunny Side’ in major cities in India.

The other top markets have also seen significant growth compared to the first half of last year. The Italian market has recorded 34 percent growth, with 8.7 percent of the market share followed by Germany (+19.7%), the UK (+12.6%) , Russia (+11.9%), France (23.1%), USA (+34.5%) Japan (+17.9%) and Australia (+14.3%).

Tourist arrivals have increased by nineteen per cent compared to the same period last year, reaching 862,589.

Maldives used to be a destination for the wealthy, but that has changed now. It is now accessible to anyone who can afford to buy a plane ticket. There are many accommodation types to choose from. As of June, there were 146 resorts in operation, 554 guest houses, 153 safari boats and twelve city hotels.

Tourist arrivals reached a record 1.4 million in 2018. The government is aiming for 1.5 million visitors this year, and with the expansion of the airport, we can expect to see a significant boost in visitors in the future.

The common denominators

The most successful city hotels have a few things in common; comfort, delicious food, and great service. They go out of their way to make guests feel at home and special, even if it’s a transit guest who arrive late at night and leave the next morning. And repeaters enjoy special treatment, like complimentary room upgrades and discounts. They also offer special packages to business travellers. Some offer excursions and city tours to ensure that even business travellers get to enjoy the same experiences that holiday makers enjoy at island resorts, minus the villas on the beach. And they all agree that providing excellent service is the most important factor.

“In order to be a successful hotel, you need to provide excellent service. That’s the most important thing. It’s part of every human being; you need to be taken care of, you need some good food. If you are unable to provide these things, you won’t succeed as a hotel,” said Fareesha Hawwa, the area general manager for the INTAL Hotels, who oversees three of its properties in the city.

Resorts vs city hotels

In contrast to island resorts, whose biggest challenge is the logistics of getting supplies from Male’ and dealing with transfers during bad weather, operating a city hotel presents its own unique challenges. While island resorts only have airport pick up and drop off, city hotels cater to guests travelling to and coming from different destinations. While one guest might go to the ferry terminal, another might need transfer to the airport or the jetty. And so, arranging transportation with a limited number of vehicles can be challenging.

For city hotels, the average stay is one to three nights. Due to the large number of guests who arrive and depart on a given day, housekeeping can be the busiest department at a city hotel.

“The rooms, even if slept for one night have to be cleaned and made ready for the next guest. This requires efficient staff who are able to work long hours, sometimes without a break,” said Fareesha.

One common complaint among city hotel managers is the high turnover of staff, especially locals. In contrast to resorts, who offer high service charge and benefits such as free accommodation and food, city hotels are comparatively smaller in operation. Finding dedicated and hardworking local staff is a challenge that all city hotels face.

However, in contrast to island resorts that suffer during low season, affected by changing markets and competing with new resorts, most city hotels boast unchanged occupancy throughout the year. Demand always exceeds supply when it comes to this group of travellers. So why are there so few city hotels in the Maldives? Maybe because there aren’t many cities in the country. Space might be another factor. This might change in the future though.

The future

Male’, now connected to its island suburb Hulhumale’ by a bridge, is set to expand further to the east. A larger metropolis will need establishments commensurate to its size.

With the ongoing expansion of Velana International Airport, the country is poised to welcome 14 million guests per year. With this significant increase in arrivals, we can expect to see more city hotels mushrooming in the greater Male’ area. As the number of hotels increase, prices are likely to drop, which means that more people can afford to travel. Even the locals are travelling more now, choosing to spend a weekend at a hotel in Hulhumale’ or booking a hotel for parties and other events. The global tourism industry is growing fast. Social media also plays a large role in promoting destinations and setting trends. Younger generations are interested in getting out and exploring more. So, the future of city hotels is hardly bleak after all.