Owners of the Coco Collection resort brand, Sunland Hotels pioneered the tourism industry by establishing one of the first and most successful truly Maldivian resort groups. Director Mohamed Nazeer tells the story from the start and bets on sustainable growth, here’s how.
How did it all start?
We have been there since the very beginning, when the Maldives was just a diving backpacking destination. We started out as a family-owned travel agency in 1976. In the early 90s, we were compelled to change our business structure due to the sheer demand for beds and our need to control our own bookings. We participated in a government bidding for resort islands and we won, so we entered the luxury resort market. Our first resort was Makunudu, which really stood out from the rest in terms of luxury. This was around the time the industry really started to pick up in both quality and returns.
How did the Maldives become one of the most luxurious destinations in the world?
Coco Palm Dhuni Kolhu Water Villa: $1,245
Coco Bodu Hithi Escape Water Villa: $1,815
Coco Residence: $2,123
Water Villa: $1,305
Makunudu Beach Bungalow: $733
Biyadhoo Standard Room: $265
We were the first Maldivian company to create its own brand of luxury resorts with the Coco Collection brand, which competes at the same level with the biggest international luxury brands. When we first launched our resorts, the market gap was considerable. From 1972 to 1992, 80 percent of the resorts cost no more than $100 per night, except for Makunudu and Coco Palm Dhuni Kolhu, our first two resorts, which sold for $300 to $400 per night. Sunland has kept at the forefront of the industry, being the first to offer water bungalows in the Maldives. These were important shifts in the industry and, in a way, we drove the standard of luxury to another level. This resulted in considerable market recognition, with up to 30 percent of our guests as repeat visitors. Today, we operate three resorts under the Coco brand, Coco Privé Kuda Hithi, Coco Palm Dhuni Kolhu and Coco Bodu Hithi, as well as two under the Sunland brand, Makunudu and Biyadhoo.
What do you identify as the main barriers to growth in the market today?
Surely, the shortage of qualified personnel represents a major challenge to every operator in the industry and highlights the need for operators to take care of their people. After all, the Maldives has a small population and high-end tourism implies a much higher ratio of staff per guest than other market segments. Finding motivated and skilled people that we can train has become progressively more difficult as the industry expanded. The country lacks proper education facilities for the hospitality sector. The government now operates a hotel school, but it is hardly enough for the relentless growth in demand around the country. In the past, the issue was so evident that the United Nations helped finance a program for training staff to work in the resorts. Tourism is the country’s biggest economic driver and a very important job creator, so we would all benefit from the industry’s growth. On the other hand, Maldivian developers face other type of challenge. They are pressed to secure enough funding for their developments domestically, as the national banking sector is very immature and cannot offer competitive conditions. Access to credit is limited and not designed for developments of this size. It is also costly, which means that domestic developers have a hard time competing with international companies that source capital abroad.
Tell us a little bit about where Sunland stands today.
Today, Sunland is well established as a leading group in the Maldivian market. We have benefited greatly from the industry’s expansion in recent years and we are now in a stage of consolidation to assure sustainable growth. We have been affected by the issue of lack of human resources, like every other operator in the country. However, our legacy in the market provides some advantages. We have around 700 employees in our company, with a 40 percent to 60 percent ratio between expatriates and locals. Some of our staff has been with us for over two decades, so we have learned to maintain our teams in a sector with a very high rate of personnel turnover. Building loyalty among your staff is the best way to reduce the impact of difficult market conditions. We are streamlining our existing operations, optimizing them to meet the demands of our guests, and building the foundations that will allow us to retain the high-level of service that we want to have.