MADRID — Hotel and travel executives in Europe and Africa see the potential of the Cape Verde Islands to become the region's next tropical destination.
The Republic of Cape Verde or Cabo Verde — an Atlantic Ocean archipelago nation of nine inhabited islands 350 miles west of the African continent and 900 miles south of the Canary Islands — is making several major changes with the goal of broadening the country’s hotel industry to more than just demand from the tour-operating model.
At a breakout session during January’s Atlantic Ocean Hotel Investors’ Summit, Jorge Benchimol Duarte, CEO of Cabo Verde Airports, said a major development has been the creation of an association called Macaronesia.
“The idea is to have a legal entity consisting of four archipelagos — Cabo Verde; Canary Islands; the Azores, and Madeira — and historically a geographical term in use, to market the area … to create awareness. What we realize is that Cabo Verde is not that well-known. Before the advent of mobile phones, I needed to carry a map with me when I talked to people about my home,” he said.
One challenge is that Cape Verde is not part of the European Union and is the only independent nation of the four island groups in the association, Duarte said. However, Cape Verde does have various special arrangements with the EU, and its currency, the escudo, is pegged to the euro.
“There exists less currency risk, especially for institutional investors,” he added.
One hotelier in that Macaronesia group is Madeiran mega-soccer star Cristiano Ronaldo, whose C7 hotel brand has a partnership with Portugal’s Pestana Hotel Group, Duarte said.
Oásis Atlântico Hotels & Resorts owns six hotels in Cape Verde — as well as one in Brazil and one in Morocco — and was one of the first investors in Cape Verde, said the hotel company's CEO, Alexandre Abade. Oásis Atlântico’s first hotel in Cape Verde opened in 1999.
TUI, which has its own airline, previously was the major airline and the major hotel entity in Cape Verde, running almost exclusively all-inclusive package vacations. In October, United Kingdom-based EasyJet debuted its first flights to the archipelago.
“What we see right now is that EasyJet is changing the dynamics. Immediately, you could see there was a lot of growing demand for second-home investment. [Cape Verde] is a tour operating-model destination, but over time it will evolve into something different,” Abade said. “It is nothing compared to the Canary Islands, which is the closest and most comparable destination. We cannot go from 1 million to 40 million [visitors] as we do not have the staff for that, but it can grow to 2 million, 3 million, and I think you will see more direct bookings over time.”
Official full-year visitor numbers to Cape Verde in 2024 haven't been released yet, but Duarte said, “it will be around 1.2, 1.3 million. There is some demand now from Eastern European countries. There is no demand from the U.S. at all.”
Most of the islands' visitors arrive from the U.K., followed by tourists from Germany, The Netherlands and Portugal. Duarte added the number of Spanish visitors to Cape Verde is on the rise.
While TUI's tour groups business to the islands is a crucial part of its hotel and tourism demand, there are moves from hospitality companies to support alternative demand-feeder avenues, Abade said. He added there is room for that change.
“The islands have 90% occupancy on a full-year basis. We really do not see a low season,” he said.
Airlift
Accessibility to Cape Verde is improving as more international airlines add the islands to their available routes. This increase in airlift is changing the makeup of Cape Verde, Abade said.
Cabo Verde Airlines is the national carrier, and its majority shareholder is Iceland airline company Icelandair.
Cape Verde has four international islands, each on a different island, with the main airport being on the island of Sal, which makes it the major destination, Duarte said.
“The airports are now managed by Vinci, the French group, one of the largest in the world, and much work is spent on route development,” he said.
Duarte said his job is to work with airlines to create packages attractive enough for them to commit aircraft and airport gates.
“Transavia [a Dutch economy airline] has increased its activities, flying now to four airports, and EasyJet’s arrival has seen [Portuguese national carrier] TAP lower its prices, which in turn has attracted more guests. It also has resulted in EasyJet Holidays entering the scene,” he said, adding that Sal Airport is now 85 years old.
“The airports work with European banks, and we will continue to. We started this before the euro,” Duarte added.
While tourism represents approximately 30% of Cape Verde's gross domestic product, remittances from the country’s large diaspora and airline fees also are major income-generators, Duarte said. Numerous airline routes travel through the archipelago’s airspace — officially named the GVSC Sal Oceanic Flight Information Region — of approximately 490,000 square miles with Sal as its center.
The hotel scene
New hotels are coming to Cape Verde, too, as both local and European banks have provided financing for projects on the archipelago, Abade said.
In late 2024, Bahia Principe Hotels & Resorts, via its parent company Grupo Piñero, signed a hotel management agreement with owner local bank Banco de Fomento Internacional to make its debut with a 605-room hotel on Sal, which is due to open in 2027.
Barceló opened the new-build, 80-room Barceló Praia Cape Verde in May 2024, an urban hotel in Praia, Cape Verde's capital.
There are logistical headaches to operating hotels and resorts on the Cape Verde Islands.
“We need to import almost everything. This is something that is challenging,” Abade said, adding there are Spanish logistics and supply-chain companies increasingly active in Cape Verde.
“Then again, if you have solar panels, you can get your energy for free all year-round,” he added, stating hotels in the 4- and 5-star segments see operating margins of around 40% and 50%, respectively.
Two advantages for hoteliers in Cape Verde are the low cost of labor and the presence of attractive development sites.
“Labor cost is not as expansive as in Europe, but it is going up, and there is not a lot of land available seafront in the world close to [Europe], but Cabo Verde has this. The Canary Islands are already under pressure. We are the Canary Islands 30 years ago,” Abade said.
According to CoStar hospitality data, hotel occupancy in the Cape Verde Islands has not returned to pre-pandemic levels. In full-year 2024, occupancy was at 60.1%, down from the 67% in 2019 but up from 47.9% in 2023.
Average daily rate and revenue per available room in Cape Verde's hotel market have risen noticeably, however. For full-year 2024, ADR was 11,461.75 Cape Verde escudos ($111.40), up 7.2% year over year and up 29.8% over 2019.
Hotel RevPAR in full-year 2024 in Cape Verde was 6,883.71 escudos, up 34.5% year over year and up 16.3% from 2019.
Abade and Duarte are hopeful for Cape Verde’s future.
“Democracy here is something that is assumed. We had a presidential election [in 2001] with a difference of 12 votes, and there was a peaceful transition," Duarte said.
"And we also have one island, Fogo, that produces wine — white wine on volcanic soil,” Duarte added.