Impressive returns and the prospect of securing ever-harder-to-acquire sites is drawing hospitality investors towards resorts.
Resorts and central business districts were recently revealed as prime investment targets in CBRE’s 2025 US hotel investor intentions survey, with over 70 per cent calling resorts the “attractive” option. In Europe, meanwhile, the allure of Mediterranean destinations in 2024 saw amenity-rich properties contribute to a regional RevPAR increase of 9.8 per cent year-on-year, according to STR data.
João Cabaça, co-founder and CEO of Portugal’s VIC Properties, highlights the benefits of resorts’ tough barriers to entry, while noting that expert teams are mandatory for such complex schemes. “Customer obsession is key” – he notes – “a relentless focus on creating a better customer experience at every step of the way.”
VIC Properties recently unveiled the masterplan for Pinheirinho, its €1.7 billion luxury hospitality hub in Comporta, Portugal, with construction already underway. Part of a natural reserve and spanning 400 hectares, Pinheirinho will incorporate two luxury hotels and branded residences, bespoke villas, apartments and townhouses, set to be built around its existing 18-hole golf course and surrounding pine forest.
Key competences
Says Cabaça: “Planning a major mixed-use development, like Pinheirinho, requires a multitude of competences. Anyone aiming to successfully deliver a project of this magnitude needs to have a long-term vision and focus on sustainability to ensure longevity, as well as an in-depth understanding of large-scale development and its challenges, and a genuine desire to engage with the local community and its needs.”
With an approved gross construction area of around 200,000 sq m, Pinheirinho has since seen its pre-existing masterplan being re-designed by VIC, with a number of significant sustainability-led measures and responsible development initiatives put forward.
Nevertheless, the local authorities have determined that it will be one of the last major schemes of this type in the area, following recent build regulation changes that put the development of any further coastline projects in the area on pause indefinitely.
“Given Comporta’s status as a natural reserve, the preservation of its celebrated unique character is a very important consideration,” Cabaça says. “Due to recently tightened build regulations, only live and fully licensed projects like Pinheirinho will be allowed to be developed in close proximity to the beachfront and dunes. For the foreseeable future, further coastline development in Comporta will be forbidden.”
For Cabaça, the scheme entails a strong sense of environmental responsibility. “Pinheirinho is building a legacy for Comporta; one that not only respects the land but ensures a sustainable future for the estate for generations to come.” He explains that the business has taken a “multidimensional approach” to the sustainability topic, including nature preservation, resource management, responsible development practices and engagement with the local community. “For example, following VIC’s acquisition of the site, we have added 200 hectares of non-development pine forest and dune land to the masterplan to preserve and enhance the area’s unique landscape and wildlife.
“We have reduced the size of the golf course created on the site by previous developers to minimise water consumption and have introduced a system allowing rainwater to refill the lakes on the estate.”
Upside potential
Privately held real estate private equity firm Invel is another business which is no stranger to large-scale, luxury resorts. In 2021, Invel launched Mediterranean Hospitality Venture (MHV), to take advantage of the market dislocation during Covid, focusing on high-end resorts with significant upside potential through repositioning, premium residential developments and upscale strategies with luxury brands and exclusive F&B.
MHV’s current portfolio consists of prominent luxury hotels and resorts, residential and office developments in Cyprus and Greece. These include Parklane, a Luxury Collection Resort & Spa, offering the renowned Nammos Limassol and La Petite Maison (LPM); The Landmark Nicosia, Autograph Collection, which is a unique integrated project with residences and offices; Nikki Beach Resort & Spa Porto Heli, and Porto Paros, a 200-key luxury resort under development, in Paros, Cyclades, Greece.
Gabriele Magotti, chief investment officer of Invel, says that the firm believes there is still untapped growth potential in the hospitality sector in Southern Europe, Greece and Italy in particular. “There is very strong demand for luxury resorts in Greece, so we are very excited about the market’s prospects. This is one of the key areas in which we are deploying capital, as we see strong customer growth.” He adds: “We are also exploring future expansion of the resort model in Italy where the market is underdeveloped. There are very interesting opportunities, as it is a very deep market with many potential destinations.”
Like Cabaça, he underlines that in-house expertise is essential in developing and operating successful resorts. “The first challenge is on the capex side,” he notes. “Construction costs are still high which has sidelined many projects across the industry – for some the overrun has been significant. It is crucial to have a very good project and construction management team to make sure that the project is under control and that the procurement strategy is the best, in order to deliver the project on time and on budget.”
Operational challenges
Resorts also imply a wealth of operational challenges. “The availability of the workforce is still critical,” Magotti says. “We can see there are still tensions in that area, obviously in the luxury space the service is of utmost importance, so operators are placing more and more attention on securing the critical talents that are necessary for success. But challenges remain.” He notes that some operators are now trying to train their workforce internally or retain them long-term with corporate benefits and incentives. “Fortunately, there is a growing focus on nurturing talent in the hospitality industry. It was disregarded a bit in the past, but operators and managers are realising that it is central to business, as it is a people business at the end of the day.”
Cabaça similarly recognises that labour issues require further attention. “Career opportunities in hospitality, especially in places like Portugal, continue to be in demand, and we are seeing high levels of interest from people looking to get involved in projects, like Pinheirinho, at various stages. There are, however, challenges, with staff housing being an important one.” He adds: “We are deeply committed to ensuring Pinheirinho only brings benefits to the local community, so are planning to build our own staff accommodation to ensure the wellbeing and comfort of our on-site employees and avoid putting pressure on the local housing stock.
“Technology can play a role in helping alleviate some of the challenges faced by the hospitality sector, but won’t solve all of them, so it’s important for developers to step up.”