5 Star Resort Isla de Margarita

Industry Overview

Talking about investing in Venezuela is frightening but there’s one spot in all of Venezuela where people live in tranquillity, with high a standard of living at a very convenient price. This is Isla Margarita, a freeport in the Caribbean Sea since 1971.
Its inhabitants call it the “Pearl of the Caribbean” and they’re right. Isla Margarita has always been one of the main tourist centers in Venezuela and has been the destination of hundreds of thousands of people from the airport every year. Until the COVID crisis in 2020, which reduced the annual visits drastically. In 2022 there has been a solid recovery and according to Corpotur (local tourism corporation) Isla de Margarita received a total of 391.340 visitors. The “All In Resorts” and Boutique Hotels reported a 95% of occupancy. (whereas the 3*** hotels only 30%).

Location

The Hotel is located in the eastern part of Isla Margarita, a touristic area that combines luxury vacation centers full of services and amenities with inhospitable corners surrounded by wild nature to the south of the Caribbean Sea and only 23 kilometers from the Venezuelan coast. From the Santiago Mariño Caribbean International Airport it is a 46-minute drive to the property.
On the island you can visit idyllic places by car such as the Mirador de Santa Ana or Fortín España, where Spanish cannons used during the independence process are preserved, the Basilica La Virgen del Valle, the Castle of San Carlos de Borromeo and the castle of Santa Rosa, La Restinga National Park and towns like Juangriego and Porlamar.

Business Description

This Hotel Resort ***** , a unique complex at the “Pearl of the Caribbean”.
With more than 170 hectares of land, 757 rooms spread over three hotels, + 108 condominium apartments, a convention center with the possibility to create a Grand Casino, and vast variety fo facilities, Lagunamar is to become the new “place to be” for luxury tourism in the Caribbean.
Existing Premises
3 hotels + restaurants
1 convention centre
Urbanisation w/ 108 condominiums
6 swimming pools
9 tennis courts
Recreation center/ gym. Spa & Discotheque, Restaurant
Artificial lake
Private beach
In addition, there is also a pre-approved project for an 18-hole golf course designed by a renowned expert, which includes the construction of 2.560 apartments of 100m² each.
And if that were not sufficient, one of the plots included in the operation is part of a project for the possible construction of a private airport.

Although the resort is currently closed and requires a solid investment, this is undoubtedly a unique opportunity to create an iconic and unique place in this booming area of the Caribbean.

Financial Summary

The hotel is currently closed.

Investment Rationale

According to the official appraisal report, the hotel "as was in 2015" would value at 120 million USD,
Due to the current state of the hotel and the considerable CAPEX to be invested, the owners will look at offers around 30 million €
Capex required to reopen the hotel = 30-50million according to the level of luxury.
Moreover, the third building was still under construction at closing of the hotel, Finishing this building would require 20million.
Other projects such as the golf course, 2500 flats and possible private airport will need separate investment budgets.

Customer Overview

The aim of the project is to be a direct competitor of the Luxury resort in the Dominican Republic "Casa de Campo". The project has all the necessary ingredients to do so.

Transaction Information

Asking price around the 30million USD range

Political Situation Venezuela

After decades of turmoil and 9 years of devastating financial and humanitarian regime led by Maduro, 2022 has been a year full of changes. Reopened borders, sanction relief by US, UN and EU, the return of international companies to the country (such as Chevron) and recurring foreign investments is a clear indicator that Venezuela is heading towards a slow but steady recovery.
Moreover, Maduro’s policy of returning expropriated real-estate to industry and private owners returns, bit by bit, the confidence in the economic regime which has suffered from the massive flea (both humanitarian and industrial).
Attracting foreign capital and improve international relationships is top priority on the Venezuelan government’s agenda in order to return stability and well-being to the public.