We’ve been reading a lot lately about what trends executives are seeing on wall street, and it seems that alternative assets and new world insights are the latest thing. This is encouraging news for us here at Marfa Advisors and our clients, too. It seems like investors of all types are moving towards investments which are a bit more risky in the interest of increasing their returns. Why? We think it’s because of the incredible highs seen in the markets, and. given these high returns, investors are willing to be less risk adverse. Anyway, given this change in investor appetite, we thought it would be interesting, and perhaps helpful, to write about some of the more promising investments we are seeing these days:
Sustainable Resorts
- The Pared-Back Hotel
A new definition of luxury is on the cards. Gone is old-school opulence – overblown, fussy, and formal – and in is a pared-back approach that focuses on pampering and soothing the senses. Contemporary chic these days means less is more. That’s not to say, however, that comfort will be skimped on – importantly, what is on offer is of the very best quality. In these new-style properties, for example, surplus furniture in hotel rooms is de-cluttered and simplified, and, instead, the emphasis is on what we really want: a large, über-comfortable bed, intelligent technology, and luxe textiles. Bathrooms are spacious and decadent – giving the occupant encouragement for relaxation time and finding head-space. Meanwhile, at the in-house restaurants, chefs have honed and edited their menus and wine lists, ensuring the very best value and choice.
- The Edible Resort
Farm-to-table, ocean-to-plate, beehives on roofs, rambling kitchen gardens… the rise of the ‘edible’ resort seems unstoppable. Muriel Muirden, trend forecaster at WATG, one of the world’s leading hotel architectural firms, has pinpointed this as a key travel trend for 2017.
As well as advising WATG’s global leaders on tourism trends and market opportunities, Muriel conducts research on evolving hospitality products and market dynamics. With 25 years of experience in the tourism industry, she has particular expertise in the fields of development strategy, concept evaluation, and business planning for major tourism, hotel and resort real estate enterprises.
‘There is without doubt an increased awareness of the provenance of what we eat,” says John Goldwyn, vice president of Planning and Landscape at WATG. “Our focus increasingly is on creating hotel landscapes that are edible ornamental gardens. We are placing hotels within vineyards, under olive groves and above edible parterres to create enduring, relevant and delicious experiences for hotel guests. Why have a fruit bowl when you can wander onto your balcony and pluck an orange from the tree?”
Our client, Kittitian Hill ,in St Kitts, is, in our mind, the premier example of this growing trend. Besides the first edible golf course, 90% of the food consumed on the resort is grown on site organically. Moreover, the fish is all caught within eye sight of the beach and any meat served is raised on the island.
- Adventure Travel
Pack, Pedal & Paddle: Active Travelers Rule: As long as we’re talking about boomers, many are loath to admit they are aging (or at least refuse to concede that it makes any difference), and often pursue fitness as a lifestyle. Along with Gen Xers and millennials, those who are 50+ are still keen to pursue the kinds of activities that typically define “adventure travel”: hiking, cycling, rafting, scuba diving, skiing and climbing, among others. And, as conventional destinations become overrun, “commoditized McTravel” experiences are becoming less desirable, said Klassen, speaking at the ATTA’s Adventure Elevate meeting in Snowmass, Colorado in June 2015. Sedentary, standardized travel packages, including lie-on-the-beach vacations, are becoming less popular, while active adventure travel booms.
Greener is Greater: Ecotourism is Growing: The U.N. World Tourism Organization predicts there will be some 1.6 billion eco-inspired trips taken between now and 2020. Adventure tourism operators must promote sustainable environmental practices because the experiences they offer depend on protected natural settings and resources as well as meaningful cultural engagement. The destruction or Disneyfication of a destination will undercut the reasons travelers go there in the first place — a powerful incentive for practices that encourage conservation and respect for land, people, and wildlife. As travelers become more eco-aware and seek out responsible tourism providers, ecotourism and conservation travel will continue to grow.
Keeping It Real: Authenticity is Paramount: Research shows that adventure travelers place a higher premium on exciting and authentic experiences, reflecting a distinct set of values shaping the future of travel. Rather than check off a list of sights, contemporary travelers value doing and engaging over more passive “sightseeing.” In a world where chains and franchises have homogenized so many destinations, and mass tourism keeps travelers at arm’s length from the people who live in the places they visit, travelers crave genuine, meaningful experiences. They want immersive cultural encounters: hands-on cooking lessons, a meal in a local host’s home, an intimate concert, a visit to an artisan’s private studio. They prefer to be guided by someone who’s a native of the place they are visiting. They want to explore nature, culture, and history while interacting with a place and its people.
Geothermal
Geothermal is posed to grow by leaps and bounds internationally in the coming years, with rapid growth in countries like Indonesia, the Philippines, and Kenya, all rich in geothermal resources. Major players involve investment banks like JICA and the IADB, who are teaming up with countries with untapped geothermal energy like Chile to diversify their national energy portfolios and meet the Paris Climate Agreement goals of significantly lowering the global output of CO2 in coming decades. Countries like Kenya and Indonesia have set frameworks in place and target goals of geothermal development to be achieved in the coming years, providing a significant portion of electricity as these countries go green.
International Market Highlights:
- Between March and September 2016, a total of 44 new geothermal power projects began development throughout 23 countries, adding 1,562.5 MW of developing capacity.
- 5 MW of electricity was brought online when Unit 3 of the Domo de San Pedro Geothermal field was commissioned in late April 2016. Located in the state of Nayarit, Domo de San Pedro is the first private geothermal field in Mexico.
- Croatia, Iran, and Malaysia are all currently developing their pilot geothermal projects, adding 45 MW of planned capacity to the global mix.
- Croatia’s first geothermal plant at Velika Ciglena-Bjelovar is expected to reach COD in May 2017. It is expected to have 10 MW of planned capacity.
- Iran’s 5 MW pilot geothermal plant at Meshkin Shahr is expected to reach COD in the first half of 2020.
- Apas Kiri-Tawau, Malaysia’s first geothermal plant, is expected to reach COD by June 2018. It is expected to have 30 MW of planned capacity.
- Exploratory drilling began in August 2016 for Taiwan’s project for geothermal development at Sanxing. It will take about six months to complete.
- The Caribbean island of Dominica is accelerating its plans for development by pushing a new geothermal-specific bill through its parliament and partnering with New Zealand to construct the country’s first geothermal power plant.
- The IceLink subsea HVDC power cable, a proposed 1,000 km national grid interconnector between Iceland and Great Britain, is currently in its feasibility stages. If the cable is to be constructed, it is expected that 954 MW of new, large hydrothermal and geothermal plants will be needed in Iceland by 2035 to meet new demand.
- In a new draft of the official Indian geothermal energy development framework, the Indian government has set an ambitious 1,000 MW target for the coming years and up to 10,000 MW to be developed by 2030.
- China has proposed to triple its geothermal production in the next four years, targeting 530 MW from geothermal power.
- The Indonesian Government is preparing to move to a fixed-price, feed-in-tariff in an effort to accelerate geothermal development. The Energy and Mineral Resources Ministry is also working on cutting down the time of geothermal permitting to a process that could only take three hours, a similar process already in place for other industries.
Final Thoughts
While each of these opportunities have their unique aspects and pitfalls, they all represent opportunities for investors seeking consistent returns for an extended period of time. Whatever the case, we currently have many of these opportunities in front of us if any of our readers are interested in learning more.
