Atmosphere Core eyes South Asia beyond Maldives

Maldives-based Atmosphere Core is stepping outside its core market where it has eight high-end new development and conversion resorts that leadership said drove $2 million in profits in 2022 for owners.

Deputy Managing Director and Head of Investment & Strategy Shrikant Dash said nearby India is the biggest target for growth with an Ozen-branded property in Kolkata set to open in 2024 and another eight deals soon to be announced. The goal there is 25 signed hotels by 2025. “Once we do operate a hotel in India, once that starts flashing, I think there’s going to be more traction, a lot more traction,” Dash said.

Atmosphere is also adding the Ozen Prive Athiri Gili in the Maldives with others there “in the oven.” It has a property under development in the Sri Lankan resort destination of Tangalle with more in that market likely, and Dash said they have their eyes on Bhutan and Nepal.

The asset-light group has three brands, the luxury Ozen Collection, lifestyle Colours of Oblu and more accessible Atmosphere Hotels & Resorts. It debuted in late 2013 with the 162-villa Atmosphere Kanifushi Maldives. Dash said Atmosphere Core, owned by three international investors, welcomed more than 107,000 guests to the Maldives in 2022 – 6% of the guest market share.

Owning company Atmosphere Core Pvt. Ltd. is chaired by Ismail Hilmy and includes Abdul Latheef and Salil Panigrahi. Property owners are high net worth individuals from the Maldives, India, Canada, and the U.K., with some of investment from the three co-founders.

Atmosphere Core's Shrikant Dash

Performance in their home market has been solid the past three years, according to Dash, even without Chinese tourists, who for the most part have yet to return. The outlook for 2024 seems to be more of the same with perhaps increasing airfares eating away at some of the growth potential, he said.

Dash, born and raised in India and who previously managed growth and development of EoN Resorts Group in the Maldives, has also spearheaded a slew of sustainability initiatives: Atmosphere has one of the largest solar energy infrastructures in the Maldives, drawing 20% of its energy from solar power; contributes to the Maldives’ carbon neutrality goal with the use of Bema Bamboo – through its charitable arm Atmosphere Foundation; and sources responsibly by working with local suppliers to minimize climate impact.

Atmosphere Core also provides development and planning support in the Maldives to these investors and manages the entire development process, including raising debt provided by banks in the Maldives, Sri Lanka and Mauritius. That level of acumen and involvement has truly helped jump-start growth in property and brand management, according to Dash. “Now we are able to put together deal structures where others are confident in our deal structuring, our concepts and expected results,” Dash said, meaning the founding partners are not required to take an equity position with increasingly confident developers.

Dash added that Atmosphere Core’s reputation for fairness, integrity and successful development continues to drive its pipeline in the Maldives and elsewhere. “That reputation drives a lot of business to our doorstep, and we are able to evaluate what would be most suitable for us,” he said.

Social space at Colours of Oblu Sangeli in the Maldives

The group’s approach to management is also more evolved, Dash added. “This whole idea of management agreements being lopsided and biased towards the manager who imposes their views on the property is something we’ve stepped away from,” he said. “We take a view that management should be fair and balanced between the parties, recognizing the value of the owner into the asset and the kind of efforts and money they have risked. That should reflect in the management agreement – a mutual respect.”

Leisure-focused growth

Dash calls Atmosphere properties “leisure focused,” which to him means they can work in resort and urban destinations, which is the plan for India. “We have introduced a lot of storylines with the properties, which is what really drives us,” he said. “We are not selling the rooms – we are selling experiences for the locations.”

Competition for the HMAs in India have been very competitive and Dash said they are used to competing against the industry giants, both global and domestic. Some existing relationships have helped, and it became more a matter of convincing developers to partner.

Right now, the story is South Asia, probably one of the most exciting places to be. It’s growing and when I speak to people, everybody’s optimistic. There’s actual investment. Deals are closing, especially in India where everybody sees the gaps in the market and rushing in to fill in those demand gaps.

Shrikant Dash

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Dash also thinks their “leisure” positioning matters, as well as India’s proximity to the Maldives is a plus. “It’s not difficult for people (developers) to come stay with us. And when they see our operation, they’re far more convinced,” he said. “And sometimes you win because you’re small, and they can talk to you.”

Dash is also not afraid to compete with the giants on the all-important distribution aspect of the business, suggesting Atmosphere’s as strong as anyone else, with the except of loyalty program memberships. “We are extremely well connected on the distribution platforms, and we have offices worldwide,” he said. “One of the big advantages of starting in Maldives is because the inbound is so global you have to have a global distribution presence… So, I don’t believe we are at a disadvantage on the distribution.”

Longer term, Dash said Atmosphere is designed to grow everywhere, but for now the strategy is “one step at a time.”

“We would certainly like to be everywhere,” he said. “But I would say one step at a time. Right now, the story is South Asia, probably one of the most exciting places to be. It’s growing and when I speak to people, everybody’s optimistic. There’s actual investment. Deals are closing, especially in India where everybody sees the gaps in the market and rushing in to fill in those demand gaps.”

Perhaps this sane approach is also led by the challenge of managing the growth, not to mention the ever-present macroeconomic questions. “We want to ensure that the core culture of the organization continues – that’s probably the biggest challenge that I see, even more so than sourcing deals and getting hotels built,” he said. “So, we’ve been investing a lot in the learning and development space internally to ensure that we have core ambassadors within the group who can potentially move into different projects and guide our colleagues.”

Dash added that training team members to take sense of ownership in their properties matters most. “Take ownership of the guest. That’s the big challenge because the success of the brand will come from the operational delivery at the end of the day.”