Malaysia on Wednesday expressed interest in investing in the Maldives world-renowned tourism industry.

Visiting Malaysian Prime Minister Najib Razak told journalists in Maldives capital Male that his country was impressed with how the Maldives had developed itself as one of the most popular holiday destinations in world, despite logistical and other challenges.

Najib hailed the Maldives’ success in tourism as having exceeded beyond expectations, saying that the island nation had been able to bring in some big names to operate hotels and set its popularity as a major global tourist destination.

“We would like to study how you have achieved that. I hope there will be opportunities for Malaysian companies to partake in the investment of your tourism development,” he said, at a joint press conference with his Maldivian counterpart Abdulla Yameen Abdul Gayoom after one-to-one and bilateral meetings at the President’s Office in Male.

Responding to the prime minister’s comments, President Yameen said he hoped that Malaysian investors would seize the available opportunities in the Maldives. An appropriate mechanism will also be set up in order to promote business, trade and investment cooperation as well as enhance collaboration between private sector operators, he added.

Meanwhile, a joint communique issued at the end of the Malaysian premier’s two-day official visit stressed that the two leaders discussed the potential for win-win cooperation in the area of tourism and hospitality. They agreed to enhance exchanges in the tourism sector, especially in capacity building, it said.

Maldives has gained in popularity amongst Malaysian travellers, with arrivals from the Southeast Asian country observing a 24.7 percent growth over the past 11 months of the year to reach 16,861 from 13,521 in the corresponding period of last year.

This interest has boosted air connectivity between the two countries. Malaysia based low-cost airline AirAsia has increased its frequency to the Maldives, adding four flights per week to its existing daily service.

Maldives has also attracted a new wave of foreign investments in tourism, especially by Asian giants.

Singapore’s Park Hotel Group has opened its first resort in the Maldives, while major international hotel chains such as AccorHotels have entered the Maldives with two openings and two in the pipeline. Brands like Hard Rock International, Capella Hotel Group, Carlson Rezidor Hotel Group, Emaar Hospitality Group, Mövenpick Hotels and Resorts, Baglioni Hotels, Emerald Collection and Meliá Hotels International have announced their entry to the Maldives as well.

Existing international players are also upping their presence, with Marriott International set to launch Westin brand, Hilton Worldwide to re-introduce its top-end luxury brand Waldorf Astoria, Aitken Spence Hotels and Resorts to introduce its Heritance brand, Minor Hotel Group to introduce its AVANI brand, and LUX* Hotels and Resorts to open its second resort in the Maldives. Centara Hotels and Resorts has also signed a management agreement for its fourth resort in the tropical destination.

Leading local hotel groups, including Atmosphere Hotels and Resorts, Sun Siyam Resorts, and Crown and Champa Resorts, have also announced expansion plans.

Meanwhile, the first integrated tourism developments in the Maldives — Emboodhoo Lagoon project and Rah Falhu Huraa lagoon project — are underway.

However, this rapid expansion of supply has resulted in a slowdown in growth in tourism, after years of double-digit growth. The government has set an ambitious target of attracting 1.5 million tourists by the end of this year, but the country has been struggling to create demand amidst a significant increase in bed capacity.

Along with the new resort openings come the challenge of increasing demand from budget travellers who choose guesthouses over luxury resorts that the Maldives is known for. The guesthouse sector has rapidly expanded with over 450 guesthouses in operation today.

The government has recently announced new steps to maintain a structured growth in tourism, including a slowdown in leasing islands for resort development and increased marketing efforts in key markets such as China and the Middle East in order to reach an ambitious target of a record 1.5 million tourist arrivals this year.