A slew of high-end hotel brands are busy constructing new properties to accommodate an expected influx of Australian tourists, on the back of Department of Foreign Affairs and Trade-backed Qantas direct flights to Palau from Brisbane International.
Travel Weekly was aboard the recent first official Qantas flight, the Palau Paradise Express, with the Palau Visitors Authority Australia, Department of Foreign Affairs and Trade officials, Australia’s Ambassador to Palau, Richelle Turner, and the President of Palau, His Excellency Surangel S. Whipps, Jr.
And what’s to come
Hotel Indigo Palau
IHG Hotels & Resorts signed a management agreement with Palau Coral Club, to open Hotel Indigo Palau at the end of 2024. However, a string of calamities sees the resort now not due to be open until May this year.
Hotel Indigo Palau will boast an outstanding location on Malakal Island, fronting onto a coral reef with amazing views and immediate access to world-class diving and marine life. It will feature approximately 187 guest rooms, an all-day dining Neighbourhood Café and separate restaurant, a sunset bar by the pool, meeting rooms for 60 people, a resort centre, swimming pool, spa and gymnasium, and all the facilities necessary for guests to relax and enjoy a memorable stay.
Marriott Hotel Palau
Further back in the pipeline, Marriott Hotel Palau, being developed by Wanjin Palau Development Co, began construction in mid-2024. The first phase of the project encompasses 184 rooms over 20,000 square metres, with amenities such as a beach, marina, swimming pool, restaurants, bars, gym, spa, shops, and a multi-function hall. The construction period for this phase is 560 days. Specific opening dates have not been publicly announced.
Sheraton Palau Resort
Meanwhile, the Sheraton Palau Resort is also in the works thanks to Palau Majesty Development Inc, which is investing around $200 million in this 154-room hotel. Construction started in mid-2024 with the finished product promising multiple dining venues, a fitness centre, event hall, spa, and access to tropical wildlife and oceanfront views.
Both the Sheraton and Marriott properties have expected completion dates of late 2025 or early 2026.
Four Seasons Resort Palau
Finally, the Four Seasons Resort Palau, which was initially delayed due to property disputes, is now progressing, with an expected completion by 2027. The resort will offer 50 rooms overlooking the UNESCO World Heritage-listed Rock Islands. In the interim, the Four Seasons Explorer, a luxury liveaboard yacht, has been operating in Palau since 2023, providing guests with unique diving experiences.
Foreign investment rules
In Palau, foreign investors are permitted to own and operate businesses, including hotels, provided they comply with specific legal requirements. The Foreign Investment Act mandates that non-citizens obtain a Foreign Investment Approval Certificate (FIAC) before establishing or acquiring a business enterprise in the country.
This process involves an evaluation by the Foreign Investment Board (FIB) based on criteria such as economic impact, employment opportunities for Palauan citizens, and environmental considerations.
Additionally, foreign investments in Palau must meet certain conditions, including a minimum capital investment of $500,000 and ensuring that at least 20 per cent of the workforce comprises Palauan citizens.
Recognising the importance of high-end tourism, Palau has enacted legislation to attract foreign investment in upscale accommodations. A law passed in 2018 offers tax credits of up to 40 per cent to foreign investors who develop high-end lodging facilities that incorporate sustainable practices, such as independent water treatment systems and renewable energy sources. This initiative aims to reduce environmental impact and lessen the strain on existing infrastructure.
Feature image: Palau 70 islands. Photo: Palau Visitors Authority.
