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TOURISM DEVELOPMENT IN THE MALDIVES .......................................... 134
5.1 TOURISM SUPPLY ................................................................................................... 135 5.1.1 TOURIST RESORTS ................................................................................................ 138 18.104.22.168 Geographical expansion.................................................................................... 139 22.214.171.124 The first phase................................................................................................... 142 126.96.36.199 The second phase .............................................................................................. 143 188.8.131.52 The third phase ................................................................................................. 145 184.108.40.206 The fourth phase ............................................................................................... 145 5.1.2 UNREGISTERED BEDS ............................................................................................ 147 5.1.3 SAFARI VESSELS ................................................................................................... 149 5.1.4 HOTELS AND GUEST HOUSES ................................................................................. 151 5.1.5 OTHER TOURISM SUPPLY ....................................................................................... 153 5.1.6 OWNERSHIP OF TOURISM SUPPLY .......................................................................... 154 5.2 TOURISM DEMAND ................................................................................................. 155 5.2.1 NUMBER OF TOURIST ARRIVALS............................................................................ 155 5.2.2 OCCUPANCY ......................................................................................................... 158 5.2.3 AVERAGE DURATION OF STAY AS A MEASURE OF DEMAND ................................... 159 5.2.4 NUMBER OF BED NIGHTS AND THEIR SIGNIFICANCE .............................................. 160 5.2.5 TOURIST GENERATING MARKETS .......................................................................... 162 5.2.6 MARKET SEGMENTS BY THE PURPOSE OF VISIT ..................................................... 166 5.2.7 SEASONALITY VARIATIONS IN TOURIST ARRIVALS ................................................ 169 5.3 CHAPTER CONCLUSIONS ........................................................................................ 172
Chapter Five TOURISM DEVELOPMENT IN THE MALDIVES 5 Tourism development in the Maldives
This chapter presents an evaluation of tourism supply and demand and, an analysis of the geographical expansions of EMIT with regard to the Maldives. There have been other studies based on the tourism industry of the Maldives that has some bearing on tourism supply and demand (Niyaz, 2002; Domroes, 2001; Firag, 1999; Mausoom, 1998; Nethconsult/Transtec & Board Failte, 1996; Cockerell, 1995). However these studies did not provide a comprehensive critical analysis of tourism supply and demand, particularly for the thirty years (1972 to 2001) covered here in this chapter.
This chapter is based mainly on statistics sourced from the government of the Maldives and supported by empirical research. Issues concerning the reliability of these statistics were discussed in Chapter 3. Various strands of data presented in Appendix 5.1 to 5.13 are analysed in order to provide a comprehensive longitudinal evaluation of tourism supply and demand in the Maldives. These analyses are discussed in relation to the findings from the empirical research in order to comprehend the environments that are affecting tourism supply and demand in the Maldives. It has also attempted to correlate aspects such as tourist generating markets to some other island destinations, in order to have a broader understanding.
The expansion of the tourism industry of the Maldives is examined here under the broader classification of tourism supply (with an emphasis on EMIRs); and tourism demand in terms of volume and generating markets. The tourism supply was projected through the analysis of bed capacity, pleasure peripheries, other tourist facilities, services and
and transport providers. any establishment (or vessel) that provides accommodation for tourists must be registered with and licensed by the National Tourism Authority (NTA). The demand perspective is projected through indicators such as the number and nationality of arrivals and duration of stay (Swarbrooke. all tourists except those hosted by friends in their own residences. Whilst this analysis covers the whole thirty years from 1972 to 2001. and (4) tourist vessels. Even in the Maldives there are yacht marinas and dive centres.attractions. are required to register at a licensed establishment. Since the introduction of the Maldives Tourism Act 1979. 1998). the Ministry of Tourism1. (3) tourist guesthouses. Theobald. 135 .1 Tourism Supply There is more to tourism supply than places that provide accommodation (Angelis & Salamoura. 5. 2001. Accordingly. The government of the Maldives classifies the accommodation sector into four categories: (1) tourist resorts. which can be considered as important components of tourism supply. (2) tourist hotels. in this chapter more emphasis is given to the analysis of accommodation in EMIRs as they are the main indicator of tourism supply in the Maldives. more emphasis is placed on the post 1990 period in order to have a more in-depth analysis of the recent past. However. 1998). 1998. The Tourism Act 1999 defines these as follows: 1 When this law came into force MOT was a „Department‟. Wanhill.
in compliance with standards determined by the Ministry of Tourism. that has been developed.a) “tourist resort” means an island or a designated area of an island that has been developed to accommodate tourists and to provide board and lodging facilities for them. while hotels and guest houses account for 4% and 2% of the bed capacity respectively.392 16. to provide board and lodging for tourists for a payment decided at a certain rate per day of stay on board such vessel ” (Maldives Tourism Act. 1999. in compliance with standards determined by the Ministry of Tourism. to provide board and lodging or [only] lodging for tourists for a payment decided at a certain rate per day of stay. other than a tourist resort or tourist guesthouse. other than a tourist resort or a tourist hotel.765 As indicated in Figure 5. 15). 136 .1. in terms of bed capacity the most significant sector is the tourist resorts with a share of 87% followed by tourist vessels with a share of 7%. b) c) d) Sector Guest houses Hotels Number of beds 2001 Vessels Tourist resorts Total 367 688 1. p. “tourist guesthouse” means an establishment.318 18. “tourist hotel” means an establishment. “tourist vessel” means a seagoing vessel that has been developed. that has been developed to provide board and lodging or [only] lodging for tourists for a payment decided at a certain rate per day of stay.
The third sector is hotels. These are establishments that provide accommodation and food and beverages. It does however imply that “the basic Maldivian product of sea. The last and the fourth sector are the guesthouses. 2002: PER 20). hotels and guest houses can be usually located only in the capital Malé. lower in standard and have the provision of food and beverage services as an option. at government‟s discretion other developments may be licensed. which are popularly known in the Maldives as „safari boats’. and sand are homogenous characteristics to almost all the island resorts” (Interview. As of 2003. and as such there have been two hotels developed to cater for international tourists: the Equator Village in Addu. “Each island resort itself is a product that projects the image of the Maldives as a whole in terms of its natural attractions (Interview: PER7). These are similar to hotels except that they are smaller in size. However. These are seagoing vessels. which provide accommodation and food and beverages and also often diving facilities.The tourist resorts (that are commonly referred to as EMIRs in this thesis) form the single most significant sector that represents tourism supply in the Maldives. In addition there are informal „accommodation providers‟ for the very limited domestic tourism that exists in the islands of the Maldives. and Hulhulé Island Hotel in Hulhulé. The second most important sector of tourism supply are the tourist vessels. 137 . sun. This does not mean (as further elucidated in Chapter 7) that all the island resorts in the Maldives are the same or that they offer the same facilities and services.
By the end of 2001 there were 87 resorts and over 16.3). it is commendable practice to provide wholehearted hospitality for „travellers‟. However. The growth trend suggests that it will increase further in the future. 138 . Personal observation). free of charge. since the introduction of tourism.1. 2002. According to the Maldivian traditions.Even prior to the beginning of EMIT most of the islands have had a „guest-house‟ known as rah-vehi-ge2 (managed by the Island Office or Island Council). and subsequent increase in travel „free hospitality‟ is fast becoming a thing of the past (Personal observation). the number of tourist resorts and their bed capacity has increased significantly (Figures 5. 5. that provided accommodation for visiting dignitaries from Malé.1 Tourist Resorts Since the commencement of EMIT in 1972. usually on a complimentary basis (Interviews. 2 Which means “community-house”.300 beds.2 and 5.
600 beds. which is still under sonctruction. While this thesis was being completed. Out of these the first two phases experienced an open policy of location of the resorts.There could be an increase of another 6. 3 4 This does not include 400 planned beds at Hudhufushi.4). Now.1 Geographical expansion The very first two resorts that were opened in the Maldives were less than 5 miles form the airport. if the government is to follow the recommendations of the STMP (Nethconsult/Transtec & Board Failte. of which 3.000 beds to the resort sector during the period 1996-2005.100 beds3 have already been built and are in operation. The STMP has called for an addition of 10. where as in phases three and four the location of the resort was decided by the government under planned expansions (see also Chapter 6).3). MOT has placed on lease 11 new islands with a total bed capacity of 1.500 beds (in any number of new resorts) by the year 2005. after thirty plus years there are EMIRs that are over 80 miles away from the main airport (see maps presented in Appendices 4.1. Based on the chronological opening of the EMIRs and their spatial distribution four phases of development can be identified (Figure 5.1. 4 5.2 and 4. from different atolls of the Maldives. thus taking tourism to every single atoll. 139 . 1996).
4th Phase 3rd Phase 2nd Phase 1st Phase 140 .
2000. 2002: PER 10). Pearce. As can be seen from the Figure 5. most of the resorts were located in close proximity to the main airport. “This was not because of any deliberate planning by the government but rather influenced by the difficulty in inter-island transport which meant that only those islands within close proximity to the international airport were accessible and hence suitable for resort development” (Interview 2002. This is not on the grounds of the capacity exhaustion in the close proximity.The spatial distribution of resorts can be a matter of serious concern for all the stakeholders in the tourism industry.4). thereby compelling spatial expansion (Burns & Holden. During the first and second phases (Figure 5. marketing and control etc.4. 141 . However. (Holden. especially in relation to factors such as socio-cultural exposure. transport. when the developer‟s family or friend/s has an island (leased) even from a bit far. rather it dependent on who held the agricultural lease of the uninhibited islands. 1995). PER 30).4). “Even with significant logistical and operational difficulties. preference may be given to develop that island as a resort rather than giving a share to some one who is not a relative or a friend who has (leased) an island nearer to the airport” (Interview. there have been incidences where faraway islands were also developed as resorts (Figure 5. and Appendix 5.5 there is a general trend towards an increase in the distance between the airport and EMIRs according to the aging of the industry. This is to be expected in a scenario of continuous development of resorts and increase in bed capacity because each aspect of the carrying capacity has a threshold limit that would eventually be reached. environment. 1995).
this can be considered as „putting all the eggs in to one (fragile) basket‟. the four phases identified in Figure 5. For example Kuredhoo Camping Resort (developed on the island of Kuredhoo).1). In terms of the expansion of tourism supply.5. which was opened in 1978. During the third and fourth phases (Figure 5.1. 1996). This was in line with the STMP‟s recommendation for geographical expansion (Nethconsult/Transtec & Board Failte. some islands developed during this phases did not fit the general trend. This expansion was alarmingly rapid given that the tourism was a new industry.300 (Figure 5. but by the end of the first phase the number of resorts has increased to 17 and their bed capacity to 1. A list of resorts.5.2 The first phase In 1972 there were the first 2 resorts and 270 beds.Hence. Appendix 5.4) the islands to be developed were selected by the government. 5.4 are further analysed and evaluated respectively in the following sub sections. Nonetheless. and a lack of controls on tourism affairs by the government provided an 142 . with their respective distance from the Malé International Airport and the year of opening is presented in Appendices 5. is as far from the airport as some of the resorts that opened in late 1990s. As the focus of the main national economic activity turns away from the relatively „stable‟ traditional fisheries industry towards the more „fragile‟ new tourism industry. (which is discussed later in this chapter). the huge increase in visitor arrivals.1.4 and 5. based on the availability of (supposedly) appropriate islands within a radius of 80 miles from the Malé International Airport.
This led to extensive and rapid investments in tourism and island resort developments by both the local and foreign entrepreneurs.environment of „make hay while sun shines‟ for the private sector. 2000). 143 . This phase witnessed some characteristics of „metatoursim‟ because the Maldives did not have what it takes to developed tourism.3 The second phase The second phase. This phase also projected certain characteristics of Circumstantial Alternative Tourism (CAT) (Weaver.1. from 1979 to 1988 saw a „stampede increase‟ in bed capacity in comparison with the „rapid increase‟ of the first phase. 1995). which compelled the involvement of those who had what it takes to develop tourism: foreign investors (Burns & Holden. 5.1.
1 to 5.5). had a bigger capacity. 2000). By the end of the second phase the number of EMIRs has increased to 58 and the bed capacity in the resort sector had increased to 7. 2000). This is observable throughout the four phases. Also the rapid increase in volume. renovations or upgrading. During this phase. However.In comparison with the first phase. 144 . some resorts have also decreased the number of total beds in their resorts. However. One of these measures is that the number of beds that can be developed on any given island is subjected to government quota of up to 20% of land area. in general. without proper control. as such decreases are usually for reconstruction. Perhaps the latter is more significant in that the development of new rooms were taking away the CAT characteristics from the EMIRs (Weaver. 2000). suggests. an inclination towards UMT (Weaver. the rapid changes to the product portfolio and influx of foreign investors in tourism supports Prideaux‟s (2000) model of Resort Development Spectrum. the resorts opened during the second phase. instead of always „adding‟. the introduction of some measures by the government to streamline the expansion in the latter part of the second phase suggests a drive towards SMT (Weaver. This increase resulted from opening of new resorts and continuous development of new rooms in the existing resorts.4 on detailed bed capacity changes for the four phases.100 (Figure 5. As presented in Appendices 5. ultimately the bed capacity gets „regenerated‟ to either the resorts‟ original bed capacity or more.
1983). The other two breaks were just for a year in 1976 and 1993.5 The fourth phase Many would view the fourth phase as a turning point in the Maldivian tourism where the destination‟s standing was turned from a sellers‟ market to a buyers‟ market (Interviews. 2002). the total number of EMIRs has increased to 73. This brought the total bed capacity in EMIRs to nearly 12. In terms of government‟s attempts to control and streamline the tourism development this phase is of great significance because for the first time the government started to dictate which islands were to be developed as resorts and the „maximum number‟ of beds that could be developed on any given island (see Chapter 6 and 7).1. This can be attributed to the rapid expansion of number of resorts and bed capacity in line with the recommendations of the STMP (Nethconsult/Transtec & Board Failte. This in fact was the introduction of tourism to new atolls. which observed the opening of 16 new resorts and closing down of one. This phase also witnessed the first significant break in resort development (between 1995 and 1997) since the opening of the first resort. 145 .5. 5.4 The third phase By the end of the third phase.1.3).5).1.000 (Figure 5. under the auspices of the recommendations of the FTMP (Dangroup. Third phase also witnessed the rare incidence of the government‟s decision to halt the resort operations of the island of Villingili in Kaafu Atoll (see Appendix 4. and convert the island to an inhabited island as the fifth ward of the capital island Male‟.1.
4 most of the resorts opened after 1996. However.300. 2002: PER 50). just within three decades of the opening of the very first resort.134 beds that were developed in the resorts at the time of their initial opening and the addition of an astonishing 8.7).6. The STMP proposed that this expansion was expected to solve the „under capacity‟ problems of the peak season. had constructed rooms to the island‟s maximum allowed capacity for the opening. those who had a significant share of tourism supply seemingly opposed expansions. This comprised of 8. This may be more with a concern to protect personal interests than the tourism industry itself (see Chapter 6). However as can be seen from Figure 220.127.116.11).1996). Whilst those who did not have a significant share of tourism supply welcomed the idea of expansions. This led to the opening of 14 new resorts5 in various atolls of the Maldives by 2001.1 to 5. the STMP failed to fully acknowledge that such an increase might worsen the seasonality imbalance and lower the national annual bed occupancy (see Section 5. which was justifiable (see Section 5. This meant an additional bed capacity of over 3100. and Appendices 5. after facing complicated legal and financial issues 146 . the total number of resorts had increased to 87 and bed capacity in the resort sector has increased to 16. they have poised at the front of the queue to apply for each new opening for resort development” (Interview.184 beds (over 100%) after commencement of operations. 5 This does not include the island of Hudhufushi (with capacity of 400 beds) which was still under construction. However. By the end of 2001. “Those who already had a fair share of the tourism supply were not very optimistic about this expansion.
that would support the changes to the product to attract new markets as suggested by Prideuax (2000) in his RDS. is the existence of a number of unregistered beds in EMIRS. It appears that by the end of the fourth phase government and the private sector has realised that the Maldives was heading towards UMT (Weaever. During this phase the Maldives experienced resort ventures by world-renowned hotel chains such as Hilton and Four Seasons.2 Unregistered beds One of the areas in tourism supply in the Maldives. 5. 1980). 2002). that has evaded all the academic probing and failed to be included in any of the statistics. This would suggest that Maldives may have matured as a tourist destination (Butler. 2000).1. such as themed health resorts.The fourth phase saw further developments to the product. even though only a few would admit that (Interviews. There are two types of beds that are not registered: (a) extra 147 .
Irrespective of the possible inaccuracy of the total number of unregistered beds. and the government and even the community. They argue that if the government allows 15% over booking. It is believed that the government is also aware of this because bed tax is paid to the government based on the beds occupied. but the former category has the potential to be expanded theoretically up to 50% of the capacity. 2002). should the need arise (Interviews.beds capacitated in standard rooms. However these beds are ignored when the resorts‟ island lease (based on „registered beds‟ in the resort) is calculated. because of over crowding beyond the optimum carrying capacity of tourists for one island (Holden. In addition. Most of the resort owners and mangers feel that maintaining unregistered beds is a „permitted‟ practice because the government allows 15% overbooking (Interviews. when their rooms are taken up to deal with overbooking situations” (Interview. “the staff welfare may be compromised when they have to stay in „camplike‟ accommodation for weeks on end. the staff. 2002). The tourists experience may be less wonderful. 148 . their existence is not questionable. and (b) rooms that are usually developed as accommodation for „senior or executive staff‟ but are sold when the usual registered rooms are fully booked (Interviews. 2002). that is an indication that they expect to accommodate 15% more guests in the resort. William & Gil. As they are not registered it cannot be accurately quantified. while the latter category is estimated here (based on personal communications with managers and personal observation) to be about 10% of the existing capacity. 1998). 2000. just by adding a single bed to each room. Furthermore this is not a negligible issue as suggested by many of the respondents because this can have negative consequences on the tourists. 2002: PER 04).
Safari vessels form the second most significant sector of tourism supply in the Maldives (Figure 5. Last but not least the existence of such beds have the potential to make the related statistics less accurate. to understand the overall bed capacity of the Maldives. With regard to the island communities. 1998). 5. because the „sea‟ to the Maldives is same as the „jungle‟ to Africa. There are no reliable statistics that would indicate the bed capacity of tourist vessels prior to 1985. It may seem odd. even if they get bed tax from those occupied (Interviews. Hence this section and the following section analyses safari vessels. at least in the context of „yet to be discovered‟ areas and their potential to provide close encounters with the „other kind‟. to use the word „safari‟ for the inter Maldives cruise tourism because „safari‟ often conveys the meaning of an “overland journey” in Africa with an element of close encounters with often wild animals (Oxford Advanced Learner's Dictionary. for the purpose of understanding the total bed capacity of the Maldives. 1993. In a way it makes sense. however it has been documented that as early as 1972.Furthermore the government may be „writing-off‟ some of potential revenue from island lease.1). p. hotels and guest houses. 2002). an understanding of other major „tourism supplies‟ is thought to be of some essence. The first two purpose built tourist vessels were launched by 149 . and even perhaps confusing.1. 1114).3 Safari vessels Even though this study is anchored on EMIT. cruise tourism existed (Ministry of Tourism 1998). they may get a heavier exposure than would be from a smaller number of tourists (Edwards.
compared with resorts. 2001 (see Appendix 5. there has been a significant drop in the number of beds in safari vessels in. The most common are those with 8. Also the restrictions or control imposed by the government is relatively relaxed for cruise sector (Interview. especially in terms of the capital required. The smallest vessels have just 4 beds (Ministry of Tourism.6) the number of tourist vessels and their bed capacity has increased quiet rapidly from just 74 beds (in 7 vessels) in the year 1985 to 1.7). 12 and 14 beds. 2002). The largest vessel registered with the MOT so far has 144 beds and is owned by a major resort owner/operator. until the figures were updated in 2001. (as presented in the Appendix 5. is that “safari (vessels) provides a relatively easy route of getting involved in the tourism industry. 2002). the linear trend projects that this sector will keep on growing and maintain its popularity. The tourist vessels that are currently in operation are of varying sizes.392 beds (in 92 vessels) by the end of 2001. Since then. This is explainable because a number of the vessels registered had ceased to operate (possibly for a number of years) and were not taken off from the registered capacity. 150 . 6 He was a share holder of Crescent Travel Agency (CTA). Irrespective of the decline in the number of tourist vessels and their bed capacity from the year 2000 to 2001 (see Appendix 5. Ibrahim Nasir had a share. It appears that. 10. from a supply perspective. Perhaps it is significant that in 2000 there were over 1. Ahmed Adam6 and Akiri Enterprises with a bed capacity of 6 and 8 respectively (Niyaz. in which president Mr. This sector of tourism supply received significant popularity in 1985. 2002: PER 28).700 registered beds in this sector.Mr. The main reason for this.6).
As presented in Appendix 5. 2002: PER 38). even though to a lesser extent than that of the resort sector (Interview. However. since 1998 it has been projecting a slow but a steady annual growth. 2001.8. However. and in 2001 the bed 151 . This is an indication that without unbiased government intervention.1).8). There appears to be not much of a difference between hotels and guest house as can be seen from the definitions used in the Maldives Tourism Act 1999 (see Section 5. 5.4 Hotels and guest houses Guest houses were the first accommodation establishments developed in the tourism industry of the Maldives and they existed even prior to 1972 (see Chapter. Nonetheless they have shown the least growth through the period under examination (Appendix. with the highest of 472 beds recorded in 1994 and the lowest of 276 recorded in 1996.For those who cannot afford a huge investment. since 1992 the number of beds in guest houses has remained between 270 and 480. even in this sector marketing requires the involvement of foreign tour operators. Yet. 5. fair distribution of tourism wealth may always be polarised (Jeffries. the tourist vessel sector seems to be a realistic option. Hall 2000a). Many resort owners/operators also have a share in this sector as well. the Ministry of Tourism classifies them respectively. 4). Because of their financial strength and „marketing connections‟ they are in a better position to compete with the small individual operators. and also the physical appearance of such establishments (Personal observation).1.
The first hotel (to be developed outside Malé). 152 . However this hotel and the hotel in the Hulhulé island. Yet this is indicative of the need to review the existing definitions pertaining to resorts.1).capacity in guest houses reached the 360 mark. as a transient hotel. hotels and guest houses. Equatorial Village. safari vessels. This steady increase is because (a) new hotels have been developed. This hotel was first opened as Ocean Reef Resort in 1988.1). 7 This is the island of airport. 2002: PER 34). In contrast to the guest house sector. the bed capacity of hotels has expanded significantly from just over 150 beds in 1992 to over 680 beds in 2001. is in Gan island of Addu Atoll. after modifying the barracks of the British air base. and (b) existing guest houses have been upgraded to the „hotel‟ status. Another noteworthy development in this sector is that in 1998 the second hotel to be located out of the capital island was opened in the island of Hulhulé7. which is just a mere 2% of the total bed capacity of the Maldives (Figure 5. This is understandable considering that the typical Maldivian island resorts are uninhabited islands developed solely as EMIRs (see Chapter 7) whereas these two hotels are on airport-islands. “Changing to a hotel from a guest house helps to promote the image of the establishment and aid in marketing with higher tariffs. because a hotel is viewed as to have a better quality than a guest house”(Interview. Hulhulé Island Hotel are not included in the official list of resorts even though they qualify as resorts in terms of definitions used by the Tourism Ministry (see Section 5.
1. especially in Malé Atoll during the first and second phases of EMIT. 2002). until they were banned (on 1 May 1984) by the government for social and cultural reasons (Niyaz. However. However. restaurants. the hotel and guest house sectors were believed to be outside the mainstream tourism supply (resorts and safari vessels) because their facilities are not used by the classical „holiday tourists‟8 as their main place of stay. souvenir shops and entertainments centres. fit to this category. 5. guest houses existed in some of the inhabited islands. In addition. a lack of land area in the capital island makes further new developments of hotels almost impossible. However. The most prominent are the diving bases. water-sports centres. in recent years there has been a growing recognition of the importance of the hotel and guest house sector to the total tourism industry of the Maldives (Interview. within each individual EMIR „other tourism supplies‟ are identifiable. there are tourist facilities (including hotels and guest houses discussed earlier) such as restaurants and souvenir shops in the capital island Male‟. it is estimated that over 98% of the international tourists in the Maldives. but rather used mostly as a transit stop for journeys from the airport to the resort or from resort to airport.In reflection of hotels and guest houses mainly being located in the capital Malé at present. For many years. Whilst the number of these facilities in the 8 Based on the interviews I conducted. and some inhabited islands. particularly those close to EMIRs. 2002:PER 27). 153 . and possibly to safeguard investments of the private sector on EMIRs (See Chapter 6).5 Other tourism supply The EMIRs dominates the tourism supply in the Maldives.
Wanhill. which is directly „welded‟ into EMIT is the transport sector. PER 10)? The government may have the legal authority to introduce various measures that may trim down the foreign ownership. How pitiable will that be” (Interview. of resorts. we (present local owners) will end up being „employed‟ by the foreigners.1. but may refrain from doing so. they are often 154 . 2002). unless the influential local private sector wish them to do so (Hall. a prominent local private sector principal observes that: “At this rate. whilst nearly 50% of the resorts have a share of foreign management (Appendix 5. 2000b. Whilst the true extent of the foreign ownership of tourism supply is unclear.6 Ownership of tourism supply Due to opaqueness in actual ownership of tourism supply. and or the management. On the seriousness of the increasing foreign ownership of tourism supply. such establishments in the capital Male‟ and other islands have increased drastically (Personal observation).14). These are discussed in Chapter 6 under the role of the government and the private sector. which has experienced a significant growth in a number of ways. The official standing indicates that out of the 87 EMIRs in operation over 25% has variable foreign ownership. it is difficult to proportion the ownership.resorts are more or less proportionate to the number of resorts. In the case of the Maldives the situation seems contradictory because even though many influential local owners are not supportive of the foreign ownership of tourism supply. many believe it could be as high as over 80% (Interviews. Another sector of tourism supply. 1998). 5.
3%. (c) generating markets. 2001. 155 . 1986 and 2001. with the disadvantages associated with their smallness (see Chapter 2). bed nights. 5. Hence it may remain „the necessary evil‟ for the development and management of EMIT. During these years the annual arrivals decreased by 0. Cockerell. Talk of patriotism and greed! Hence. As presented in the Figures 5. Tourism demand can be viewed from various perspectives. cannot live „with or without‟.8 and in Appendix 5. in the case of the Maldives the critical situation of high foreign ownership of tourism supply appears to have been created due to a policy that encourages foreign investments and the support of the local private sector.7.8 the number of tourist arrivals to the Maldives increased annually except in 1983. 2002). 5. 5.happy to get into joint ventures with them or to sell their investments to foreign companies who offer the „fatter‟ price even if a local company may propose a reasonably „fat‟ price (Interviews. Hence this section examines the tourism demand in terms of: (a) number of arrivals. this section focuses on the analysis of tourism demand. and (e) seasonality. and duration of stay. and each perspective may provide a different picture. (b) occupancy. It appears that foreign ownership has become something that the tourism industry of small island destinations such as the Maldives.2. (d) purpose of visit.1 Number of tourist arrivals The Maldives has been cited as a destination that has had a steady growth in tourist arrivals since 1972 (Domroes. 1995).2 Tourism Demand Having examined the tourism supply.
In 1988.000 compared with just over 1.3% respectively. PER 13).7). Middleton & Hawkins. it appears that the „growth rate‟ is declining (Figure 5. “This increase may have been from the new markets being tapped and new airlines commencing operations after the opening of the new resorts in Ari zone (third phase)” (Interview. 156 .0. 2002. the number of annual tourist arrivals has increased to over 155.000.8). 1996. The third phase also had a steady increase in the arrivals and by the end of this phase the figures has increased to over 365. During the second phase this figure increased tremendously. the number of annual tourist arrivals had increased to nearly 30. 2002. Butler. Many argue such a trend is typical of most destinations as they mature (Hovinen. 000. Conlin. Even though there has been an overall growth in the number of tourist arrivals. 1998. By the end of the first phase.000 tourists in 1972 (Figure 5. 1980).5% and 1.
it would seem that the phases 1. irrespective of the breaks in development of new resorts (Figure 5. Pizam & Smith.4). Sonmez et al.The steady growth continued through the better part of the fourth phase until 2001. there appears to be no marked change to the growth trend in the number of tourist arrivals. This is the most significant decline in tourist arrivals that the Maldives has experienced until to date. 2 and 3 have experienced a higher 157 . the total number of arrivals declined by 1. 1999). especially to Muslim destinations like the Maldives because of the September 11 terrorist atrocity in America (Goodrich. In 2001. However.3% over the previous year. This decline may have been a result of a combination of factors: (a) the year 1999 and 2000 were thought to be extraordinary years for tourism because of the new millennium (Bauer. Throughout the four phases. 2000. 1999). and (b) the year 2001 created an environment that have adversely affected the tourist arrivals. 2002.
2003).000 158 .9).2 Occupancy The bed occupancy percentage of a destination could be more meaningful than the number of tourist arrivals in determining the actual tourism demand because it gives an indication of the number of tourists in the country. This is another indication that the destination may be reaching maturation (Butler. The average national tourist occupancy of the Maldives has varied between 64% and 88% for the last 10 years (Ministry of Planning and National Development. 5. 1980).2.degree of annual fluctuations in tourist arrivals than phase 4. It appears that the steady increase of occupancy percentage peaked in 1997 and had a downturn and rapidly decreased to 65% within five years (Figure 5. Interestingly this was the period of the fourth phase of the resort development during which over 3.
5. In the early 1980s the average duration of stay was over 10 days. The reason for the duration of stay being longer can be attributed to many factors. Whilst there is a real concern 159 . it has comedown to just about 8 days (Figure. as a ratio of number of arrivals. For long haul destinations (from Europe). 5. but during the fourth phase.6).4).10).3 Average duration of stay as a measure of demand Tourist volume in terms of arrival figures could be misleading unless the duration of stay is considered (see Section 5.4) and on top of that over 1. Seemingly the obvious one is the distance of the destination from generating markets. the duration of stay is usually longer than short haul destination providing for higher bed nights.500 beds were added to the existing resorts (see Figure 5.2. which makes longer holidays more ideal than shorter holidays because of the transport costs and time factor involved.beds were developed in 14 new resorts (see Figure 5.2.
which is the highest of all the markets (Ministry of Planning and National Development. generating an average stay of approximately 10. The duration of stay has a direct relationship with the amount of tourists‟ expenditure (Ministry of Planning and National Development.5 days. The German market has an average duration of stay of 13 days. the Europeans follow holiday packages of 7 to 14 days. 1998).2.14). rather a global phenomena resulting from a factors such as changing life style and technological advances in communication and transport (Interviews. many of them believe that it is not an issue specific only to the Maldives. which is the product of number of tourist arrivals and their average duration of stay. 160 .amongst some resort owners of the Maldives over this issue.9 million bed nights.5 days (Ministry of Planning and National Development.4 Number of bed nights and their significance Another dimension of tourism demand can be analysed from the perspective of bed nights. 1998). As presented in Figure 5. Perhaps there is a need for the government and the private sector to be more concerned about the decline in the German market particularly since 1999 (see Figure 5. 1998). the tourist bed nights has shown a steady increase during the late 1990s. 2002). whereas Asians stay for 4-7 days resulting in an average stay of approximately 5. In the Maldives.11. 5. because in terms of bed nights the decline is quite significant. but has rather evened out from 2000 to 2001 at about 3.
society and economy. In 2001 there were over 29. based on the 2000 census data (Ministry of Planning and National Development. Even though expatriates are not considered as tourists (because they are in employment in the Maldives). 161 . More than 10.5 million. The tourists and expatriates (who use tourist facilities as well as those who do not) have the potential to impact the destination‟s environment.5 million. 2002). These figures give an important perspective on the relational volume of tourists. international tourists accounted for 4%. and the locals account for 87%. expatriate and locals. This reflects on the complexity of definitions discussed in Chapter 2. 2003).000 of them are in direct tourism related jobs (Ministry of Planning and National Development. This means when the bed nights of these three sectors are combined. a significant number of them use tourist facilities. Hence bed nights of expatriates amounts to over 10. quantifies to 98.000 foreigners working in the Maldives. expatriates account for 9%.A calculation of the bed nights of the local population.
2.12 to 5. in terms of bed nights. during the second phase the German market had taken over the lead. with 22%.5 Tourist generating markets The main tourist generating markets to the Maldives are from Europe.14. 162 .9 to 5.11). not forever though.5.12). while Italy holds the first position (30%) and the United Kingdom in the third position with 21% of the bed nights. which constitute over 70% of its total tourist arrivals (Figure 5. During the late 1990s. However. Germany still ranks number 2. Appendices 5. Even though in the early years the Italians were leading the market. a drastic decrease in the growth rate of German market and a significant increase in the growth rate of both the Italian and the British markets resulted in the German market being relegated to the third position in terms of the number of tourist arrivals (Figures 5.
In the case of the Maldives. particularly on the ownership of tourism supply by the private sector of the respective generating market. A more detailed examination of the generating markets for the period 1992 to 2001 indicates that the leading four markets have had a steady increase of tourist arrivals from 1992 to 1999 (Figure 5. A detailed breakdown of the share of arrivals from individual countries is given in Appendix 5.9.11).14). in the year 2000 the German market registered a negative growth.13). whilst during the same period the other three destinations‟ positive growth trend continued (Figure 5.It appears that most of these markets have had a steady growth in terms of number of arrivals even though some markets such as France and India have registered negative growths in the early 1990s. However. while the German market appears to have significantly declined since 1997 (Figures 5. 163 .14 and Appendix 5. the share of the market is also a reflection of the direction that the tourism is heading. which continued through the year 2001.
However.12). This is an indication of the influence that foreign tour operators have on their native markets. 2002: PER 13). namely. 1989). 164 . Of course this does not mean that the push factors and pull factors have a significant influence on the markets‟ motivation to travel and choice of destination (Pearce. one of the reasons why the German market is having a lower growth rate can be attributed to the economic downturn in the Germany since early 1990s. the arrivals from that country usually increases” (Interview. it is interesting that one of the destinations in the Indian Ocean that has certain similar characteristics to the Maldives. For example. which would further suggest that there may be more reasons than the economic downturn of the generating market. Mauritius experienced a healthy growth in the German market for the period 1992 to 2001 (Appendix 5. that influences the demand.“When tour operators or hoteliers from a particular country is involved as owners.
11. 2002: PER 45). in the year 1981 the Indian market constituted over 20% of the total arrivals to the Maldives. As can be seen from Figure 5. These two factors have the potential to greatly affect the demand (Prideaux. As such. In their quest to broaden the market base. 2003). yet by 2001 it has come down to just 2%. in the late 1980s and early 1990s” (Interview. 1998). 2002: PER 13). Even though this is good news in terms of market diversification. 165 . rather the market from other nations grew at a much rapid pace than the Indian market. the relatively new market of Japan turned out to be one of the most stable and promising markets (Interview. which has a high potential because of its huge volume and its close proximity to the destination. However. As presented in Figure 5. This 18% decrease over a period of 20 years was not because that the actual number of arrivals form India declined. An alternative view is that: “Indian market failed to grow in parallel proportion to other markets because not enough attention was given to that market earlier. the growth rate of the Indian market has gradually declined over the years. the Japanese market has had a steady growth and the growth trend is expected to continue.Another market that is of relative significance to the Maldives is the Indian market. the Maldives has also found new markets. irrespective of these facts and also the increase in connectivity between the two countries.13 and Appendix 5. one of the drawbacks of the Japanese market is that their duration of stay is much shorter than that of the leading European markets (Ministry of Planning and National Development.13.
The market for Meetings Incentives Conferences and Exhibitions (MICE) is also increasing and is expected to grow considerably in the future” (Interview. The situation does not enlighten in holiday destinations like the Maldives. and honeymoon. 1998). business and professional. These may give a broader picture of the purpose of the visit but may shed very little light on the actual areas of real demand for destinations. there is a tendency to classify tourists under broader purposes of visit such as leisure. There are other classifications too.2. 166 . it appears that the main reasons why tourists come to the Maldives are for: scuba diving. and an ideal destination for total relaxation (Lyon. 2002: PER 54). “The Maldives is now more than just a holiday destination. The Maldives is popular with sea sun and sand lovers. „doing nothing‟ or „getting away from it all‟. Even though no tourists were interviewed for this study. For example even those who visit the Maldives for the „purpose of getting away from it all‟ and „doing nothing‟ may end up doing a number of things such as sun tanning. 2000). and health treatment (Theobald.5. where the majority of tourists may choose to indicate „holiday‟ as their purpose of visit on the disembarkation cards they are required to complete. water-sports. recreation and holidays. excursions. or even getting involved in entertainment programmes such as karaoke or dancing. from the observation of tourist activities and the interviews conducted with the industry principals. swimming. Hence.6 Market segments by the purpose of visit One of the problems of classifying tourists by their purpose of visit is that very rarely would a tourist‟s activity be limited to only „one‟ of the „many‟ that a present-day tourist resort can offer.
Thirty years on. 2000. Firag. snorkelling. Wapshott. the archipelago forms an ecosystem that hosts an exceptional marine community. 1992. 1999). from hard coral to fantastically patterned nudibranches. It is believed that the Maldives has become one the most sought after diving destinations in the world. Each resort also has a water-sports centre. 2002. because almost all the Maldivian tourism brochures (and websites) of today give a strong emphasis on diving and other water sports such as windsurfing. “With crystal-clear waters. 2000. Each resort has a scuba diving centre (commonly known as a „diving school‟) that is often independent of the resort and operated by a foreign company (Interviews. texts. The very first brochure on the Maldives featured scuba diving and snorkelling as major attractions (Interview. The concern is that the marine environment is fragile and threatened by global warming and also open to 167 . etc. Once the „business‟ is over they get involved in the usual tourist activities (Interviews.Such „business‟ visitors are also usually on a „business holiday‟ as well. Even the odd killer whale or two. online) Many magazines. 2002). 2002: PER 10). Its beaches are an important nesting site for five of the world's seven species of green sea turtles” (Cheng. It is not because its name „Maldives‟ has the word „dives‟ in it. 2000). Dolphins and manta rays regularly patrol its waters. it has not changed at all. guidebooks and television documentaries in Europe also have had a similar outlook projected about the underwater beauty of the Maldives (Amin & Willets. Lyon. 2000. Hence it would be a complex task to categorise tourists according to their purpose of visit. parasailing. Cockerell. Ellis. 1995. which may also be owned and managed by the company that runs the resort‟s diving centre. rather because of its commendable underwater beauty.
safety and serenity (Ministry of Tourism. 2002). in recognition of the demand from this market segment. Paradoxically un-Islamic marriages are not allowed in the Maldives. 2002. 2000b). 2000. For example in 1998 the president of the Maldives inscribed the importance of finding ways to show the rich Maldivian culture and traditions to the tourists and enrich the tourism product portfolio beyond the traditional product of Maldivian natural beauty of sea. see also Chapter 4). However. Yet to date there is no system to register non-Islamic marriages in the Maldives. It appears that both the government and the private sector realises the importance of diversifying into various niche market segments. It may be hard to envisage why tourists (none Muslims) cannot have a traditional marriage in the Maldives.other environmental catastrophe that some small destinations such as the Maldives have no control over (Barkham. “Honeymooners and divers are a strange social mix. sun and sand and its political stability. Stone. p. This may have been a result of more tour operators actively starting to promote the Maldives for honeymooners (Travel Trade Gazette UK and Ireland. some resorts have started providing ceremonial marriages (Interviews. 2002). 28). what is noticeable is that each resort caters for more than one market segment. Irrespective of a focus of individual resorts on a particular market segment. but they seem to rub along both more preoccupied with each other than making friends” (Wapshott. Almost five years on after that. 1992. one has yet to see a significant linkage of tourism to Maldivian culture and traditions because of the EMIT. This does not mean that tourists never get a taste of Maldivian culture and 168 . More recently a notable number of tourists have started to visit the Maldives for honeymoon. today.
As presented in Chart 5. the Maldivian tourism product simply does not have a significant cultural component built into it. one should be aware that 70% of the arrivals to the Maldives are from Europe. Such a pattern has led to operators classifying the tourist year in the Maldives into low season.7 Seasonality variations in tourist arrivals The management of tourism also can be prone to the problems associated with fluctuations in demand. influential religious groups such as Islamic fundamentalists.2. and the government sees the importance of such links. rather the day when people will travel to the Maldives for its culture and traditions still seems far fetched. as other businesses. On the other hand. The tourist expenditure is relatively low during the low season in 169 . There are possibly three reasons for this. There is bound to be difficulties in linking tourism to Maldivian culture and traditions unless the private sector.15. The primary ramification of this is on the tourism revenue to the private sector. which depends on the tourist expenditure. First. none of the promotional and marketing initiations has focused on that. high season and peak season. who apparently prefers to travel to tropical destination during the winter (Pearce. 5. For a destination like Maldives. where there are no characteristic notable changes in the classical geographical seasons. and finally government is being cautious in how they link the „tropical holiday life style of the Europeans‟ characterised by behaviour that are alien to the Maldivian way of life and its Islamic values (Interviews. 2002).traditions during their stay. there is a clearly identifiable pattern of seasonality variation in tourist arrivals to the Maldives. second. 1989). it is hard to imagine that there could be a huge seasonality imbalance in tourist arrivals.
The Low season is from mid April to mid July and is characterised by a huge decrease in the prices. The high season is from mid January to mid April and also from mid July to mid December (Figure 5.comparison with the high season (Ministry of Planning and National Development. 170 .15). This is not only because the volume of tourists is low but also their average expenditure is notably low as well. especially in terms of physical capacity may be subjected to some limitations especially on a short-term basis. possibly due to the economic status of the tourists who choose the „low season‟ as the time to travel. Because of the nature of EMIT „increasing‟ the quantity supplied. 1998). 2002). Seasonal variations are one of the main factors that may hinder smooth capacity and yield management for EMIRs. The irony is that the owners of the resorts want to have (if possible) a „big enough capacity‟ that would enable the acceptance of all the reservation requests that may come during the high season whilst at the same time expect such capacity to be completely full during the low season (Interviews.
One of the key questions that need to be asked. even at the expense of the welfare of the staff (Interview. 171 . appears not to be fully functioning in the Maldivian tourism industry. had the prices not been lowered during the low season. marketing initiatives are being targeted to other generating markets whose travel patters may be different from that of the mainstream European markets” (Interview. but mainly because they often have to leave their accommodation and move to temporary „camp-like‟ accommodation (Personal observations). 2002: PER 56). For the executive and senior staff that works in the resorts of the Maldives. the peak season may not be a period they look forward to. This is not only because they have a heavier and a busier workload. This is because some managements opt to stretch the resort‟s physical capacity to their extreme limits and beyond. during which almost all the capacity in the Maldives are usually fully utilised. The peak season is from mid December to mid January. PER 18). the demand would have been even much lower than what it has been in the past. whether the Maldives can generate the same number of tourists during the „low season‟ even without reducing the price stigmatic of „low season‟. There is a possibility for this to be the case because introduction of „low prices‟ for the „low season‟ has not increased demand in the past (Figure 5.15). The danger is that this could have a domino effect on the tourist and eventually on the Maldivian tourism industry. Of course one may argue that.What is interesting is the basic theoretical law of economics. for the last 30 years. where the demand is supposed to increase with a decrease in price. 2002. “In order to balance the seasonality fluctuations in arrivals (to the Maldives). and for which as of yet there is no satisfactory answer is that.
However. However. 69). However. It seems that the Maldives is gradually being steered away by the private sector from its traditional low impact high yield tourism towards high impact low yield tourism. It is evident that both supply and demand have increased rapidly since 1972. product typology and market diversification” (Interview. competition have forced Maldives to a situation of 172 . this increase has not always been in equal proportion to one another. their impacts are yet to be felt as can be seen from the significant variations shown in Figure 5.3 Chapter conclusions This chapter has examined tourism supply and demand in the Maldives. 5. many in both the government and the private sector believe that the days of maintaining such an image are numbered. This is contrary to the claim by the Ministry of Tourism that in the 1990s “…the trend of „low season‟ of early years became almost none [sic] existent” (Niyaz.15. especially in terms of geographical expansion. There is a feeling among many industry principals that the „global market forces‟ and unregulated. 2002). 2002: PER 21). As one of the pioneers of the tourism in the Maldives suggests: “The time has come to seriously reflect on the direction that the tourism industry is taking. Both the government and the private sector claim that they would like to maintain the premium image (Interviews. 2002. p. possibly unregulatable. In the recent years the increase in tourism supply appears to have surpassed that of tourism demand. This appears to be a result of desperate attempts to increase the demand to meet the increased supply. if not already bygone.
An important juncture and a question to ponder. an increase beyond a certain threshold could mean the exposure to a number of social and environmental problems as a result of a potential scenario of UMT (Weaver. which could be counter productive in the long term in terms of optimum benefits to the nation. 173 . but without a straightforward answer. This is because a decline beyond a particular limit would mean that its economy and social infrastructure would collapse. On the other hand.„mass tourism‟. 2000). However. When both extremes are thought to be disastrous to the nation. the „theoretical solution‟ appears to be determining the optimum capacity and maintaining an appropriate volume for that particular capacity threshold. this may not be a practicable solution in the view of the desire by both the government and the private sector to increase tourism supply irrespective of what may be happening to the demand. is that if an increase in tourist volume may bring a destination eventually to its knees because of lost „exclusive appeal‟. why should one be concerned about a potential decrease in tourist volume? In this regard the Maldives (as a nation) ought to be concerned about both a decrease as well as an increase in tourist volume.
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