Where Have All the Tourists Gone?
The Chinese visit the Maldives in much lesser numbers these days, which is a cause for concern. The country is coming to grips with the problem but it needs to do much more.
The Maldives, a tourism-driven country, offers its tourists and international visitors hotels, guest houses, safari vessels and resorts. As per the 2014 statistics issued by the Maldives Ministry of Tourism, the number of tourism facilities has exponentially increased in the country over the last few years.
As of 2014, according to the ministry, there were some 511 registered accommodation outlets with a total bed capacity of over 31,500. This was a significant increase from 14 per cent in 2013 to 19 per cent rise in 2014. A positive development in a tourismdependent economy, the leading factor behind the rise was the internationalstandard resorts and guest houses which are being added every year to the tourism infrastructure.
Built under the ‘one-island-one-resort’ concept, a resort in the Maldives is referred to as a ‘resort island’ and tends to be quite a popular tourist accommodation because of its friendly environs, gourmet cuisine and other modern features. In 2014, according to the Ministry of Tourism, there were some 111 resort islands in the archipelago with more than 23,500 registered beds. Kandholhu Island and Loama Resort are the two new resorts while the Soneva Jani Resorts, the latest addition to the high-end resort sector of the country, will start its operation in January 2017.
Derived from a Sanskrit word
meaning ‘wisdom,’ Soneva Jani consists of five islands and is a collection of 33 island sanctuaries and 26 water villas with one and two bedrooms. A five star resort, Soneva Jani is well-equipped with state-of-the-art facilities and salient features, such as a cinema, health spa, an infinity pool, a waterslide from the upper floor into the sea, clubhouse, a beach restaurant, a retractable electric roof for horizontal stargazers and a diving school and water sports centre.
Located in the Noonu Atoll, an administrative division of the Maldives, the resort is surrounded by a 5.6 kilometre lagoon and is 40 minutes away from Male International Airport by seaplane or a one-hour speedboat drive from Soneva Fushi, another luxury family resort located in the Baa Atoll that is the World Biosphere Reserve of UNESCO.
Being hailed as a symbol of high-end island living in the Maldives, the Soneva Jani had its soft opening in October last year. Currently, hundreds of people are working day and night to complete the project. However, there is bad news for the Maldivian tourism industry in general and for the Soneva Resorts in particular.
According to statistics of the Maldives Monetary Authority (MMA) and the World Bank, Maldives experienced less than 2 per cent economic growth in 2015 because of “lower tourism sector growth due to lower arrivals from China and Russia.” In the recent economic history of the Maldives, this happens to be the first occasion when the country has suffered from an economic downturn since the international financial crisis of 2008-09.
“As of August 2016, Chinese arrivals have fallen by -11.5 percent. Some 260,491 Chinese tourists visited the Maldives from January to August, down from 230,437 in 2015. However, Chinese tourists still represent a market share of 27.3 percent,” says Ahmed Naish, a Maldivian travel and tourism journalist.
According to him, after growing exponentially from 2010 onwards to capture a market share of 30 percent, Chinese arrivals peaked in 2014 with about 364,000 visitors and declined for the first time in 2015 by -1.1 percent.”
The main reason behind the decline pertains to a 30-day state of emergency that was declared by the Maldivian government in November, 2015. As expected, the move, which led to a significant decrease in the total number of foreign tourists, was detrimental for the country’s tourism sector.
In terms of tourist arrivals, says Ahmed Naish, “After China, the United Kingdom has the highest market share with 8.1 per cent, followed by Germany (7.9 per cent), Italy (5.7 percent), India (4.6 per cent), Russia (3.4 per cent), and France (3.3 per cent). However, arrivals from France fell by -5.7 per cent and growth from Russia flattened at 0.6 per cent. Arrivals from Russia and France registered significant declines in 2015, falling 33.2 per cent and 17 per cent respectively,”
Moosa Zameer is the Minister of Tourism in the Maldives. He says the country missed the target of 1.5 million tourist arrivals in 2016, while the revised forecast is 1.4 million, which happens to be the same target that was missed in 2015.
In Sri Lanka, Chinese tourists have grown by 70 per cent (from 128,000 to 270,000). In Mauritius, Chinese visitors have increased by 41 per cent (from about 60,000 to 90,000). In Bali, Indonesia, the number of visitors from China increased to 17 per cent (from 586,000 to 688,000), but the total number of Chinese tourists travelling the Maldives have reduced from 364,000 to 359,000 between 2014 and 2015, says Mifzal Ahmed, Director of Strategy and Development, MEGA Global Air Services, Maldives.
The decline trend may lead to a misdiagnosis of the problem, says Mifzal Ahmed.
He says, “The decline implies that if the domestic economies of these countries recover, then so will tourist numbers to the Maldives. While this may be true of Russia, what is going on in China is certainly not that straightforward. However, there is relatively little we in the Maldives can do to address this decline.”
On an average, one in three international visitors to the Maldives is from China. However, after the emergency declaration in November 2015, the number of Chinese visitors dropped by one fifth over a brief 3-month period. In the first half of 2016, the drop was the steepest for years, which, as a result, negatively affected the revenues of Soneva Fushi, which is the Soneva Jani’s neighbouring resort owned by the Soneva Group, the international resort brand.
For the first time in its two-decade history, the Group has sustained losses because of the decreasing international arrivals in the Maldives, thus putting both of its existing projects and future investments at risk.