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CHAPTER IV

GROWTH AND DEVELOPMENT OF TOURISM IN MALDIVES

Tourism as the largest sector of the economy in the Maldives, as it plays

an important role in earning foreign exchange revenues and generating

employment in the tertiary sector of the country. This chapter gives a

detailed account of the development of tourism industry; initiatives taken

by the Maldivian government to promote tourism in the country were

studied.

The Maldives has a population of 298,968 (in 2006) spread among 196

islands. Strong disparities are evident in the population distribution

between the islands: Male, the capital island, has a population of 102,377,

or nearly one-third of the total population, whereas there are 142 islands

with fewer than 1000 inhabitants and 76 islands with fewer than 500

persons only three islands have a population greater than 5000. Hence,

most of the inhabited islands are sparsely populated while a small number

of islands are heavily congested. The growth of Male‟ is a result of

migration from the other islands as people seek better job and educational

opportunities, and an improved quality of life. However, this migration

has resulted in inequalities both economic and social terms between

Male‟ and the other atolls. Youth unemployment, increasing crime rate,

social disharmony and drug abuse are all outcomes of the highly

congested living conditions prevalent in Male‟ and some other islands.

The Maldivian age structure is very young with approximately 77% of

the population below the age of 40 years.

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4.1 LIFE CYCLE OF TOURISM

According to Butler (2006), tourist areas change steadily (figure4.1):

“The rates of growth and change may vary widely, but the final result will

be the same in almost all the cases.

Seven stages are depicted on the model. The first is the exploration stage,

when tourist numbers are small, visitation patterns irregular, and tourists

make individual travel arrangements to destinations where no special

facilities or services are provided for tourists. Contact with residents will

be high, contributing to enhanced attractiveness and more tourist visits.

Second is the involvement stage. Locals get involved in providing

services and facilities to tourists who by now have formed a regular

pattern of arrival. Promotions and marketing to attract more tourists are

carried out. A market and a tourist season are established and start to

take shape.

The hypothetical evolution of a tourist area

Source: Butler -2006

Source: Butler 2006

A

B

C

D E

Rejuvenation

Critical Range of

Elements of Capacity Stagnation

Exploration

Involvement

Decline Consolidation

Time

Nu

mb

er o

f T

ou

rist

s

94

Third is the development stage, marked with a well-defined tourist

market due to the advertising in tourism-generating countries. Larger,

more modern facilities developed by foreign companies replace the basic

facilities that have been offered until now.

Natural and cultural attractions are built and promoted, making obvious

changes to the physical environment. Tourist arrivals may equal or

exceed local populations. As this stage progresses, expatriate labour will

have a strong hold on the destination‟s labour force.

Consolidation happens during the fourth stage. Tourism constitutes a

significant part of the economy but, starting from now, the number of

visitors will begin to decline. Stagnation is the fifth stage: tourist arrival

numbers have peaked and while the destination may have an established

image, it will be out-dated. Strong advertising will be required to fill the

over-capacity that has been created. The built environment does not

complement the natural environment.

The sixth stage is one of decline: the destination is not able to compete

with new competitors, and hence there is a decline in visitor numbers.

Many tourist facilities may convert to other facilities, such as permanent

tourist homes or function facilities.

At the seventh stage, rejuvenation may occur. This may happen by

adding man-made attractions or venturing into a new direction.

With regard to the stages that tourist destinations go through in the life

cycle, Butler (2006) cautioned.

The assumption that tourist areas will always remain tourist areas and be

attractive to tourists appears to be implicit in tourism planning. Public

and private agencies alike, rarely, if ever, refer to the anticipated life

95

span of a tourist area or its attractions. Rather, because tourism has

shown an, as yet, unlimited potential for growth, despite economic

recessions, it is taken for granted that numbers of visitors will continue to

increase. The fallacy of this assumption can be seen in the experience of

older tourist areas, such as those of southern Ontario, over the past

two decades.

4.2 SMALL ISLAND DEVELOPING STATES (SIDS) AND

GLOBALIZATION

Many SIDS have demonstrated continued economic and social

development during the last thirty years, proving that small size does not

hinder sustained growth (Read, 2004). However, Read predicts that the

globalization process will make future growth more challenging for

SIDS: “Globalization represents a particularly significant threat to the

continued survival of many successful small island states as independent

entities given the greater susceptibility of their economies in the

international system”.

Tourism has particular significance for SIDS. The environmental and

cultural features with which they are endowed make SIDS primary

locations for tourism development (Giannoni & Maupertius, 2007).

Remoteness, a frequent feature of SIDS, is an advantage for tourism

because relative isolation can render the destination “more attractive,

exotic and enticing, especially in the case of small islands” (Scheyvens &

Momsen, 2008).

Hence, it is not surprising that in most SIDS tourism is the main

economic activity (Neto, 2003), bringing in most of their foreign currency

earnings (Ashe, 2005), in addition to being the largest source of

employment generation (Scheyvens & Momsen, 2008). However, in

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spite of these positive outcomes, the global tourism industry is also

believed to have negative impacts on SIDS. As Rosalie (2002) stated,

“Tourism in the developing world has both the potential to be an agent of

social and economic development ... or a source for friction and

alienation within the local community.”

A lack of resources often makes the natural environmental assets the only

means for economic development for SIDS (Ashe, 2005). But tourism

development in SIDS has a significant impact on the environment. When

tourism development is dependent on fragile ecosystems it causes

immense pressures on these resources (Neto, 2003). The extent of the

impact can be understood when the small land area and population of

most SIDS is weighed against annual tourist arrivals per year, which

often exceeds several times that of the total population (Scheyvens &

Momsen, 2008). In addition, SIDS are among the countries that are most

vulnerable to the threats of climate change such as rising sea levels,

saltwater intrusion, extremities in weather, loss of biodiversity and

damage to ecosystems (Quarless, 2007). Unfortunately, due to

limitations in human and financial capabilities, these countries are less

capable of protecting their natural heritage than their larger counterparts

(Rosalie, 2002).

4.3 TOURIST ARRIVAL TRENDS

Over the past few decades the Maldivian economy has become dependent

on the tourism industry. In 2011, the tourism sector accounted for nearly

34% of direct Gross Domestic Product (GDP) and almost 75% when

counting both direct and indirect. The disparity between direct and

indirect GDP illustrates that tourism is a cross-sectorial industry.

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Tourism serves as a link and stimulus to almost all other sectors of the

economy such as transport, construction, trade, and financial services.

The country‟s economic wellbeing has relied on the success of the

industry. When compared to other island nations of its size, the growth

trajectory of Maldives tourism has been a clear success story. When

tourism officially began in 1972 only 1,000 tourists arrived that year. By

2011, that number had grown to 930,000. By the end 2012, arrivals are

expected to exceed 1 million. Since its inclusion in international tourism

statistics, Maldives‟ share of tourists from around the world has grown

steadily from 0.02 percent in 1981 to 0.07 percent in 2009, an average 4.4

percent increase per year. Historically, Europeans have represented the

largest share of incoming arrivals to the country. This pattern is now

challenged by the increased growth of Chinese tourism. The

opportunities and challenges of this shift require thoughtful direction and

policy development.

Tourist arrivals to the Maldives have been increasing steadily at an

average of 10% per annum over the last ten years, except for the dramatic

decline in arrivals during the year 2005 due to the Asian tsunami

(December 2004) as presented in (table & Figure No. 4.1). The tsunami

caused the closure of a number of resorts and tourist arrivals declined by -

35.9% in 2005. The Maldives sustained significant economic losses from

the tsunami due to the economy‟s heavy reliance on tourism. However,

Maldives‟ tourism has shown remarkable recovery after the tsunami in

2006 the annual growth rate in tourist arrivals rose to 52.3%, with nearly

779651 visitors. The annual average occupancy rate has been 68.2%

from 2001 to 2010.

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A multitude of factors have contributed to the dramatic growth in the

Maldives tourism throughout the last 40 years. The Maldivian

Government outlined its approach to standardize tourism development in

the first tourism master plan drafted in 1982. Subsequent tourism master

plans have provided the industry with direction and focus as the country‟s

economy moved along to the distinction of middle-income country status

in 2011.

Considered a long-haul destination, the growth experienced by the

Maldives has not occurred without issues and impacts on the general

population. The inherent volatility of an economy primarily dependent

on tourism revenue compounds the effect of any decrease in tourist

arrivals. Since 2000, there have been two noticeable downturns. The

tsunami of 2004 and global financial crisis (GFC) of 2008 created a lag

effect in tourism for 2009. These have been the only significant

downturns experienced by the Maldives tourism industry since its

inception.

Table: 4.1 Tourist arrival: Annual growth rate (2000-2010)

Year Annual growth rate in (%)

2000-2001 -0.73

2001-2001 4.51

2002-2003 16.25

2003-2004 9.42

2004-2005 -35.89

2005-2006 52.26

2006-2007 12.28

2007-2008 1.05

2008-2009 -3.97

2009-2010 18.87

Source: Ministry of tourism

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Figure: 4.1

4.4 CURRENT GLOBAL TRENDS

Despite weak economic development in the western world over the past

four years, international tourism has continued to grow, fuelled by the

strong growth from China and other source countries whose economies

have fared well. In 2009, international tourist arrivals and international

tourism receipts fell between 4 and 5% over 2008 reaching 883million

arrivals and US$853billion respectively. Both 2010 and 2011, however,

saw good rates of growth (table 4.2) with arrivals rising by 6.6% and

5.0% in these years; and receipts in constant terms growing by 12.5% and

3% to exceed US$1trillion for the first time.

Table 4.2 International Tourist Arrivals and Receipts, (2009-2011)

Arrivals

2009 2010 2011

Millions % Change

over previous year

883 943 990

-4.2 +6.6 +5.0

Receipts %real change over

previous year

-4.7 12.5 3.0

Source UNWTO September 2012 Tourism Barometer

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4.5 RECEIVING AND GENERATING REGION

Europe remains both the largest receiving and generating region for

international tourism. The pattern is similar for both inbound and

generated arrivals since the bulk of international tourism takes place

within the region of the traveler. Hence Europe recorded 504 million

arrivals in 2011 while generating 517 million arrivals in other countries.

Countries in the Asia and Pacific region received 217 million arrivals

while generating almost the same volume of 215 million in other

countries.

Europe accounted for 53% (table.4.3) of all international tourist arrivals

in 2011 but this represents a fall of 5% over 2000. By contrast, countries

in the Asia and Pacific region increased their share of international tourist

arrivals over this period from 17% to 22%. The growth in international

tourist arrivals (Figure 4.2) generated by the different regions between

2005 and 2011shows that travelers from (map 4.1) the Middle East are

leading the way with an average annual rate of 8.1%, followed by Africa

at 7.2%, Asia and the Pacific at 5.9%, with the established generating

regions of the Americas at 2.9% and Europe at 1.9% lagging behind.

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Table 4.3 Regions as Recevires and Generators of International Tourism,

2011

Arrivals Received Arrivals Generated

mn % share %p.a growth,

2005-11

mn % share % p.a growth

2005-11

Europe 504 51 2.3 517 53 1.9

Asia/Pacific 217 22 5.9 215 22 5.9

Americas 157 16 2.7 162 17 2.9

M East 55 6 7.3 36 4 8.1

Africa 50 5 6.3 29 3 7.2

Not

specified

- - - 24 2 4.5

Total 983 100 3.5 983 100 3.5

Source: UNWTO

Map. 4.1 International tourist arrivals to Maldives

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Figure: 4.2:

Out of the leading arrivals, (Figure4.3) Italy ranked first with a share of

69.6% of the European market. The UK was the second largest (19.8%),

followed by Germany (11.8%) then France (7.2%). Switzerland, Russia,

and Austria all had much smaller shares (4.4%, 3.6%, and 2.3%

respectively). From Asia, Japan was the largest contributor with 6.6% of

market share, followed by China (4.4%). The market share of Africa was

0.7%, while the countries from the region of the Americas contributed

1.8% and from Oceania only 1.3%. The top ten markets for Maldives in

2006 are Italy (25%), United Kingdom (22%), Germany (15%), France

(9%), Japan (8%), China (5%), Switzerland (5%), Russia (5%), Korea

(3%), and Austria (3%).

Figure: 4.3

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4.6 COMPETITORS TO MALDIVES

It is clear that the appeal of its fundamental attraction of pristine tropical,

beach, and reef-surrounded islands offering relaxation, excellent marine

life, and water-based activities in high quality resorts remains very strong,

factors in attracting the tourists to Maldives.

The strength of demand for beach-based holidays in general and the style

of beach holiday offered in Maldives in particular is borne out by the

growth rates recorded in international tourist arrivals over the past two

years in other beach holiday destinations. Only the Caribbean islands are

growing below the rate of overall international tourism, reflecting the

apprehension felt by US travelers to the sustained period of slowing

economic growth.

The five destinations as identified in table 4.4 (Figure 4.4)shows the 2011

Maldives Visitor Survey as representing the main competition to

Maldives – Seychelles, Thailand, Mauritius, Indonesia, Fiji – each grew

at rates above the global average of 11% in the two year period 2009 –

2011, 2011. Only Thailand matched Maldives‟ aggregate 42% rise over

the two-year period 2009-2011. Within Thailand, the mass-market resort

area of Phuket recorded a 30% rise in international air arrivals in 2011

reaching a total of 2.2million; while Koh Samui which is adopting a

strategy of moving up market received 14% more international arrivals in

2011 exceeding a total of 800,000.

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Table 4.4 Competitors to Maldives

Destination % growth

2009/2010

% growth

2010/2011

Arrivals 2011

(„000)

Maldives 20.7 17.6 931

Seychelles 10.8 11.4 194

Mauritius 7.3 3.2 963

Thailand 12.6 19.8 19,230

Indonesia 9.2 10.7 7,650

-of which Bali 11.8 10.6 2,757

Fiji 16.5 6.8 675

Caribbean 2.2 4.4 20,903

World 5.0 6.6 990,200

Source: UNWTO

Figure 4.4

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4.7 GLOBAL COMPARISON-2005-2011

As a long haul destination from almost all its existing and potential major

markets (India being the exception), Maldives is sensitive to any

economic, political, natural and social disturbance that forces tourists to

look closer to home for their destinations or to forego travel. The pattern

of development of international tourist arrivals to Maldives reflects strong

growth in years when all things are normal in the international

marketplace (table 4.5 and Figure 4.5) with downturns (or at least stunted

growth) in response to negative events i.e. the tsunami‟s impact on its

performance in 2005, the percentage of change is 5.5% at the global and -

35.9% in Mad ivies. The spread of H1N1 in 2009 and the recent year‟s

global economic downturn, including the rise of oil prices has negative

impact on tourism at both global level and on Maldives with a fall of -

3.8% and 4% respectively. However, even when tourist arrivals decline,

the fall is not as great as experienced worldwide – with the exception of

the Asia region-specific consequence of the tsunami - and the bounce

back is generally much stronger than in most other parts of the globe.

The financial crisis that started in 2008 hit all destinations in the second

half of that year while the ongoing economic problems, especially in

Europe, are serving to keep international tourism growth (including to

Maldives) at a moderate level.

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Table: 4.5 Global comparisons -2005-2011

Year Global arrivals Maldives arrivals

mn % Change on

previous year

„000 % Change on previous year

2005 805 5.5 395 -35.9

2006 850 5.6 602 52.4

2007 904 6.4 676 12.3

2008 919 1.8 683 1.1

2009 885 -3.8 656 -4.0

2010 943 6.6 792 20.7

2011 990 6.6 792 20.7

2012 990 5.0 931 17.6

Source UNWTO AND Ministry of tourism art and culture

Figure 4.5

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4.8 TOURIST ARRIVALS BY GENDER

In 2011out of 791,917 tourists visited to Maldives, 393,207 male and

398,710 female visitors. Number of females visiting the Maldives is

slightly higher than males in all months of 2011 except June and

September which is slightly over edge. (Figure5.6)

Table:4. 6: Tourist arrivals by Gendar 2010

Months Male Female

Jan 33653 33825

Feb 37715 39348

Mar 36998 37977

Apr 30148 30594

May 29095 29229

Jun 22129 21921

Jul 28364 28868

Aug 32537 33778

Sep 31391 31133

Oct 37288 37419

Nov 36394 37318

Dec 36955 37300

Figure 4. 6:

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4.9 TOURIST ARRIVALS BY AGE GROUP

In terms of age groups of tourists who visited the Maldives during the

year 2011, 45% belonged to the age group of 45 to 64 years and 41%

were the economically active population between the ages of 25 to 44

years. Youngsters, between ages 15 to 24 and children both contributed a

total of 8% of the tourists who visited the Maldives during the year 2011

with 4% each. Percentage contribution of retired people (65 years of age

and above) was 6%.

Table 4.7 Tourist Arrivals by Age Group

Category Age Group Tourist Arrivals

Children 0-14 4%

Youngsters 15 -24 4%

Economically Active 25 -44 41%

Middle Aged 45 -64 45%

Retired above -65 6%

Figure 4.7:

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4.10 GROWTH OF ARRIVAL AND MARKET SHARE

At the end of 2011, with a market share of over 60%, Europe remained as

the leading market generator to the Maldives. This region recorded a

growth of 9.4% compared (table & Figure-4.8) with 2010 with a total of

505,421 tourist arrivals to the Maldives in 2011. Asia and the Pacific

region recorded the highest growth in arrivals with 52.9% compared to

2010. This region captured arrivals to Maldives in 2010. A considerable

market share of 52.9% with 250,638 tourists with a total of 18,601

tourists, Americas captured a market share of 2.3% in 2011. The region

was recorded to have a positive growth of 22.7% at the end of 2011

compared with2010. Brazil, Canada, and U.S.A from this region

registered positive growths of 35%, 25.4%and 21.7% respectively. The

U.S.A capturing a market share of 1.4% is considered as an emerging

market and one with potential to the Maldives. Middle East region is

captured a market share of 1.5% and registered a positive growth

of22.1% compared to a growth of 4.2% at the end of 2010. Arrivals from

Saudi Arabia and United Arab Emirates increased by 33.1% and 7.5%

respectively.

Unlike 2010, the African region has showed signs of improvement in

2011. Arrivals from the African region recorded a positive growth with

11.8% capturing a market share of 0.7%.

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Table 4.8 Growth of arrival and Market share

Continent Growth of arrivals Market Share

Europe 9.4 63.8

Asia & The Pacific 52.9 31.6

Africa 11.8 0.7

America 22.7 2.3

Middle East 22.1 1.5

Figure 4.8

Source: Ministry of Tourism arts and culture

4.11 PERFORMANCE OF MARKETS IN THE EUROPEAN

REGION

Most of the major markets from the European region performed with

positive growths for the year 2011. The British market, capturing the

second highest (Figure-4.9) market share with 14.4%, registered a

positive growth of 7.7% while the Italian market capturing the third

highest market share with 11.3%, performed with a positive growth of

0.3%. The German, French, Russian, and Swiss markets which are

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included in the top ten markets with the highest market share recorded a

growth of 11.6%, 8.8%, 22.7%, and 3.7% respectively. Markets which

recorded negative growth in this region include Portugal, Kazakhstan,

and Greece with -5.5%, -10.5% and -14.4% respectively.

Figure 4.9

Source: Ministry of Tourism arts and culture

4.12 PERFORMANCE OF MARKETS IN ASIA & THE PACIFIC

REGION

Asia & the Pacific region captured a market share of 31.6% remained as

the second (Figure 4.10) most tourist generating region to captured a

market share of the Maldives in 2011 whereas in the year 2010 this

region23.7%. With a total of 250,638 tourists, this is an impressive

growth of 52.9%. The positive growth registered from this region is

contributed by the robust increase from the Chinese market which is now

the market with the highest market share of15%. The Chinese market

recorded a growth of 96.1% compared to 2010. Other markets from Asia

which are included in the top ten markets include Japan, India and Korea

recording5.9%, 62.5% and 53.8% growth in arrivals respectively.

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Figure: 4.10

Source: Ministry of Tourism arts and culture

4.13 TOP TEN MARKETS 2011

The regional market trends have been defined by the decline in the

European markets and the rise of Asian ones, noted in the previous sub-

section. At the same time, the Americas region has been growing though

only in line with the overall pattern of tourism to Maldives, accounting

for between 2% and 3% of total arrivals. The Middle East region has

increased its market share from under 1% in 2007 to 1.6% in 2011, and

2.3% in the first nine months of 2012. The African region produces less

than 1% of arrivals in Maldives as a consequence of the lack of air access

following the termination of charter based inclusive tour programmes

from Johannesburg a decade ago when it is reported that as many as

10,000 South African tourists a year came to Maldives. Market trends are

outlined below for the leading individual source countries for Maldives:

1. China

2. UK

3. Germany

4. Italy

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5. Russian Federation

6. France

7. Japan

8. Switzerland

9. India

10. Korea Republic

Markets in the top four positions have changed compared to 2010. In

2011, the top most tourist generating market is China which was in 4th

position last year. Last year‟s number one market, United Kingdom, has

moved down one place to 2nd position. Likewise Italy and Germany

both have also moved down one place to 3rd and 4th position in 2011

respectively. India and Korea have switched places with each other to

9th and 10th positions compared to 2010. However markets such as

France, Russia, Japan, and Switzerland remained in the same positions as

2010 in 5th, 6th, 7th, and 8th positions respectively.

4.13.a .CHINA

Chinese arrivals to the Maldives have been growing rapidly over the last

five years at an average rate of 52.2%. With a total of 118,961 arrivals

and 15% of total shares, China became the number one market to the

Maldives in 2010. The market maintained its position in 2011 by further

increasing its shares to 21.3% with 198,655 arrivals that year. This huge

increase in Chinese arrivals to the Maldives mainly accounts for the

increased direct access between Maldives and China as well as the strong

demand for Maldives as a honeymoon destination among Chinese.

The liberalization of outbound travel and the strong economic growth in

China have led to a rapid increase in outbound tourism, resulting in it

becoming one of the largest sources markets for international tourism.

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According to the PATA Annual Tourism Monitor 2012, more than 58

million arrivals were generated from China to the Asia Pacific region in

2011; while the UNWTO forecasts that China will generate 100 million

travelers by 2020.

The recent (slight) slowdown in the growth of the Chinese economy is

having little effect on the Chinese outbound market. Data from the

Ministry of Public Security show that 38.6 million mainland Chinese

citizens traveled outside the country in the first six months of 2012, a near

20% rise on the corresponding period on 2011. According to a

September 2012 Huron Report and International Luxury Travel Market

Asia survey, the typical wealthy Chinese outbound traveler takes three

holidays a year. Though more seasoned Chinese travelers engage in

experience-based activities, shopping remains the top activity for

overseas travel. This is particularly so for the Chinese traveler to

Maldives, for some 60% of whom their visit to Maldives is their first

overseas trip.

Responding to the introduction of charter flights from six Chinese cities

and the strongly positive image of Maldives among Chinese consumers,

China has quadrupled its share of tourist arrivals in Maldives between

2007 and 2011 from 5% to over 21%. Its average annual growth rate of

almost 50% between 2006 and 2011 was remarkable and, even for China,

was greater than to most competing destinations e.g. Bali‟s growth from

China was 20% per year. Seasonal flows from China to Maldives are

heaviest in the July – October period, with a peak in February during the

Chinese New Year holidays. This partly counterbalances the European

seasonal pattern that shows highest demand in the European winter

months.

115

Figure:4.11

4.13 b UNITED KINGDOM

Although the UK market has traditionally been the largest source market

to the Asia Pacific region from Europe, an overall 1% decline was

recorded from this market for the region in 2011. According to the

PATA Annual Tourism Monitor 2012 early edition, during the year 2011

a total of 9.4 million visitors from UK traveled to the Asia Pacific region.

Out of these, 248,000 traveled to South Asia (excluding India and

Pakistan for which data were not available for the Monitor) and 104,508

to Maldives.

The economic problems of the past four years have changed purchasing

patterns of

Outbound long haul holidays. The increased emphasis on value-for-

money destinations and packages with all-inclusive holidays increasingly

preferred. The Travel and Tourism Intelligence Mintel Report anticipates

that British long haul travel will contract until 2015.

116

The United Kingdom is a well-established traditional market to the

Maldives, being the leading source market until 2010 when it was

overtaken by China. Demand has been inconsistent in recent years with

falls in arrivals recorded in 2008, 2009 and 2011, resulting in an average

annual decline between 2007 and 2011 of over 4%, resulting in a loss of

market share from 18.5% to 11.2%. Despite this decline it remains

Maldives‟ second largest source market with 104,508 arrivals in 2011,

though it is likely to be passed by Germany in 2012 based on first nine

months figures which show a drop in UK arrivals of 13.7% over the

corresponding period in 2011.

The seasonal pattern of arrivals shows peaks coinciding with the Easter

holiday period in March/April, and October (coinciding with half term

school breaks). However, demand is reasonably evenly spread across the

remainder of the year.

Figure: 4.12

4.13 c GERMANY

International visitor arrivals from Germany into the Asia Pacific region

increased by 2% in 2011 with a total of 4.9 million visits, as reported in

the PATA Annual Tourism Monitor 2012 early edition. According to the

117

Monitor, although South Asia (excluding India and Pakistan) was the

least visited sub region by Germans, it recorded the strongest gain of

+18%, receiving a total of 171,000 tourists from Germany during 2011,

with 91,000 visiting Maldives.

The About Tourism website indicates that Germans took 321 million

domestic and foreign trips in 2011, up 4% on the level in 2010, with

nights spent away also 4% higher at 1.6 billion. The holiday share, at

45%, similarly rose by 4%, with business (up 6%) and private trips(rising

3%) also growing.

Germany was the third largest market to the Maldives at the end of 2011,

with 90.517 arrivals, but will move into second position in 2012 if the

16.2% rise in arrivals during the period January-September 2012 is

maintained for the remainder of the year. Although Germany slipped a

little in terms of market share between 2007 and 2011, it has recovered to

10.4% over the first nine months of 2012.

Figure: 4.13

October to March (or April depending on the month in which Easter falls)

is the most visible peak season, while the lowest count in arrivals is

recorded in June.

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4.13 d ITALY

PATA Annual Tourism Monitor figures show that tourist arrivals from

the Italian market to Asia Pacific destinations declined by -1.04% in

2011. The South Asia sub-region (excluding India and Pakistan) attracted

just over 94,000 Italians, of which 83,000 visited Maldives.

Italians are credited for discovering Maldives as a tourist destination and

remained the leading source country up to 2007 when the UK became

larger. Over the last five years the Italian market has lost more than half

of its market shares from 17.3% in 2007 to 8.9% by the end of 2011,

during which period arrivals fell by an average of 8% a year. This decline

is understood to be as a result of a combination of Italy‟s economic

difficulties leading to the bankruptcy of major Italian tour operator sand

the upmarket move of resorts replacing club style resorts preferred by

Italians.

Italian arrivals start to increase from the month of November and increase

steadily through March. From April to July the market gradually slows

down, recording its lowest level of arrivals in June. After a sharp increase

in August, Italian arrivals again drop in September.

Figure: 4.14

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4.13 e RUSSIAN FEDERATION

The PATA Annual Tourism Monitor 2012 early edition reported that

arrivals from Russia to the Asia Pacific region increased by 19% reaching

4.5 million at the end of 2011. When looking at sub regional level data

collected by PATA for the Russian market, the strongest growth in

2011was recorded for the Southeast Asia region with 54%, followed by

South Asia (excluding India and Pakistan) with 34%. Total outbound

travel by Russians remains resilient despite the economic troubles in

Europe.

At the end of 2011, Russia was the 5th largest market to the Maldives.

The market performed extremely strongly over the last five years with an

average growth of 26%. The decline recorded for the year 2009 was due

to the overall decline in arrivals that year as a result of world economic

recession that started in late 2008. In 2011 with 63,936 arrivals, a strong

growth of 30% and a slight increase in market share, the Russian market

overtook France to become Maldives‟ fifth largest market, a position that

it consolidated during the first nine months of 2012 with arrivals up by

3.6%.

Russian tourism to Maldives peaks over the Christmas/New Year period

having built up steadily from October. The Easter period in March/April

also sees growth, while the period May-July is the low season for Russian

tourist arrivals in Maldives

120

Figure: 4.15

4.13.f.FRANCE

In 2011, arrivals from France into Asia Pacific destinations increased by

6% to reach a total volume of nearly 4.7 million, as reported in the PATA

Annual Tourism Monitor 2012 early edition. It records that South Asia

was the fastest growing sub-region for the French market in 2011, with a

total of 133,000 arrivals, an improvement of over 22% compared with

2010. Maldives attracted just fewer than 60,000 arrivals from France in

2011, a rise 9% compared with 2010.

The French market has seen steady growth over the last five years with an

average rise in arrivals in Maldives of 6.5%. While all other markets

registered negative growths during the world economic crisis in 2008 and

2009, the French market recorded positive growths of 6.2% and 4.7%

respectively in those years. From 2007 to 2009 the French market

increased its share of arrivals in Maldives. However, in 2010 and 2011

the market share declined from 7.7% in 2009 to 6.4% by the end of 2011,

as growth from other markets – most notably China – outran that from

France.

The French market for Maldives has a marked seasonal pattern with a

steady rise in demand from September leading to a peak in

121

February/March, after which there is a sharp fall with the period from

May to September when monthly arrivals are only 15 to 30% of the peak

month.

Figure: 4.16:

4.13. g .JAPAN

Outbound travel from Japan to Asia Pacific destinations posted a growth

of over 2% in 2011. According to the PATA Annual Tourism Monitor

2012 early edition, a total of over 17.4 million Japanese travelled to the

Asia Pacific region. The South Asia region (excluding India and

Pakistan), although recording the least in terms of volume of arrivals, was

the second best performing region in terms of its growth rate over 2010.

As per the Tourism Monitor, a total of 823,000 Japanese travelled to the

South Asia region in 2011.

The Ministry of Justice recorded a figure of just under 9 million Japanese

travelling overseas for the first six months of 2012, a rise of 17.5% over

the corresponding period in 2011, the highest level since 2000.

The Japanese market has played a major role in the development of

tourism in Maldives, being the leading Asian source market up to 2007.

122

The market has, however, fallen sharply since 2007, with a virtual

halving of market share from 6.1% in 2007 to 3.8% by end 2011. The

five year average growth rate of the market stood at -1.8%. In 2011, with

a total of 35,782 tourists Japan was the 7th largest market to the

Maldives.

In contrast to European markets, the second half of the year is the main

time for Japanese visitation to Maldives with the peak month being

September and the lowest May.

Figure: 4.17

4.13.h.SWITZERLAND

PATA data show that Asia Pacific destinations received a total of

332,997 tourists from Switzerland in 2011, a 5.8% increase compared

with the 314,786 Swiss that arrived to the area in 2010. The most

travelled sub-region in Asia Pacific by Swiss was South East Asia

covering over 58% of total arrivals to the PATA area that year. In 2011

South Asia (excluding India and Pakistan) received a 38,527 tourists from

Switzerland, which was 12.2% of total Swiss tourist arrivals in PATA

countries for that year.

123

In 2011 the Maldives received a total of 32,504 tourists from Switzerland,

which was an increase of 17.1% compared with the 27,766 arrivals in

2010. Tourist arrivals to the Maldives from Swiss market have been

increasing steadily over the last five years at an average rate of 4.6%. The

Swiss market share increased steadily from 2007 till end 2009. However,

in 2010, the Swiss market share fell from 4.1% to 3.5% following the

large percentage growth recorded from other markets, most notably

China. Switzerland‟s market share remained at 3.5%. At the end of 2011,

Switzerland was the 8th largest market to the Maldives.

Swiss travel to Maldives peaks in March/April and October/November,

while June and August have the lowest level of Swiss arrivals.

Figure: 4.18

4.13.i.India

Figure: 4.19:

124

According to the PATA Annual Tourism Monitor 2012 early edition,

India generated close to 5.4 million arrivals to Asia Pacific destinations in

2011, an increase of 7.3% over 2010. Although in terms of volume,

South East Asia destinations captured most of the arrivals from India to

the Asia Pacific area, South Asia recorded the highest growth rate for the

Indian market over 2010.Indian agents report that luxury travel by

Indians continues to rise despite the recent slowdown in the country‟s

economic growth and the weaker rupee.

The Indian market to the Maldives has been growing at above average

growth rates of 23.5% over the last five years. In 2011, Maldives received

a total of 32,504 tourists from India, which was an increase of 20.3%

compared with 2010. Market share remained at 3.3%. Being a

neighboring country and having relatively easy access, India remains to

be a potential tourist market to the Maldives.

The final months of the year and May are the main periods for Indian

travel to Maldives.

4.13.j.KOREA REPUBLIC

Figure: 4.20

125

The Republic of Korea generated nearly 13 million tourists into Asia

Pacific destinations in 2011, according to the PATA Annual Tourism

Monitor 2012 early edition. Arrivals from the Korean market across all

Asia Pacific destinations increased by less than 1% in 2011.Koreans‟

outbound travel increased from 6.1 million trips in 2000 to 14 million in

2011. Steady growth is anticipated in response to increasing numbers of

low cost carrier routes to South East Asian destinations, the strength of

the won against the US dollar, and solid economic growth of the order of

4% a year.

Maldives received a total of 25,285 tourists from Korea in 2011, 1.9%

more than in 2010. Over the last five years, from 2007 to 2011, the

market grew at an average annual rate of 12.5%, with market share

staying around 3%.

4.13.k.Total Tourist arrivals

Table: 4. 9: Total Tourist Arrival 2006-2010

Months 2006 2007 2008 2009 2010

January 58332 64570 64621 61531 67478

February 54741 65224 67963 58520 77063

March 54596 64491 71623 62127 74975

April 55983 63171 62670 57186 60742

May 40961 46602 48764 43154 58321

June 33037 38457 40283 36205 44050

July 42776 51025 47675 44332 57232

August 49968 53168 51824 52388 66315

September 44593 48468 50687 50396 62524

October 54721 58706 56363 62432 74707

November 43594 56797 57961 61986 74252

December 58621 65210 62578 65595 74225

126

Figure: 4.21

The Figure 4.22 shows that month wise tourist flow to Maldives from

2006 to 2010. Except in the year 2009 in rest of the year the flow is

having an up ward trend. It is clear from the Figure that from January to

March the flow to Maldives is high and starts decreasing from April to

June then on awards increases up to the month of August again a fall in

September rises till the end of December. The tourist flow is high from

October to March except a fall in the month January in all the years.

4.14 PURPOSE OF VISIT

Information on tourist purpose on which a broad segmentation

breakdown of Maldives‟ tourists can be made is contained in the Tourist

Profile and Opinion surveys.

Details of the three most recent such surveys are as follows:

2004: Conducted in October, 3,241 completed questionnaires of which

82% were from European tourists and 16% from Asia/Pacific tourists.

NB this over-represents Europe and under-represents Asia/Pacific in

respect of total tourist arrivals in the year of 73% and 25% respectively.

127

2008: Conducted in December, 776 completed questionnaires of which

88% were in the languages of the main European markets (English,

Italian, German and French) and 12% in the languages of the two

principal Asian markets (Japanese, Chinese).NB: this assumes that

tourists for whom their first language is not one of the six featured will

either have sufficient comprehension to complete the questionnaire or are

not covered in the survey.

2011: Conducted in April, with 3,548 questionnaires completed in

sufficient detail to be entered into the analysis. Of these, 76% were in the

languages of five major European markets (English, Italian, German,

French and Russian, though only 35 questionnaires from

Russians were entered, just 1% of the sample as against 7% of total

arrivals in Maldives in 2011), and 23% in the languages of the two

principal Asian markets (China, Japan). Again, this results in non-

speakers of one of these seven languages being excluded or completing

the forms in a second language.

The fact that the surveys were conducted at different times of the year

when seasonal patterns vary between the different source markets, and

the profile of tourist can differ (e.g. in respect of periods when

honeymoons or family holidays are taken, suitable months for diving)

raises the issue of the comparability of the three surveys. The findings in

respect of purpose of visit and motivations for choosing Maldives have

been used to develop a broad segmentation analysis and trends have been

identified through comparison of the three surveys. However, it should be

stressed that this analysis should be seen as indicative rather than as a

precise breakdown of the tourist markets to Maldives.

128

As table 4.10 and Figure 4.23 shows, the main reasons 90% and more of

that tourists come to the Maldives are for leisure, honeymoon, and diving

the rest is less than 10%. The majority of tourists (53% 55% 64%) seek

leisure and relaxation, but with its strong appeal as a romantic

destination, the „honeymooner‟s‟ category (30% 28% 20%) is also

significant. The underwater beauty of the islands also attracts divers;

they make up 15%, 11% and 10% of all visitors in the three interval of

2004, 2008 and 2011 survey. It is interesting to note that in the entire

three intervals the percentage of relaxation has increased but the

honeymoon and driving percentage has decreased.

Though the wording of the different surveys changes - i.e. from „leisure,

relaxation, holiday‟ in 2004, to „relaxation‟ in 2008 and to „holiday‟ in

2011 – it is clear that relaxation (to use a collective term encompassing

all these terms) is the predominant purpose of visit to Maldives. The

essence of a relaxation visit is a combination of the peace and beauty of

the setting, quality facilities and service and the chance to engage in

water-based activities of a „soft‟ nature. Furthermore, demand for this

type of holiday appears to be growing, according to the survey results.

Table 4.10: Purpose of visit to Maldives, 2004, 2008,& 2011 (%)

Purpose of visit 2004 2008 2011

Relaxation * 53 55 64

Honeymoon 30 28 20

Diving 15 11 10

Business 1 3 2

Others * 2 2 4

Total 100 100 100

Source 2004, 2008 and 2011 tourist opinion surveys

129

Figure 4.22

Honeymoon trips – which place a high value on the same attributes as the

relaxation holidays – have shown a decline in market share over the

course of the three surveys though for the Chinese market this is still the

single main purpose of visit and enquiries among European tour operators

suggest that as the economic situation in the region improves this

category of travel will strengthen again. Though the strict comparison of

the three surveys shows diving to be losing market share, this is

principally because the fast growth Chinese market has only a very small

specialist diving segment, serving to pull down the overall percentage of

divers among total arrivals.

130

Table.4.11 Purpose of visit to Maldives, by source market, 2008& 2011

Market

Relaxation Honeymoon Diving Business Others

2008 2011 2008 2011 2008 2011 2008 2011 2008 2011

EUROPEANS 64 78 19 8 15 12 1 1 1 2

Of which

UK 64 80 22 11 9 6 1 1 4 3

Germany 70 81 2 7 25 11 2 0 1 1

France 59 72 21 11 20 15 0 1 1 2

Italy 66 83 28 3 6 11 0 1 0 2

Switzerland 64 76 0 4 36 21 0 0 0 0

OTHERS 59 74 29 9 8 12 0 1 4 4

Of which

China 37 41 56 43 2 4 8 6 4 6

India 15 41 70 15 0 3 10 28 5 13

Japan 36 38 58 50 4 0 2 1 0 11

OTHERS 23 41 47 35 4 9 17 7 9 8

Americans 56 59 16 18 20 15 0 4 8 4

Australians 11 54 68 30 5 1 11 1 5 14

Total 55 64 28 20 11 10 3 2 2 4

Source: Calculations based on 2008 and 2011 Tourist Opinion Surveys

In volume terms, the levels of all purpose-of-visit categories have

increased between 2008 and 2011, (table 4.11) with the most marked rise

(58%) being in those seeking a relaxing break in Maldives. There were

100,000 more relaxation category Asian tourists in 2011 than in 2008,

with a fivefold rise in Chinese relaxation tourists, up from 16,000 to

82,000. The volume of Chinese honeymooners is even greater at 99,000

in 2011, with a similar rate of growth over 2008. The growth in other

categories of tourists and from markets other than China is more modest.

131

Drilling down the survey findings by major origin markets the significant

facts and variations to emerge are as follows:

Holidays for pure relaxation are dominant in all European markets;

Honeymoon trips are the main purpose of visit for the Chinese but

have lost ground in European markets as a consequence of the

economic downturn since 2008 – this is particularly noticeable in

Italy. (The large number of Indian honeymooners in the 2008

survey was a result of the timing of the survey during the

traditional Indian wedding season between November and March);

Diving holidays remain strong among several European markets

and for Americans;

Asians – especially Indians – are the main business travellers to

Maldives.

4.15 AGE GROUPS

The 25-34 age group accounts for the majority 56% of Asian tourists with

a further 24% in the 35-44 age band. By contrast, there is a wider spread

among Europeans with one quarter each in the three age categories 25-34,

35-44, and 45-54. Around one fifth of Europeans and Americans are aged

over 55, whereas for Asians the corresponding proportion is just 3%.

Travel trade research suggests, however, that this pattern may be

changing for Asians, particularly the Chinese. It is becoming a custom for

the younger Chinese who have benefited from the strong economic

growth in the country to take their parents and, even, grandparents on

holidays overseas, as a mark of gratitude and respect for them. This

represents an opportunity for Maldives but heightens the need for Chinese

speaking staff and food with which the older generation Chinese may be

familiar.

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4.16 ARRIVALS TARGETS BY SOURCE MARKET REGION

Given implementation of the strategies proposed in 4MTP, including

ensuring sufficient supply of mid range resorts to attract European

charters to both Male and Gan; no political problems, tsunamis or similar;

realization of Mega Maldives route expansion plans; and sustained,

effective and fully integrated (public and private sector) future tourism

marketing and promotion, further growth at the rate of 9.5% a year can be

targeted between 2016 and 2021, (table 5.8) reaching a level of 2.5

million arrivals by 2021. Tourists from the Asia and Pacific region will

account for 56% of all arrivals by 2021 at 1.4 million, having risen by

12.5% a year over the five year period. The number of European arrivals

will approach the 1 million mark by the end of the period, having grown

by 5.5% a year. Significant growth can be anticipated from the Middle

East and Africa regions.

Table: 4.12 Target of tourist arrivals, 2016 & 2021

Source

Market

% p.a.

growth

2006-2011

2011

Arrivals

(‟000)

% p.a.

growth

2011-2016

2016

Arrivals

(‟000)

% p.a.

growth

2016-2021

2021

Arrivals

(‟000)

Europe 3.3 538 4-7 703 5-8 963

Asia &

Pacific

22.5 349 15-20 782 10-15 1,409

Americans 17.0 24 8-12 39 8-12 62

Middle

East

27.2 15 10-15 27 10-15 49

Africa 9.2 6 8-12 10 10-15 17

Total 9.1 931 10-12 1561 8-11 2500

In dividing the total tourist flows from the main tourist source regions

into segments, the 4TMP planning team has been guided by the visitor

opinion surveys and feedback from the Maldives industry and advice

from leaders in the tourist distribution trade in Europe and Asia.

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4.17 PHASES OF TOURISM DEVELOPMENT

Tourists first started coming to the Maldives in significant numbers in

1972 when the first resort, with a 280-bed capacity, was established. In

the years since, five phases can be identified in the development of the

Maldivian tourism industry (MTCA, 2008a).

The first phase is considered to be from 1972 to 1978, when tourism was

largely unplanned and took place according to individual initiative

(Dowling, 2000). The 17 resorts with 1300 beds that were established

during this time (MTCA, 2008a) were very simple in facilities and

modest in services due to a lack of resources and trained personnel in the

field. Speed boats and mechanized fishing boats were used to transfer

passengers and cargo between the airport, Male‟ and different resort

islands. Thus all resort development was concentrated in close physical

proximity to the only international airport, i.e. near the capital island of

Male‟. This has resulted in over 47 percent of the resorts being located in

the central region of the country (MTCA, 2008a). During this initial

phase, tourism did not play a significant role in the economy (Domroes,

2001).

The second phase covers the years 1979 to 1988. With the opening of a

further 41 resorts, this period witnessed the establishment of a large

number of resorts within a short period of time. The creation of a wide

network of air services through charter carriers with various promotional

packages, as well as the increased capacity of resorts, fuelled

development of tourism in a short span of time It was during this period

that foreign companies began to invest in the Maldivian tourism industry.

By the end of 2006, out of the 89 resorts operating in the Maldives, 68

were leased to local parties, 14 resorts were leased to joint-venture

134

companies and the remaining seven islands were leased to foreign

companies. Only 47% of the resorts are operated by local parties, with the

rest being operated by foreign companies or foreign shareholding

companies (MTCA, 2007a).

An important highlight of the second phase of tourism development was

The First Tourism Master Plan (FTMP) which was formulated in 1983.

The FTMP laid the foundation for sustainable development of tourism,

emphasized environmental protection and called for integration of

tourism into the social and economic development of the country. Resorts

developed during the final years of the second phase followed the FTMP.

Policies set out in the FTMP that limit built-up space on resorts, require

building heights to be compatible with the natural vegetation of the

islands, and include measures for environment and reef protection are still

adhered to in resort development. Rules introduced during this phase also

set the guidelines for the quality of services and facilities provided to

tourists. A regulation instigated under the FTMP stated that the built-up

area on tourist resorts should not exceed 20% of the total land area of the

island. This regulation contributed to the creation of peaceful and quiet

environments on resort islands – now a key feature of Maldives‟ tourism.

The third phase of tourism development, from 1989 to 1997, saw the

opening of 16 additional resorts with a further bed capacity of 4920. The

positive impacts of the vast developments in transport and technology

experienced in the Maldives, and the world over, during the early 1990s

were reflected in tourism development during this period.

Thus, apart from growth and expansion of resorts, this was the phase

when innovative and high-quality services were introduced to tourism

development. The Faculty of Hospitality and due to the fast rate that

135

tourism developed, and with a shortage of local skilled labour, local

manpower alone was unable to cater for the demand for jobs created by

the tourism industry. As a result, during this phase a large number of

expatriates joined the industry. By the end of 2006, out of the 22,000 jobs

in the tourism sector (MTCA, 2008b) 11,095 jobs were filled by

expatriates (MPND, 2007a). This was in spite of a government regulation

that states that the employment of expatriates in tourist resorts should not

exceed more than 50% of the total employees.

The period from 1998 to 2001 was the fourth phase of tourism

development in the Maldives. Tourism development during this period

came under the Second Tourism Master Plan (STMP) which covers the

years from 1996 to 2005. A key feature of the STMP was the plan to

expand and develop tourism into more regions across the country, with

the aim of decentralizing tourism from Male‟ atoll and spreading the

benefits of tourism among all the atolls, particularly the southern and

northern regions, In addition, reducing expatriate labour and increasing

the participation of women in the tourism labour force were also key

targets. With regard to women‟s role in tourism, there is a huge gender

disparity in employment. Only 1512 women were working in the industry

in 2006 compared with 10,578 men (MTCA, 2007a). Cultural and social

norms play a major role in this imbalance. The isolated nature of resorts

and the nonavailability of the option of commuting to work daily from the

inhabited islands are contributing factors that discourage women from

working in resorts. A seminar on the Management of Human Resources

in the Tourism Industry notes: It was generally agreed that hiring women

to work at resorts proved difficult due to security concerns and attitudes

of parents who do not want their children to be employed at resorts,

which are perceived as predominantly male working environment

136

(MTCA, 2008b). It was during this phase that international resort brands

began to establish themselves in the Maldives. While spa resorts were

launched with the aim of introducing higher quality tourism, a wide range

of accommodations were also introduced in order to attract tourists from

various market segments. As such, apart from resorts, hotels, guest

houses, yachts and safari boats began their operations. With resorts

opening in areas far from Male‟ International Airport, seaplanes were

introduced in place of speedboats to transfer tourists from the airport to

resorts. During the fifth phase of tourism development, which extends

from 2002 to 2008, the Third Tourism Master Plan 2007–2011 (TTMP)

was launched in 2007. Its key aim is “taking tourism to the people within

the broader framework of sustainable development in the economic,

environmental, and social spectra” (MTCA, 2007).

During this period, islands throughout the country were released for

tourism development. Islands and plots for tourism development are

leased from the government on fixed-term contracts under a competitive

bidding process in 2006, 35 islands were designated for tourism

development. This latest release of sites included plots of land for city

hotel development on inhabited islands. This was a new initiative

because, until then, tourist development had strictly followed the one-

island-one-resort concept which was aimed at limiting potential negative

social impacts from tourism, a policy which has created the “distinctive

concept of „Resort Islands‟ (Domroes, 2001, p. 123) in the Maldives.

Each resort island provides its own infrastructure, power, water supply,

sewerage and rubbish disposal arrangements (Dowling, 2000).

Government regulation dictates that for waste management, each resort

must have incinerators, compactors and bottle crushers (Domroes, 2001).

137

For the first time a public company was formed within the tourism

industry to give locals a share in the tourism industry. Maldives Tourism

Development Corporation (MTDC) holds 45% government share and

55% public share. By the end of 2007, there were 89 resorts with a bed

capacity of 17,802. In addition, safari vessels, hotels and guest houses

provide lodgings facilities totalling 235 tourist establishments with a bed

capacity of 20,505 (MTCA, 2007a). Hotels and guest houses cater the

needs of tourists, business and domestic travellers. These facilities

provide convenient accommodation for tourists who transit in Male‟

before or after their stay in the resorts or safari vessels. Tourism has

become the largest economic industry in the Maldives, providing 22,000

jobs (ibid) and contributing 30% of government revenue, 30% of GDP

and 70% of foreign exchange (MMA, 2008).

Today, the Maldives is a world-renowned tourist destination, with several

international brand names in its tourism portfolio, and it continues to win

numerous international tourism awards (www.visitmaldives.com). Most

of the resorts in the Maldives are capable of providing state-of-the-art

facilities and services, entertainment and high-tech telecommunication

services (Dowling, 2000). Over-water bungalows built on stilts in the

shallow lagoons surrounding the resort islands and spas are a popular

theme of recent years. In addition, some resorts boast underwater spas

and restaurants (MTCA, 2008a). At present each resort has its own fleet

of speed launches providing fast and convenient travel. There are three

airports serving inter-atoll domestic flights in addition to seaplane

operators. In 2008, Gan International Airport commenced operations as a

second international airport bringing tourists directly to the southern part

of the Maldives. By the summer of 2007, 14 charter and 15 scheduled

international airlines were operating flights to the Maldives from different

138

destinations in Europe, Asia and Africa (MTCA, 2007b), Created the

“distinctive concept of „Resort Islands”‟ (Domroes, 2001, p. 123) in the

Maldives. Each resort island provides its own infrastructure, power, water

supply, sewerage and rubbish disposal arrangements (Dowling, 2000).

Government regulation dictates that for waste management, each resort

must have incinerators, compactors and bottle crushers (Domroes, 2001).

As tourism became established in the Maldives, it played a major role in

the country‟s economic and infrastructure development, especially the

establishment of transportation links between the atolls and islands and

the development of regional airports. Tourism has contributed both direct

and indirect benefits. Among the direct benefits are increased

employment opportunities and tourism-related construction. There are

also a number of indirect benefits, though to a lesser degree, through

increased activity in other economic sectors such as telecommunications,

transportation and the revival of the handicrafts industry.

Due to the scarcity of resources, all major goods for developing and

maintaining tourism services and facilities are imported, including

building materials and equipment for the construction of tourist hotels

and resorts. Hence, tourism does not generate a high overall multiplier

effect instead, the high rate of imports, the large number of expatriates

employed in tourism industry, and the prominent role that foreign

investors play in the ownership, management and operation of tour

companies are all factors that cause leakage of a major portion of tourism

revenue earned by the Maldives. “This means that eighty cents of every

dollar spent on tourist inputs accrued to foreign companies” The TTMP‟s

emphasis on increasing linkages between tourism and other supporting

sectors, namely fisheries, agriculture and handicrafts, was a strategy to

reduce these leakages of tourism revenue.

139

As acknowledged by the TTMP, in spite of having a rich culture, heritage

and history, “cultural and heritage tourism has not taken root in the

Maldives”, hence it is argued that these forms of tourism should be

promoted along with the key attractions of sun, sand and sea (MTCA,

2007c, p. 58). Maldives‟ tourism is dependent on the tropical beauty of

the islands. The wealth of underwater coral gardens, white sandy beaches,

crystal clear lagoons, underwater flora and fauna is the nucleus of the

tourism resource (Domroes, 2001). All tourist experiences offered by

tourism operators to various market segments are based on the identity of

a tropical island destination.

Usual tourist activities in the Maldives include water sports such as

diving, snorkelling, windsurfing, catamaran sailing, water skiing and

surfing. In addition to these, resorts organize fishing, excursion trips to

nearby inhabited and uninhabited islands and to the capital island „Male‟

by modern speedboats or traditional fishing boats. Night fishing is a

particularly popular activity – the trips usually end with a barbecue at the

resort with the day‟s catch. Aerial excursions by seaplane and submarine

diving are also provided by some resorts. Most resorts and hotels have

facilities for a variety of indoor and outdoor sports such as tennis,

football, volleyball, badminton and squash. Live entertainment

programmes are held in the evenings, often with local bands and dance

troupes. As a diversification strategy, forms of tourism that portray “a

strong identity of a perfect island destination” were proposed in the

TTMP (MTCA, 2007c, p. 50). As such, Eco Tourism Resorts, Health

Resorts, Luxury Islands, Floating Resorts, Budget Resorts, Live-aboard,

Luxury Yachts and Training Resorts were identified as potential

diversifications. All marketing communications for these products are

proposed to be “designed to retain the unique image and brand of the

140

Maldives” (ibid). While tourism has helped upgrade the general standard

of living, (Yahya et al. (2005)) believe that the concentration of tourism

development close to the capital Male‟ has contributed to creating income

disparities between Male‟ and the other atolls. The proposition of the

TTMP to promote community-based tourism was aimed at increasing the

benefits of tourism to local communities as well as being an avenue for

promoting culture and protecting heritage. While there is a high degree of

economic dependence on the natural environment through tourism, as

Dowling (2000) warned, “Environmental problems faced by Maldives,

are threatening the sustainability of the industry”. A major issue is solid

waste disposal, the methods for which are incineration or dumping into

the sea. With the annual average number of tourist arrivals exceeding that

of the total population (MTCA, 2007b) and all requirements for tourist

industry catered for by imports, including “thousands of tons of meat,

vegetables and diesel oil every year”, the amount of waste produced is

“unsustainable” from the resorts alone, 16.5 kg of waste per visitors is

produced every week (Dowling, 2000).

The Maldives islands are low and flat, with elevations less than two

meters above sea level. Thus, these islands are extremely vulnerable to

elevated sea levels caused by climate change. Domroes (2001) pointed

out that the environmental volatility of the Maldives archipelago is

camouflaged by the detrimental impacts of tourism. Already the Maldives

suffers from inundation and shoreline erosion, which are believed to be

consequences of global warming and greenhouse gas emission (Gayoom,

1998). A dire prospect repeatedly proclaimed by environmentalists is that

low-lying small islands such as the “Maldives archipelago will most

likely disappear under the ocean” (Conrady & Bakan, 2008, p. 32).

However, more recently, it has been announced that the question of

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Maldives going under the sea is overstated, because it has been

established that islands can adjust to environmental changes such as

rising sea levels and increased global temperatures (MSNBC, 2009).

Global warming threatens coral reefs – the key attraction of the Maldives

– as these natural attractions are sensitive to increases in temperatures.