Tag: FTA

Maldives a tourism leader in Asia-Pacific region

The Maldives was among the most popular destinations in the Asia/Pacific (APAC) region for the month of July, with a 27 percent increase in visitors.

Hong Kong followed closely with a 22 percent increase in visitors.

“Even during times of economic uncertainty, the Asia/Pacific region continues to perform strongly, reinforcing its image and position as a powerhouse of international travel and tourism,” said Pacific Asia Travel Association (PATA) Strategic Intelligence Centre director, John Koldowski.

Asia Pacific (APAC) tourism destinations continue to see an upward trend in visitors annually. July 2011 saw a seven percent regional rise in arrivals compared to the same month in 2010.

Although Japan suffered a 36 percent drop in July arrivals, allegedly due to the earthquake and tsunami, Northeast Asia on the whole saw a six percent gain on July 2010. The Pacific, meanwhile, experienced a 3 percent drop in foreign arrivals in July 2011.

A Care Ratings Maldives report recently stated that Maldives tourism has made an impressive comeback since the 2009 global recession, and investment from China and India is expected to surpass precedents in coming years.

This year, the Maldives reached 700,000 arrivals by September. According to Tourism Ministry statistics, 19.9 percent of these arrivals were Chinese.

The increased activity within the APAC region could have a cultural impact at home. “Maldivian staff are more familiar with Western culture,” said Maldives Association of Travel Agents and Tour Operators (MATATO), Mohamed Maleeh Jamal. “Many speak Italian, French, German. So, the shift required to cater to more Asian guests and customers has lead many Maldivians working in the industry to familiarize themselves with Chinese, Japanese and Korean languages and cultural practices.”

Jamal pointed to the 2004 tsunami as the turning point for the Maldives’ tourism market.

“Before then, tourism was dominated by western European countries, and travel companies in China and the Middle East had limited access. Resorts were reaching occupancy levels regularly, and so expansion was not necessary,” said Jamal.

After the tsunami, however, interest from western Europe declined and the tourism sector was forced to work more closely with neighboring countries and their travel agencies. “The Maldives was also receiving complaints that the market wasn’t diverse enough,” said Jamal.

Jamal added that China is an important trading partner for the Maldives, and there was room to expand the business relationship.

But the Maldives has several advantages in the Chinese market. “All countries want to get tourists from China, and the Maldives has an advantage,” said Jamal. “It carries an image of paradise islands and tropical vacations, which is very appealing. In addition, the Maldives is becoming a celebrity hot spot. Given the celebrity worshiping culture that is increasingly common in China, the Maldives is very appealing.”

Jamal commented that Sri Lanka is trying hard to compete with the Maldives’ market.

Tourism is the largest contributor to Maldives’ GDP and foreign currency, accounting for 70 percent of the national GDP indirectly. Maldives Marketing and Public Relations Corporation (MMPRC) aims to draw 1 million tourists to the Maldives by the end of 2012.

PATA international visitor arrival figures suggest that improved economic stability is bolstering APAC’s tourism trend.

According to Care Ratings, Foreign Tourist Arrivals (FTA) surged this year as China’s economy flourished and European economies made a slow comeback. Chinese tourists are projected to account for 15 percent of Maldives FTA by 2020.

But PATA studies note that the source market is shifting into northern Europe and Asia.

Koldowski pointed to a 50 percent increase in Russian arrivals so far this year, and a 14 percent jump in South Asian arrivals in July with 90,000 more visitors than the same month in 2010.

Southeast Asian arrivals to the region grew by 12 percent during the same time frame.

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Tourism sails on with luxury in fragile setting

Maldives tourism has made an impressive comeback since the 2009 global recession, and investment from China and India is expected to surpass precedents in coming years, finds a report from Care Ratings Maldives.

Nonetheless, the Maldives occupies a precarious market, and government controls limit foreign investment, the ratings agency found.

In 2005 Asia surpassed America as a tourist destination, coming in second to Europe. According to Care Ratings, Foreign Tourist Arrivals (FTA) surged this year as China’s economy flourished and European economies made a slow comeback. Chinese tourists are projected to account for 15 percent of Maldives FTA by 2020.

Plans are being made to expand capacity accordingly. The Maldives tourism sector will add 77 new resorts and increase bed capacity by 47 percent over the next three years, the report finds. Additional safari vessels are also expected to be added to the industry, which already boasts a fleet 150 strong.

By the end of 2011, the report projects the direct employments in tourism will have grown from 35,000 to 38,000. Fifty percent of these are likely to be expatriate hires.

Revenues are also expected to increase by 10 percent by the end of the year, claims the report.

Tourism is the largest contributor to Maldives national GDP and foreign currency, however the sector is restricted and vulnerable. The reports lists terrorism, global economic crisis, and limited land and human resources as obstacles to growth. It also points out that environment is a major factor of success.

“The tourism industry is capital-intensive in nature due to the high cost involved in leasing the land, developing the land and constructing a self-contained tourist resort,” states the report. Maldivian resorts frequently sell the appeal of the natural environments, but the Maldivian construction industry lacks the capacity to process raw materials.

Importing processed materials drives the average resort room construction cost up to US$30,000 to US$60,000, one of several factors which makes tourism in the Maldives a high-end market.

Human capital is mentioned as a complicating factor. Resort employment could account for one-tenth of the Maldivian population, 32 percent of which is unemployed. However, only half of resort employees are Maldivian.

Coincidentally, a recent study found that social stigma limited female Maldivian employment in the resort sector to 3 percent, a number far below the demographic’s potential.

Another challenge to growth is government oversight. “The industry now is very much regulated by the government of the Maldives,” states the report. “Tourism is now developed and managed according to country-wide policy based on a master plan.”

All Maldivian islands are government-owned, and resorts can only be leased for 25 to 50 years. Construction is limited by the “One Island One Resort” policy, which allows only one resort per island, and structures are limited to 20 percent of the land available.

Over the past three decades, the ministry has introduced three tourism master plans.

Although the report recognizes the complicating effect of government restrictions on developers and investors, it states attributes these plans with significant growth.

“The growth of the industry in the last couple of decades was mainly due to the efforts taken by the government to promote the tourism industry and the progress was largely on a planned path determined by the First Tourism Master Plan (1983-1992), the Second Tourism Master Plan (1996-2005) and the Third Tourism Master Plan (2007-2011).”

The Maldivian government also created the Maldives Marketing and Public Relations Corporation (MMPRC), which promotes the Maldives as a brand in the world tourism arena.

Last week, MMPRC recognized the value of the Asian travel market by co-hosting a travel agents networking event with GMR. In a nod to the region’s booming business culture, MMPRC MD Simon Hawkins pointed out the advantages of hosting meetings at Maldives resorts.

MMPRC aims to draw 1 million tourists to the Maldives by the end of 2012.This year, the Maldives reached 700,000 arrivals by September.

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