Millionaire’s dream and Maldivian’s reality can coexist in tourism industry: Nasheed

The Maldives’ economy can sustainably and inclusively enhance development through the tourism industry, former President Mohamed Nasheed has told the Asia-Pacific Business Forum.

“The millionaire’s dream, and the Maldivian’s reality can co-exist and create a sustainable development model,” Nasheed told the forum in Colombo.

Describing the success of the guest house tourism model, he told stakeholders from the 53 member states that the exclusive one-island one-resort model has failed to benefit small island communities sufficiently.

“This model worked well for some. It worked for the resort owners and tour operators. And it worked for the central government, who profited handsomely from leasing islands for resort development. But had limited impact on the average Maldivian.”

The success of the tourism industry – dependant on 109 resorts – has seen the country’s per capita GDP double since 2001, now contributing around 35 percent to direct revenue.

Following alterations to tourism policy during Nasheed’s time in office (2008 – 2012) guest houses on inhabited islands have increased almost ten fold over the past five years.

While efforts to further develop the model are continuing with the Addu City guesthouse project, the government has introduced its own integrated resort development concept with a pilot project in Laamu atoll.

The government has touted the project as way to “responsibly diversify” the tourism product while protecting the industry’s high-end luxury image, though critics have questioned the benefit to smaller communities.

Giving the keynote speech at the three-day forum in Colombo, Nasheed said that the success of guest houses had demonstrated that they could bring sustainable businesses to the islands.

“By exploring new policy options – and dealing with key issues such as accessibility, waste or energy – we can build stronger, more sustainable, more inclusive economies,” he said.

He noted that the “ultimate guarantor of success”, however, remained the response to climate change.

“Often, climate change adaptation is the single biggest budget item in small island states. And on current projections that is not expected to get any smaller. So we should support ambitious action internationally, but we can also pursue cleaner development at home.”

Describing the technology of the fossil fuel industry as “Victorian”, Nasheed said that carbon neutrality was possible – as demonstrated by the growing use of solar power in the Maldives, as well as renewable technologies in other small island states.

“The sun is not just for the tourists to enjoy. It is also our biggest energy resource,” he added. “The ocean that surrounds our islands and the sun that shines on us is the future of our survival.”

The government has recently announced a five-year target to generate 30 percent of electricity used during daylight hours in the 196 inhabited islands of the Maldives from renewable energy sources.

Other speakers at this week’s forum include Sri Lankan President Mahinda Rajapaksa, Vice President of Hitachi Yasuo Tanabe, and Vice President of the KMSD Asian Development Bank Bondu N. Lohani.

The forum – first held in 2004 – aims this year to discover opportunities for enhancing interregional connectivity and investment within the context of inclusive and sustainable development.



Related to this story

Government launches guest house island project

How will guest house islands benefit the community?

Addu City Council reveals plans to develop 2000 guesthouse beds

Q&A: Minister of Tourism Ahmed Adeeb

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Israeli tourists evacuated from Thulusdhoo after local unrest

Security services evacuated 34 tourists from Kaafu Thulusdhoo Island following unrest after an Israeli tourist destroyed an anti-Israel placard yesterday (July 28).

Thirty Israeli tourists, and four of other nationalities, agreed to be evacuated last night after police intelligence revealed that more protesters were travelling to the island to join those calling for the guests’ removal.

Managing Director of the Batuta Maldives Surf View Mohamed Hashim said the incident occurred outside his guest house, after an Israeli surfer took down a placard featuring a swastika alongside the Israeli flag and snapped it in two.

Anti-Israeli sentiment has been growing in the Maldives as the escalating conflict between Israel and Palestinians continues to result in heavy civilian casualties in Gaza.

As news of yesterday’s incident spread locals became agitated, explained Hashim, who subsequently informed Island Council President Ahmed Anees. Anees then contacted the police.

Around 30 additional protesters subsequently travelled to Thulusdhoo from Malé and were detained upon arrival, said Anees, being kept at the local station and the island’s social centre.

“Police intelligence said that more were coming from Malé,” explained Anees. “They said it was the best thing that they leave for the night.”

A police spokesperson has said that they provided assistance to the Thulusdhoo Island Council and the Ministry of Tourism, although they declined to give further details.

Neither Anees nor Hashim were certain of the guests’ current whereabouts while officials from the tourism ministry were not responding to calls at the time of publication.

Anees explained that 10 tourists – all non Israelis remained in – the island, while those protesters detained by police were released after the Israeli tourists’ evacuation at midnight yesterday.

Thulusdhoo guest houses

Nine guesthouses have been registered in Thulusdhoo since the relaxation of guest house policy in an industry still dominated by the high end one island/one resort model.

The island – just forty minutes from Malé – is home to one of the countries’ top surf breaks, with a majority of bookings coming from Israeli surfers, explained Council President Anees.

“This is a big loss for us because most of the people depend on guest houses,” he explained, pointing out that this type of incident was unprecedented on the island.

“It is a calm island. Only a few people were involved in this thing,” he explained, suggesting that the unrest had been fomented by outsiders from Malé.

Guest house manager Hashim – who lost all 8 of his guests last night – also suggested that the incident may have been due to the large number of non-locals present on the island for the Eid holiday.

“There have been no problems since we opened two years ago. Tourists are always very friendly with locals,” said Hashim who noted that around 60 percent of his bookings came from Israelis.

“It is a big blow for our business. There are three months of surfing left. I don’t know what we will do now.”

Israeli tourists represent only a small fraction of tourist arrivals to the Maldives, making up just 0.3 percent of the more than one million people who visited the country in 2013.

Anti-Israeli sentiment

The incident in Thulusdhoo was followed by small but vocal protests in the capital Malé during which protesters burned the Israeli flag.

Maldivians have been increasingly active in their calls for an end to the bloodshed in Gaza, with an estimated 13,000 marching through the capital Malé in solidarity with Palestinians earlier this month. Smaller demonstrations were held throughout the country.

Last week the government announced a boycott – admittedly symbolic – of Israeli products and the annulment of all cooperation agreements signed since the resumption of diplomatic ties in 2009.

“I do not think Maldivians want any help from Israel or want to keep up relations with Israel,” said Foreign Minister Dunya Maumoon who has described recent attacks on UN shelters in Gaza as “cowardly and shameful”.

During last week’s meeting of the UN Human Rights Council, the Maldives joined 28 other member states in calling for an independent inquiry into Israel’s violations of international humanitarian and human rights laws in Palestine.

Maldivian citizens have also donated over MVR2million (US$130,000) to the Gaza Fund which will be distributed via the Qatari Red Crescent after August 17.

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Guest House Association established by Maafushi businessmen

Thirty-two managers of guest houses in the island of Maafushi have established the Guest House Association of Maldives with the objective of developing and promoting the sector.

Association member and Manager of Maafushi Inn Hussain Raznee interprets the government’s current guest house island policy as an attempt to inhibit the current guest house business model.

“The establishment of guest house islands will not have any benefits at all for those of us living in the islands,” said Raznee, saying that the current model provide local youth and businesses with an decent income.

“Guest house owners assist in all community activities, donating funds to schools, school events, island community events, and even to efforts to keep the whole island clean. This is all made possible because of guest houses,” he added.

After previously expressing a reluctance to promote the guest house tourism model for fear of damaging the country’s luxury resort brand, the new guest house policy is designed to make the traditional one island/one resort model accessible to small and medium enterprises – with the government’s PR wing, the MMPRC, taking a lead role.

Raznee called on the government to further facilitate the running of guest houses in all islands, suggesting that it could handle promotional activities as long as permits for the businesses were approved.

The group will work to protect the rights of guest house owners and employees from all over the Maldives and to promote local tourism in international markets, he continued.

Raznee noted that, although members of the association are currently all from Maafushi, they are now in the process of contacting and inviting guest house owners from across the country to join the association.

Guest House Islands

The recently launched guest house island project will begin begin with the development of the uninhabited ‘Thumburi’ island in Laamu atoll into a 2000 bed resort.

According to promotional material, the guest house island concept – endorsed by industry groups – aims to “responsibly” diversify the tourism industry without encroaching on inhabited islands.

Tourism Minister Ahmed Adeeb has previously explained the benefits of the policy – part of the Progressive Party of Maldives presidential election manifesto.

“It is a huge infrastructure investment to build a tourist resort. It becomes an expensive place to go to when they invest in water set-ups, sewerage systems – and all before building rooms,” Minister of Tourism Ahmed Adeeb explained to Minivan News during an interview in January.

Adeeb stated then that the Malé Water and Sewerage Company will set up water and sewerage, and electricity systems in guest house islands, after which plots of land from the island will be given to different individual businessmen.

“The thing is, we just don’t talk about guesthouses so much. From a marketing perspective, we have positioned the Maldives as a high-end destination. A-category guests will continue coming for a long as we market the country as an A-category destination. Guests for B,C,D and E categories are something we automatically get,” said Adeeb.

He added, however, that the government supports the running of guest houses even though it will not promote them in international markets.

Some leaders in the industry have also expressed similar concerns regarding the destination’s brand, while the sector’s capacity has tripled in the past six years.

The opposition Maldivian Democratic Party (MDP) has meanwhile criticised the government’s launching of guest house islands, with former President Mohamed Nasheed last week suggesting that guest house islands would not benefit locals, describing them as a threat to the success of guest houses in inhabited islands.

In April, the MDP-dominated Addu City Council passed a resolution to create an ‘Addu Guest House Venture’ which will develop and expand the guest house tourism industry within the city under the guidance of a designated promotion board.

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MATATO backs guest house island policy

The Maldives Association of Travel and Tour Operators (MATATO) has endorsed the Thumburi guest house island project, urging its members to take part in the government’s plans.

“MATATO believes this will help target mass charter flights, rather than FIT [Fully Independent Traveller] or small groups, paving the way to bring back major charter operators to the Maldives,” said the group which represents over 50 local travel agents and tour operators.

Only Maldivians will be permitted to invest in such projects, the government has revealed, with priority given to those not yet involved in the industry.

“The concept is similar to the beach lodges in Phuket or Hikkaduwa. Thus, MATATO would like to urge its members to participate in this development opportunity, as it would allow them to grow from mere travel agency businesses to property owners within the process of vertical integration of a travel agency,” read an association press release.

The official launch of the scheme – part of President Abdulla Yameen’s election manifesto – came last week with a call for expressions of interest from small and medium businesses in the Laamu atoll development.

Envisioned as a way to “responsibly diversify the tourism product of the Maldives”, the plans to develop uninhabited guest house islands come after the rapid expansion of guest houses alongside local communities in the past five years.

Some in the industry have, however, questioned the schemes ability to offer the same level of benefit to local economies.

“The association believes this is a good project, worth our attention and promotion, although fine tuning will still be required, as this is a new concept to the Maldives,” said MATATO which also suggested its members could form a consortium for the project.

The Thumburi project will  make land available on the 17 hectare uninhabited island – as well as the linked Hulhiyandhoo island – for investors to develop hotels, a diving school, water sports centres, restaurants and shopping centres, while government owned companies will invest in the island’s basic infrastructure – electricity and sewage.

“Rather than seeking a large scale investment, the current scheme offers smaller investors an opportunity to invest only in specific sub products, or a small block of accommodation similar to that of investing in a guest house,” today’s MATATO press release continued.

Describing the project as “a new concept for a world class brand”, the Thumburi brochure reveals plans for several beach hotels with rooms ranging from US$100-200 – far less than that currently charged by the country’s budget resorts.

The Maldives Marketing and Public Relations Corporation will lead the project and engage with investors who will then market their own products.

Contributing an estimated 80 percent of the Maldives’ GDP and famous worldwide for it’s luxury one island/one resort image, the country’s tourism industry attracted over one million visitors for the first time in 2013.

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Addu City Council passes resolution to develop guest house tourism

Addu City Council has passed a resolution to create an ‘Addu Guest House Venture’ which will develop and expand the guest house tourism industry within the city, under the guidance of a a ‘Guest House Promotion Board’.

The resolution – passed on Tuesday (April 15) – states that it is important to have the opportunity to develop guest houses and city hotels on the large joined islands of the city, and that it will benefit the tourism industry in general.

Noting that it will create more jobs and new opportunities for start-ups, the resolution stated that it will also increase the number of tourist arrival for the country.

In the past few years the guest house businesses boomed on many islands – growing from just 22 registered businesses in 2009, to 171 currently listed – particularly in close proximity to the capital, Malé.

The list of guest houses available via the Tourism Ministry shows just one registered business in Seenu atoll – home to Addu City, the country’s second largest urban area.

Recent annual figures (2012) show Malé’s Kaafu atoll was home to 39.9 percent of the tourism industry’s bed capacity, while Seenu – the country’s southernmost – had just 3.6 percent.

Addu City Council this week declared that, in order to develop the industry, the Addu Guest House Venture has to be created jointly as a business transaction by the council, members of the public, businesses, and banks.

A five-member guest house promotion board is also to be created under this resolution to represent the council and to communicate on its behalf.

The council is expected to announce applications for the board membership very soon, which according to the council will comprise of technical and experienced persons.

Guest house development on inhabited islands was a key election pledge of the opposition Maldivian Democratic Party, to which all members of the Addu City Council belong.

The party also campaigned in all recent elections with the pledge to strengthen decentralisation, pushing to increase the role of councils in development.

Political supporters of guest houses have pointed out that mid-market tourism creates opportunities for small businesses while economically empowering local communities.

The current government, led by the Progressive Party of Maldives has announced alternative plans for developing mid-market tourism, with the prospect of  guest house islands replacing the idea of guest houses on inhabited islands.

Tourism Minister Ahmed Adeeb has said that various businesses will invest in providing different services on these islands.

“For example, common restaurants can be managed by one party, water sports by another party, twenty rooms by one company, another twenty rooms by another company and so on. In that way, we are creating numerous businesses there,” Adeeb told Minivan News earlier this year.

Adeeb explained that the government was reluctant to market mid-level tourism as it risked damaging the country’s image as a high-end destination.

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Comment: The guesthouse enterprise

The following is a translation of an article by former President Mohamed Nasheed, written ahead of a public forum on Maafushi in South Male’ Atoll, to discuss the future of mid-market guesthouse tourism in the Maldives. It first appeared on Buzzmaldives.

What the average Maldivian wants is basic. We want a way to increase our income. We want to broaden our narrow financial horizons through development.

It is not that we lack this capacity to develop. We have plentiful natural resources. If we settle for the current economic status quo, believing that what we have now is the limit to what we are entitled to, it would mean that our true wealth potential remains untapped.

What the Maldivian Democratic Party and I have always pointed out is this basic fact: we want to develop. To upgrade beyond the current status quo. The ordinary Maldivian’s complaint is that of poverty, of financial anxiety. We want a wallet with the wads; we want to realise that financial progress is possible.

The political office is a place that should offer solutions to these complaints. This is its responsibility and obligation.

The most profitable industry in the Maldives is tourism. The country has ample natural resources that favour this. Maldivians have long since demonstrated the capacity, the insight and aptitude to manage this industry. In the last 40 years, Maldivian tourism has ballooned into a billion-dollar industry.

In those four decades, we have sold two types of tourism-related services: resort facilities and live-aboard facilities. According to industry experts, these two particular trades rake up [annual] invoices of up to three billion US dollars.

What we advocate through the MDP is that Maldivians deserve far more than this three billion. We could incorporate another facet in the tourist industry, one that would benefit a larger proportion of Maldivians: the venture towards guesthouses.

‘Guesthouses’, in this context means providing vacation facilities to tourists in the Maldivian inhabited islands. The main factors that entice tourists to our isles are its climate and its natural exquisiteness. And it is not just the desert islands that possess these qualities. The entire country is blessed with the same beauty and climate. Providing guesthouse services to tourists from inhabited islands would be no less profitable than resort islands, because the capital costs are lower for the former. While it costs about US$300,000 to create a bed in a resort, we claim it would not cost even US$10,000 per bed in a guesthouse business.

Until the MDP government came to power in 2008, Maldivians weren’t permitted to operate guesthouses on inhabited islands. It was mentioned in the amendments that were brought to the Tourism Act in January that year, but, without the regulations for the actual implementation under the Act in place, the avenues for implementing these businesses remained closed. Under MDP advocation, attempts were made to provide this choice for guesthouse businesses.

During the 16th People’s Majilis, in July 2008, the member for Male’, MP Mohamed Shihab, submitted a resolution to allow guesthouse services in inhabited islands. The resolution was passed with a Majilis majority. Again, due to there being no regulations, the avenues still remained shut.

During the rule of ‘the beloved leader’ Maumoon Abdul Gayoom, of the Progressive Party of the Maldives (PPM), it was not the government alone who vocalised against guesthouses in inhabited islands. It was the resort owners as well. The sentiment behind this insinuated that such a trade would be detrimental to the culture, lifestyle and the religious values of Maldivians. The religious Adhaalath Party’s founding further cemented this line of reasoning.

To this day, PPM, Adhaalath, and resort-owner Gasim Ibrahim’s Jumhoree Party continue their palaver against guesthouse businesses along the same lines.

Maldivians wish for progress. They do not wish to be bogged down in antiquity. If our lifestyles and traditions can only be vivified by keeping the country in this century-old mold, the development that we yearn for would be impossible.

Having tourists on inhabited islands is not going to result in the community facing any additional detrimental effects that do not already exist. On the contrary, having tourists will empower the islanders to overcome whatever objectionable issues that they may face. Maldivians will have to open their eyes to outside cultures, and allow for the increase in opportunities for development. In addition to direct employment and income generated by guesthouses, it will also boost other existing island businesses.

The demand for agriculture and fishing will increase as will the demand for island cafes and restaurants. It will pave the way for laundry services, and bakeries. The transport system will improve. Carpentry and woodwork services will progress. There will be an impetus for the general businesses on the islands.

For a larger proportion of Maldivians to benefit from the tourist industry, a set-up must be established that involves as many Maldivians in the tourist industry as possible. Building a resort is a costly affair. To obtain the hefty capital to develop a resort is a task that is next to impossible for those of us who are not big businessmen. Up to today, there are only about 50 people who directly profit from Maldivian resorts.

According to guesthouse operators, the cost for setting one up is less than what is needed for building a large dhoni. It only takes about two to three million rufiya to construct a four to five bedroom house. A great number of businessmen in inhabited islands are capable of providing this level of investment.

This much is evident from the boats, and the large mansions they have built. Along with them, there are so many people, in Male’ itself, who are capable of investing two to four million rufiya in small businesses.

Permission to operate guesthouses in inhabited islands for the Maldives was only granted as 2009 was ending. In 2010, there were 479 beds in 23 guesthouses. In 2010, 2011 and 2012, guesthouses increased at the rate of two to three guesthouses every month. Currently, there are 1117 beds in 76 guesthouses. The amount of Maldives operating guesthouses is increasing at a fairly rapid rate. Already the proportion of guesthouse operators is catching up to that of resort owners. In three years, there can be more than two thousand guesthouses in the Maldives increasing the amount of tourists coming into the Maldives twofold.

The tourists who come to guesthouses in the Maldives are slightly lower-end travellers, those whose daily budgets hover around the US$100 mark. The guesthouses in the Maldives are priced in similar manner, their rates usually not exceeding US$100. According to related research, there is a large market for this particular range of tourists, around the region in India, as well as in Europe and China.

Consider Maafushi in Male’ Atoll. There are currently 118 beds in 16 guesthouses. According to guesthouse owners, the occupancy rate at these guesthouses have maintained itself at over 70 percent.

Consider Maafushee Dhon Manik. A man I’ve known since childhood (since deceased) leaving behind five children. One of his children opened his first guesthouse in 2010. Since then, he has opened one every year. It has to be said now, that one of Maafushee Dhon Manik’s children is a DRP councilor, which warrants pointing out to refute the claim that these opportunities are available to only MDP members.

A large part of my deceased friend’s life was spent working at resorts, working as a foreman before he got sick. Dhon Manik and his children all understand the business of tourism. Now they are guesthouse owners. There are so many Dhon Maniks in the Maldives. And so many of his sons.

MDP’s forecast is to increase, twofold, the amount of tourists coming to the Maldives, by offering loans and training opportunities for potential business operators, combined with government aided marketing of this particular kind of tourism.

There are currently 22,889 tourist beds in operation in the Maldives. Considering the high costs for resort capital, to increase the amount of beds by 25,000 will take a lot of time. Even now there are more than 100 islands leased for resort development. It is difficult to estimate how long it will take for them to begin operating services. At the most, tourist resorts increase at only at the rate of two or three resorts annually.

To increase guesthouse beds to 25,000 will cost a maximum of US$250 million. If we are to spread this over five years, this is an amount the government could certainly guarantee. In order to develop the guesthouse industry, the basic facilities in inhabited islands should also be improved, such as water, sewerage and electricity. Likewise, health and waste disposal facilities. Roads and transport facilities. Airports, harbours and ferry terminals. Especially, developing skills and education.

The 2009 National development plan was compiled in a manner that paves the way for the guesthouse industry. God willing, in 2013, during my new term in office, the amount of tourist beds in the Maldives will increase twofold. Productivity will increase, along with the income for the citizen and the state. Financial horizons will broaden. The Maldivian island will develop. We will reach the destination of ‘the other Maldives’.

Mohamed Nasheed is the former President of the Maldives and the Maldivian Democratic Party (MDP) presidential candidate in the 2013 elections.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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Maldives over half-way towards one million visitor goal following August arrival growth

Arrival numbers to the Maldives between January and August this year totalled 614,802 people – an increase of 2.9 percent compared to the same period during 2011, official figures provided by the Ministry of Tourism, Arts and Culture have shown.

With Maldives travel authorities aiming to welcome a million visitors to the country by the end of the year, the figures highlight a 3.8 percent increase in arrivals for August 2012 when compared to the same period the previous year.  A total of 79,768 international arrivals were recorded coming to the country last month.

Although unavailable for comment today, Deputy Minister for Tourism, Arts and Culture Mohamed Maleeh Jamal told Minivan News earlier this month that the country’s travel industry was on target to meet its goal of attracting one million annual visitors – claiming the “the hard days” were over for Maldives tourism.

Maleeh claimed at the time that the industry remained on track to attract one million visitors, despite facing challenges such as the impact of ongoing financial uncertainty on some core European tourism markets like the UK and Italy.

According to the Tourism Ministry figures, for the first eight months of 2012, Europe continued to dominate visitor numbers to the Maldives, accounting for 55.7 percent of all arrivals – down 2.9 percent when compared to 2011.

During August, total European arrivals on a year-on-year basis fell by 9.6 percent to 35,488 visitors.

In Central and Eastern Europe, which includes markets like Russia, Poland and Bulgaria, visitors during August fell 7.7 percent compared to the same period in 2011.

In Northern Europe, which incorporates markets including the UK, Sweden and Ireland, arrivals dropped 14.3 percent to 8,202 last month, according to the official statistics.

Southern Europe also recorded a drop in arrivals with 7,710 visitors from markets such as Greece, Italy and Spain coming to the Maldives – a fall of 24.1 percent compared to the same period last year.

Arrivals were up by 5.6 percent from the Western Europe region on the back of growth in markets such as Germany, France and Austria, with 12,434 visitors entering the country during August 2012.

Europe’s smallest tourism market for the Maldives, Eastern Mediterranean Europe, saw 617 arrivals visitors coming from countries like Turkey and Israel, a fall of 7.9 percent.

The Asian impact

Asia was responsible for 38.5 percent of arrivals in the Maldives between January and August 2012, an increase of 9.1 percent over the same time last year.

Despite the overall decline in European visitors during August 2012 when compared to the same period last year, arrivals from the Asia Pacific market were up 12.6 percent to 38,898. The increase was reflected in increased visitors from key markets throughout the region.

North East Asia, which represents the bulk of the region’s travel market for the Maldives – with countries like China, Japan and Korea – saw arrivals increase by 9.4 percent to 31,020 people.

In South East Asia, visitors to the Maldives rose 45.1 percent during August 2012 to 2,809 from markets such as Indonesia, Thailand and Singapore.

South Asia meanwhile posted a 19.6 percent rise in visitors, with 3,623 arrivals from markets including India, Sri Lanka and Bangladesh being recorded for the month on a year-on-year basis. Arrivals from Oceania markets like Australia and New Zealand were up 18.1 percent to 1,446 people.

According to the same findings, arrivals from Africa reached 524, an increase of 24.5 percent, while visitors from the Americas rose 19.9 percent to 2,146. Arrivals from the Middle East during August rose 3.4 percent to 2,712 people.

Occupancy rates

Despite the growth in arrivals, the total occupancy rate for resorts, hotels, guest houses and safari boats during the first eight months of the year was down 1.2 percentage points in total to 70.8 percent. On a year-on-year basis, total average occupancy for August 2012 fell one percentage point to 68 percent.

According to Tourism Ministry statistics, the average resort occupancy between January and August this year fell 2.3 percentage points to 77 percent compared to the same period in 2011. During August alone, average occupancy fell 0.8 percentage points to 74.9 percent.

At the country’s hotels, average occupancy for the first eight months of the year was down 8.8 percentage points to 30.3 percent. In August, average hotel occupancy was down 6.1 percentage points to 25.8 percent over the same time frame last year.

Guest house occupancy for the first eight months of 2012, rose 0.8 percentage points to 16.3 percent. The same level of growth was also recorded in terms of average guest house occupancy for August 2012, which rose 0.8 percentage points to 16.3 percent.

Safari vessel occupancy meanwhile increased 4.1 percentage points between January to August 2012, totalling an average of 28.4 percent. However, average occupancy during August had fallen two percentage points to 19.1 percent.

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Bikini business: the challenges of paradise on a budget

This story was originally published on Minivan News’ spin-off travel review site, Dhonisaurus.com.

With tourism authorities committed to branding the Maldives as a luxury destination, the establishment of guest-houses for independent travellers is presently seen as more of a niche “bonus” for the country’s economy, rather than an up-and-coming business model.

The Ministry of Tourism, Arts and Culture, currently in the process of attempting to claw back consumer confidence in the destination damaged during the early months of 2012, is also in the process of outlining a fourth long-term master plan for pursuing growth within the Maldives travel sector.

As part of these plans, government officials have said they are presently analysing the contribution to the economy of all tourist properties – including resorts, safari boats and guest-houses – before unveiling how each sector will be developed in the future.

While the demand for experiencing guest-houses on the Maldives’ inhabited islands is said to be comparatively “low”, one expert providing independent holiday experiences in the country has said there was interest nonetheless in providing options for backpackers and budget holidaymakers.

As a Muslim traveller first arriving to the Maldives in early 2011, Raki Bench was looking for alternatives to the country’s well publicised island resort experience. Bench, an internet marketing specialist by trade, said that after asking around at what was then Male’ International Airport, he found it was possible with perseverance to negotiate an escape to a local guest-house or even a stay on a desert island.

“We didn’t want to go to a resort and were interested instead in guest-houses and experiences with local people,” he said.

However, when considering the country’s strictly Islamic society, which outlaws certain holiday staples travellers may take for granted at other destinations – like wearing bikinis and purchasing alcohol – Bench said that catering for the needs of holidaymakers outside the Maldives’ resorts was not without its challenges.

Aside from cultural sensitivities, he pointed to several logistical and transport issues, as well as a lack of government support in recent years for the sector, as key concerns holding back the development of the guest-house industry.

Yet almost a year and a half after first arriving to the country, Bench is now the founder of the Guest-houses in Maldives website, which offers specially prepared packages to tourists from all over the world looking for a more budget-friendly, independent holiday experience.

“We find that the business caters for a mix of more budget-focused travellers and also those looking to explore the natural environment in the country. Since 2011, we have started to get interest from families wanting to come to the Maldives on a budget,” he said.

“At present, our main customer-base are Europeans for sure, there are a lot of backpackers staying in Sri Lanka for instance with an interest in coming over to the Maldives for a few days to stay in guest-houses. We also receive some requests from countries like Singapore, but Asia is not our main market.”

The magic number

As the Maldives this year aims to attract a total of one million holidaymakers to its islands, Bench stressed that the country’s reputation as a luxury destination underlined that fact that the guest-house model would not cater for everyone’s tastes.

He added that in recent years, despite previous government commitments to provide more mid-market accommodation for visitors wanting to explore the country’s inhabited islands, further support had been lacking.

“The government has not really been helping guest-houses at all. It is a small sector, but it is showing growth within the wider tourism industry. I don’t see any promotion from authorities,” added Bench, who said he was realistic about the economic reasons for this.

“I do understand why this is the case. After all what is the point in promoting an industry with a value of US$50 a night when you compare that to what resorts can make.”

According to recently published official travel industry figures, the number of bed nights recorded at Maldives guest-houses during January 2012 was up 17.3 percent to 2,867 compared to the same period in 2011.

Over the same period, 622,944 bed nights were recorded by the country’s resorts. Bed nights are used by the hotel industry as a measure of occupancy per person per night.

While the actually occupancy rate of guest-houses was also found to have increased by 2.8 percent in January 2012 over 2011,  guest-house accommodation was found to be only at 20 percent of total capacity, according to the statistics.

Bikini restrictions

From his own experience, Bench said that as the country’s current crop of guest-houses had opened in recent years, not all their proprietors were perhaps experienced in running a travel business – meaning properties were not always being used to their full potential.

“My advice to guest-house owners would be to try and think of the problems they will face,” he said. “Think if there will be daily transfer to your island, think of the restrictions on wearing bikinis on local beaches, therefore is there a resort or private beach nearby?”

Both through his own website, and working as a guest-house product manager for the Maldives Dive Travel company, Bench said that he only offered customers full-board packages. He claimed this was important decision, both as a means to provide the best value for money, but to also overcome the potential challenges in hosting foreign guests.

Taking a typical day staying at a guest-house as an example, Bench said that upon waking up and having a traditional breakfast prepared by their hosts, visitors would then be offered a choice of excursions from diving or surfing, to spending a day aboard a liveaboard boat, private island or even a resort.

“The main reason for this is to leave the island to overcome bikini restrictions. All people who book with us are offered excursions due to the restrictions imposed under local laws,“ he said.

Bench claimed he also aimed to ensure guests booked excursions in advance, as arranging trips such as reef snorkelling or a day on a private beach once staying at a guest-house could prove much more costly.

“You can often find a room yourself at guest-houses for around US$70, which is cheap, but you need to be aware of the regulations and some of the hidden charges that are there,” he said.

Adapting

Despite cultural and legal restrictions on the wearing of bikinis and selling alcohol on the inhabited islands where guest-houses are based, Bench said that increased booking numbers, particularly from European tourists, highlighted that holidaymakers were adapting to the unique nature of more independent travel in the Maldives.

“The increased bookings seen at guest houses in general shows that people are adapting to local cultures during their stay and we haven’t faced too many problems in this regard,” he said.

Aside from guest-houses, with the Maldives’ territories estimated to be comprised of over 90 per cent water, it is perhaps not surprising the safari boats – with their cabins and trained dive staff – have also become an important part of the development of mid-market travel in the Maldives.

Maldives Dive Travel, a company Bench also represents, has itself begun offering guest-house experiences to customers along with its traditional liveaboard voyages, allowing the chance to combine a stay both above the water and on the country’s inhabited islands.

However, Bench said that as a wider industry development, collaboration in the country between safari boat operators and guest-house owners that would allow greater mobiltiy between local islands presently appeared far from viable.

“I know we have thought about combining voyages on safari boats and allowing guests to travel to different islands before. But the only real solution for this would be if a liveaboard boat had the same owner as guest-houses,” he said. “Logistically, for foreign companies like us, this would be impossible to arrange, the infrastructure is not there.”

Bench added that while the Maldives’ laid back island culture was extremely appealing for guests on holidays, a similar attitude sometimes found to be adopted within the country’s ministries and administrative offices also hampered coordination between different industries and sectors.

“Love and nurturing”

Adrian Neville, a veteran of travel writing in the Maldives, told Dhonisaurus that guest-houses had played a role in the development of the country’s holiday industry since being founded in 1972. However, the properties were abruptly closed for many years as of May 1, 1984.

“This was pretty much directly at the behest of the resort owners for obvious reasons and on the spurious grounds of social problems and the wrong type of tourists,” he said. “Of course, now those wrong types are just fine – now they are not ‘hippies’ but ‘independent travellers’.”

While guest-houses had been reintroduced back in 2008, Neville contended that he was not sure whether the general attitudes of resort owners in the country would have changed much, particularly in terms of supporting the fledgling industry.

“The sector is up and running, but it is a weakling in need of love and nurturing,” he said.

Neville claimed that while there was clear interest in the further development of a guest-house sector to allow independent travellers to take in the Maldives, the country’s long-term segregation of tourists from local communities may also serve to limit the potential.

“There is sufficient interest but it won’t grow quickly until the issue of separation or, most unlikely for the foreseeable future, co-habitation with different lifestyles, is resolved,” he said.

According to Neville, there was one key challenge that he ultimately believed would hold back the wider development of guest-houses and opening up independent travel up to tourists.

“Transport. Transport. Transport,” he added. “The ferry system is a sine qua non. A no brainer and a great idea but sadly it has died, withered on the vine as it tried to establish itself. The economic plan to make it happen turned out not to be viable,” he said. “Until this is reworked not enough is being done to open [guest houses] up to tourists.”

Master plan – version 4.0

Ahmed Adheeb, the recently appointed Minister for Tourism, Arts and Culture, said that provisions allowing guest-houses to cater for tourists were provided under law back in 2008.

However, with the government of President Mohamed Waheed Hassan having replaced Mohamed Nasheed’s administration earlier this year, tourism authorities have said they were now in the process of devising an overall tourism plan that would include potential developments for independent travel.

Adheeb said that it was presently difficult “to say where we stand on guest-houses” as the industry was still relatively niche compared to the established resort market.

“The Maldives continues to be branded as a luxury destination within the tourism market. It is a bonus therefore that these guest-houses allow us to supply mid-market demand,” he said.

With the Ministry of Tourism of Tourism, Arts and Culture working with bodies like the World Tourism Organization (UNWTO) on the development of a fourth national “master plan” for outlining tourism industry developments, the exact nature of diversification was as yet undecided.  The third master plan was concluded last year.

“We are formulating our plan right now. This will look specifically into how many guest-houses have been built and how they contribute to the economy,” he said.

Adheeb said that he would be also be looking at quality standards as well as issues of security at more independent properties as part of the master plan before divulging how the government might look to support and promote guest-houses.

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