Government revenue declines in May

Government revenue declined by MVR19.2 million (US$1.2 million) in May compared to the same period last year and reached MVR1.2 billion (US$77.8 million), the central bank has revealed in its monthly economic review.

Total expenditure during the month meanwhile rose by MVR104.9 million (US$6.8 million) and amounted to MVR1.5 billion (US$97 million).

“The decline in total revenue during May 2015 was mainly due to the decline in both tax and non-tax revenue which fell by MVR9.5 million and MVR1.7 million, respectively,” the review stated.

“The fall in tax revenue was mainly contributed by the decline in revenue from business profit tax and tourism tax, while non-tax revenues declined owing to a significant fall in revenue from resort lease rent. Meanwhile, the increase in expenditure was largely due to a growth in recurrent expenditure.”

In May, the government obtained US$20 million from Saudi Arabia for budget support. Finance minister Abdulla Jihad told Minivan News at the time that the funds were to be used to “manage cash flow” as revenue was lower than expected.

A large portion of forecast revenue is expected later in the year, he said, adding that shortfalls are currently plugged through sale of treasury bills (T-bills).

According to the Maldives Monetary Authority (MMA), the total outstanding stock of government securities, including T-bills and treasury bonds (T-bonds), reached MVR18.4 billion (US$1.1 billion) at the end of May, representing an annual increase of 36 percent.

The forecast for government income in this year’s record MVR24.3 billion (US$1.5 billion) budget is MVR21.5 billion (US$1.3 billion).

The projected revenue includes MVR3.4 billion (US$220 million) anticipated from new revenue raising measures, including revisions of import duty rates, the introduction of a “green tax”, acquisition fees from investments in special economic zones (SEZs), and leasing 10 islands for resort development.

The MMA’s monthly economic review meanwhile revealed that gross international reserves increased by 65 percent in May compared to the corresponding period in 2014 and stood at US$703.7 million, “of which usable reserves amounted to US$229.7 million.”

“During the review month usable reserves also registered increases in both monthly and annual terms by 12 percent and 41 percent, respectively. As for gross reserves in terms of months of imports, it rose both in monthly and annual terms and stood at 4.2 months at the end of May 2015.

Tourism and fisheries

The economic review noted that tourist arrivals declined by three percent in April compared to the same period in 2014, reaching a total of 102,242 guests.

“The annual decline in arrivals was contributed by the significant decline in tourist arrivals from Europe,” the MMA observed.

“In April 2015, total bednights registered a decline of 7 percent in annual terms, as the average duration of stay declined from 6.2 to 5.9 days. Partly reflecting the decrease in bednights, the occupancy rate of the industry declined to 73 percent in April 2015 from 80 percent in April 2014.”

In its quarterly economic bulletin, the central bank noted that despite a three percent growth in tourist arrivals in the first quarter of 2014, tourist bednights declined by three percent “owing to the fall in average stay of tourists from 6.3 days in Q1-2014 to 6.0 in the review quarter.”

Tourism receipts also decreased by four percent in the first quarter compared to the corresponding period in 2014.

“On the supply side, the operational capacity of the tourism industry increased by 3% when compared with Q1-2014 to reach an average of 27,827 beds. Reflecting this and the decline in tourist bednights, the occupancy rate of the industry fell to 79 percent in Q1- 2015 from 84 percent in Q1-2014,” the bulletin stated.

The volume of fish purchases meanwhile decreased to 6,134.6 metric tonnes in April, registering an annual decline of 11 percent.

“In May 2015, both the volume and earnings on fish exports declined in annual terms by 35 percent and 12 percent, respectively. This was mainly owing to the decrease in the volume and earnings of frozen skipjack and yellowfin tuna exports,” the economic review revealed.

In other sectors, the MMA noted that construction activity “continued to expand and remained robust as indicated by the annual increase in construction-related imports and increased bank credit to the sector during Q1-2015.”

“Activity in the wholesale and retail trade also grew, as indicated by increased imports by the private sector (excluding tourism) and bank credit to the sector.”

The rate of inflation in Malé meanwhile accelerated to 1.7 percent in April from 1.1 percent in March.

“The pick-up in inflation during the month was mostly contributed by the growth in fish prices and prices charged for housing rent,” the central ban explained.

“The monthly percentage change in the [Consumer Price Index] increased in April 2015. This was mainly due to the rise in fish and cigarett e prices. Cigarette prices rose during the month due to the increase in the import duty levied in April 2015.”


Maldivian economy grew by 8.5 percent in 2014, says MMA

The Maldivian economy grew at 8.5 percent in 2014, the central bank has said. Growth was driven by a solid increase in tourist arrivals and the strong recovery of the construction sector.

The government’s fiscal performance in 2014, however, was weaker than anticipated due to shortfalls in revenue and overspending on recurrent expenses, the Maldives Monetary Authority said in its Annual Economic Review.

The International Monetary Fund (IMF) in March provided a much lower figure of five percent for economic growth, and highlighted the need for improved data collection on macroeconomic statistics.

According to the MMA, the government’s total debt reached 65 percent of GDP in 2014, while the fiscal deficit stood at MVR1.6billion or 3.4 percent of GDP, higher than the estimated MVR1.3billion or 2.8 percent.

The tax authority has meanwhile collected MVR951.3million (US$61.9million) in tax revenue in March. The figure is 2.7 percent higher than forecasted as several tourism companies had paid late land rents and fines after the Maldives Inland Revenue Authority (MIRA) froze the accounts of some 20 businesses in April.

MIRA has received MVR 5.61 billion (US$ 360 million) in revenue this year, an increase of 27.3 percent compared to 2014. The tax authority, however, did not state if revenue collection meets targets.

Robust growth

Some 1.2million tourists brought in an estimated US$2.6 billion to the Maldives in 2014. Arrivals grew by 7 percent and was largely driven by arrivals from China. European arrivals recorded a marginal growth due to a decline in Russian tourists.

The growth in bed nights stood at 4 percent – slight lower in magnitude than the growth in arrivals – reflecting the decline in average stay from 6.3 days in 2013 to 6.1 days in 2014. The downward trend in average stay, which has become more marked since 2009, is due to a shift in the composition of inbound tourist markets towards countries such as China, the MMA said

Meanwhile, total tourist revenue remained buoyant and grew by 13% (20% growth in 2013) to reach an estimated US$2.6 billion during 2014. The significant difference between the growth in revenue and bednights may reflect the increase in tourist expenditure on high-end services in the industry, the MMA said.

Airline movements by international carriers, such as Mega Maldives, Cathay Pacific and budget airlines such as Tiger Airways, also increased during the year, and facilitated the growth in tourist arrivals.

Three new resorts were opened, increasing total registered number of resorts in the Maldives to 112. Registered guesthouses reached a total of 216. Some 80 new guesthouses were registered at tourism ministry, but only a total of 95 in operation.

The construction sector bounced back from two consecutive years of negative growth. The revival was mainly due to the ease in obtaining construction materials after India waived restrictions on the export of stone aggregate to in March 2014. This allowed the resumption of large-scale public sector infrastructure projects and major housing projects, the MMA said.

The fisheries sector declined by 6 percent,  following a strong growth of 8 percent in 2013, due to a decline in fish catch, and also because of the significant dip in international tuna prices.

The fishing industry in the Maldives represents about one percent of GDP in 2014. It accounted for 10% of total employment in 2010. Export revenue from fish and fish products accounts for 47 percent of merchandise exports.

Poor fiscal performance 

The government collected some MVR14.5billion in revenue in 2014. But total revenue fell short of the target as some of the new revenue measures planned in the budget did not materialize.

The implementation of of a T-GST hike – from 8 percent to 12 percent – was delayed from July 2014 to November 2014; tourism tax, initially anticipated to be collected throughout the year was only collected from February to November.

There was a “considerable shortfall” from the lease period extension fee collected during the year. The lump-sum resort acquisition fee from the 12 new islands planned to be leased out for resort development did not materialize either.

As a result, total revenue was MVR351.0 million less than budgeted and amounted.

The total expenditure of MVR16.5 billion was slightly lower than budgeted, but only because the government stopped spending on development projects and redirected funds to financing recurrent expenditure.

In the banking sector, the main area of concern continued to be credit risk, as indicated by the high level of poor-quality loans. Non-performing loans “remain a concern with a ratio of 16 percent,” the MMA said.

Gross international reserves increased to US$614.7 million at the end of the year. Out of this, usable reserves accounted for US$143.9 million. The “marked expansion” owed to the improvement in foreign currency receipts of the government, the MMA said.




Business activity increased in first quarter

Business activity in the tourism, construction, wholesale, and retail sectors increased during the first quarter of 2015, according to a regular survey by the central bank.

The Maldives Monetary Authority’s (MMA) conducted its quarterly business survey from March 25 to April 7 with respondents from 77 enterprises.

“Looking ahead, business in all sectors except for the tourism sector, are predicting further improvements in business activity in Q2-2015 when compared to Q1-2015,” the report states.

“With regard to the current level of employment, businesses across all sectors indicated an increase in Q1-2015 compared to Q4-2014.”

Businesses in all sectors, except tourism, anticipated increases in hiring in the next quarter, “reflecting the optimism shown by majority of businesses in this quarter.”

The majority of businesses in the wholesale and retail trade sector and construction sector reported no price changes in the first quarter compared to the last quarter of 2014, while businesses in the tourism sector reported an increase.

“Looking ahead, majority of businesses in all sectors expect prices to remain the same except for the tourism sector, where prices are expected to decline,” the survey found.

“As for business costs, businesses across all sectors experienced an increase in all labour-related costs and other input costs (except for the construction sector which reported a decline) in Q1-2015 when compared to Q4-2014. Looking ahead, all sectors—except for businesses in tourism sector which expects a decline in other input prices—anticipate a further increase in all business costs in Q2-2015 as well.”

Tourism businesses meanwhile expect total revenue, resort bookings, and average room rates to decline in the next quarter with the end of the peak season.

Resorts and hotels reported “insufficient demand, labour market difficulties, such as shortages in both skilled labour and local labour, and the weaknesses in the regulatory framework” as factors that limit growth.


Treasury bills and bonds rise to MVR17.6 billion, MMA reveals

The Maldives Monetary Authority (MMA) has revealed that the outstanding payments for treasury bills and bonds had risen to MVR17.6 billion at the end of 2014.

According to the Monthly Economic Review of December 2014, published yesterday (February 3), stocks of government securities comprising T- bills and T-bonds increased 22 percent and 55 percent, respectively, comparing monthly and yearly terms.

“As for the outstanding amount of T-bonds, it increased significantly in both monthly and annual terms and reached MVR6.4 billion compared to MVR3.1 billion recorded in November 2014,” the review stated.

The MMA’s economic review revealed that 103,744 tourists arrived in the Maldives in December 2014, which is 1 percent lower than the arrivals of the same period in 2013, due to the “decline in arrivals from Asia and Europe”, but an increase of 16 percent compared to November 2014.

Among Asian countries, China contributed the most tourists, with 363,000 of the 1.2 million visitors in 2014 – a year-on-year rise of 9.6 percent.

It was also noted that the occupancy rate of the Maldivian tourism industry as a whole decreased by two percent, from 76 percent in December 2013  to 74 percent in December 2014 due to the decrease in total bed nights by 3 percent, and the average duration of stay to 6 days.

Comparison of figures from November and December of 2014 suggest that there was a 12 percent increase in international reserves and a 17 percent increase in state revenue, leaving international reserves at US$614.7 million by the end of last year.

Reserves held at the end of November equated to 3.3 months of imports, compared to 2.3 months recorded at the end of November 2013, said the MMA.

“The increase in total revenue during December 2014 was largely due to a 32% growth in tax revenue (mainly contributed by the increase in T-GST receipts),” stated the monthly review.

Trade balance worsened by 42 percent in December 2014 compared to corresponding the same period in 2013, as imports rose by 34 percent while exports only increased by 11 percent.

“The growth in imports was mainly due to the increase in imports of transport equipment, while the growth in exports can be attributed to the rise in re-exports”.

According to a statement from Maldives Customs Services on January 14, imported goods in 2014 amounted to MVR30.7 billion – a 22 percent increase compared to 2013.

Customs figures also showed that the decline in exports saw the total value of goods leaving the Maldives in 2014 valued at MVR2.24 billion, compared with MVR2.56 billion in 2013.


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Bank of Maldives introduces Islamic banking services

With additional reporting by Mohamed Said Fathih and Ismail Humaam Hamid

The Bank of Maldives (BML) has introduced Islamic Banking Services today (January 22).

The service inaugurated by Minister of Islamic Affairs Dr Mohamed Shaheem Ali Saeed will be operated under the name ‘BML Islamic’ which will offer its personal and business customers with deposit and financing products.

“This is a big and proud day for our Bank,” said BML’s CEO and Managing Director Andrew Healy. “Today we start to provide alternatives to those who wish to strictly follow Islamic principles in their banking.”

“We look forward to rolling out a broad range of products and services – for both personal and business customers – over the next two years”.

Islamic banking and capital market services – compliant with Islamic Shariah – were introduced in the Maldives in 2011, with the opening of the Maldives Islamic Bank.

The Capital Market Development Authority began reporting on the Islamic Capital Market for the first time last year, while Maldives Monetary Authority Governor Dr Azeema Adam said that the industry’s potential was still being realised.

“One of the reasons for the phenomenal growth of Islamic finance is the perception that it is more ethical, compared to conventional finance, which is traditionally viewed as predatory when needed,” Azeema told the Maldives’ first Islamic banking conference last September.

BML CEO Andrew Healy

The new BML service will be provided by existing branches of the bank but Islamic bank accounts and finances will be “fully segregated from the rest of the Bank’s Services”, explained a BML press release.

“ATMs and card machines and will be fully Shari’ah-compliant, with Islamic accounts,” the statement continued, while Wadi’ah accounts can now be opened at any BML branch.

Prominent Islamic scholars have expressed their support for the move, with Dr Aishath Muneeza, Sheikh Fayyaz Ali Manik, and former Islamic minister Dr Abdul Majeed Abdul Bari all contributing to BML’s promotional campaign.

“I believe this is a service which has been much needed for the people of Maldives. This allow lot of people across the country to go about their financial transactions as per Islamic Sharia,” said Sheikh Fayyaz.

Islamic minister Shaheem today described the move as “great news for many Maldivians”, saying that “BML’s commencement of Islamic financial services, to coincide with the day Maldives embraced Islam, is a memorable occasion”.

Other recent changes to services provided by the national bank included 22 state-of-the-art ATMs across Malé in November as well as the bank’s first US dollar ATM at its main branch the following month.

Related to this story

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Expansion of economic activity in third quarter driven by tourism sector: MMA

Expansion of domestic economic activity in the third quarter of 2014 was “driven by the sustained growth of the tourism sector,” according to the Maldives Monetary Authority’s (MMA) quarterly economic bulletin.

“Total tourist arrivals to the country increased to 299,491 in Q3-2014, growing by 7 percent when compared to the corresponding quarter of last year while bednights grew by 5 percent,” the bulletin stated.

The central bank explained that the “difference in the growth rate of arrivals and bednights is explained by the fall in the average duration of a tourist visit from 6.0 days to 5.8 days during the period.”

Tourism receipts are meanwhile projected to reach US$594.9 million in the third quarter, an annual growth of 20 percent.

“In Q3-2014 the average operational bed capacity of the industry also increased by 4 percent when compared to Q3-2013 and rose to 26,921 beds, contributed by the opening of three resorts and thirty-three guesthouses during the period,” the bulletin revealed.

“Despite the increase in the operational bed capacity of the industry, the occupancy rate of tourism accommodation facilities remained relatively unchanged at 70 percent when compared to Q3-2013, owing to the higher increase in bednights.”

However, tourist arrivals in November declined by 5.1 percent compared to the same period last year, according to statistics from the tourism ministry.

While tourist arrivals reached 89,778 guests last month, 94,584 arrivals were recorded in November 2013, with arrivals from Europe and the Asia Pacific region down 6.8 percent and 4.6 percent, respectively.

Industry insiders had previously noted that a recent increase in T-GST alongside the continuation of Bed Tax in November had contributed to fewer bookings.

The Russian market meanwhile continued to decline due to the weakening of the Russian economy, with Russian arrivals declining by 31.3 percent to 5,273 arrivals in November from 7,675 arrivals in November 2013.

“Arrivals from the country declined at an annual rate of 7 percent in Q3-2014, compared to a decline of 5 percent in arrivals in Q2-2014,” the bulletin stated.

The number of Chinese tourists – representing the single largest market share with 27 percent – declined by 4.9 percent.

However, total tourist arrivals from January to November increased 7.9 percent from 1,020,190 guests in the corresponding period last year to 1,101,113 in 2014.

The MMA’s quarterly bulletin observed that the Chinese market was the “single major contributor to arrivals growth” in the third quarter of 2014, increasing by 8 percent compared to the previous quarter.

“Meanwhile, arrivals from Europe (which constitutes over half of total tourist arrivals) registered a marginal increase of 2 percent in Q3-2014 compared to a 6 percent growth in Q2-2014, contributed mainly by the increase in arrivals from Germany and Spain,” the bulletin noted.

“While the UK market (the largest market from Europe) posted a sluggish performance owing to weak economic conditions, the German market, being the second major source market from Europe, registered a 7 percent growth (12% growth in Q2-2014). Both Germany and UK each accounted for about one-fifth of European arrivals during Q3-2014.”

Other sectors

The central bank noted that the fisheries sector “continued to be adversely affected by falling tuna prices that deteriorated further in the international market during the review quarter.”

The volume of fish purchased from local fishermen by fish processing and exporting companies in the third quarter registered an annual decline of 24 percent, the MMA revealed.

“Additionally, the poor performance of the fisheries sector was also reflected by the fall in both the volume and earnings of fish exports in Q3-2014, by 31 percent and 21 percent, respectively,” the bulletin explained.

The construction industry “continued to strengthen, as indicated by the strong annual growth in construction-related imports and commercial bank credit to the sector.”

Reflecting a 17 percent annual increase in commercial bank credit to the wholesale and retail sector as well as a 13 percent annual growth in private sector imports, the bulletin noted that trade activity also improved in the third quarter.

The rate of inflation in the capital meanwhile decelerated from 3.1 percent in the second quarter to 2.5 percent in the third quarter, “contributed primarily by the slower growth in food prices.”

“Meanwhile, inflation excluding the volatile fish prices also decelerated during the quarter at the same rate as total inflation, explaining the relatively stable fish prices during the year as a whole,” the bulletin observed.

Overall inflation remained “steady and low” at 5.0 percent, the central bank noted.

“However, food inflation registered a much lower rate of 0.2 percent in the review quarter, compared to 3.2 percent in Q2-2014 and 7.4 percent in Q3-2013.

“A large decline in prices was noted for vegetables, particularly onions, and can be attributed to the significant decline in onion prices in India, where 89 percent of onions are imported from. The slowdown in domestic food prices also reflect the easing of global food prices, which have been declining for the most part of 2014.”

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MMA to conduct survey on spending by Maldivians traveling abroad

The Maldives Monetary Authority (MMA) will be conducting its annual survey on spending by Maldivians traveling abroad from December 25 to 31.

The ‘Maldivians Travelling Abroad Survey’ survey will be conducted at the arrival hall of the Ibrahim Nasir International Airport (INIA), the central bank explained in a press release yesterday.

“The survey will mainly gather information about Maldivians spending money abroad for various purposes,” the press release stated.

“Among the information gathered will be the main purpose of the trip, the travel destination, ticket price, cost of food and accommodation, cost of medical treatment, travel expenses, and overall expenses for the whole trip.”

A statistical report would be compiled based on the collected information, it added.

The MMA noted that name, address, and other personal information would not be gathered for the survey and urged cooperation from all Maldivians returning to the country during the survey period.

Last year’s survey – conducted among 65 percent of locals traveling abroad – revealed that Maldivians spent MVR2.9 billion (US$191 million) overseas in 2013.

Maldivians spent US$70 million on medical treatment, US$64 million on holiday expenses, and US$47 million on education, the survey found.

Of the 6,184 respondents, 2,597 people traveled to neighbouring Sri Lanka, followed by 2,473 visitors to India, and 618 visitors to Malaysia.

Of those who traveled to Sri Lanka, holidaymakers spent US$1.7 million while other spent US$2.2 million for medical treatment.

Similarly, Maldivians who traveled to India for medical purposes spent US$2.1 million.

While Maldivians who sought medical treatment in Malaysia spent US$496,872, Maldivian holidaymakers spent US$714,408.

The survey also found that Maldivians spent US$48 million on airfare during 2013.


MMA extends deadline for submissions for bank note designs

The Maldives Monetary Authority (MMA) has extended the deadline of design and layout submissions for redesigning Maldivian bank notes from November 30 to December 31.

The authority had previously received more than 60 submissions from 55 individuals but decided to restart the process after the designs were deemed unsuitable for bank notes.

An MMA official said today (November 20) that the authority announced the November 30th deadline with new guidelines but decided to extend it after consulting with various artists.

The official also explained the selection process in which six of the best proposals will be presented to the relevant officials who would then select a further three who would subsequently playing a vital role in a committee designing the notes.

The team is to design seven bank notes in total with the six going into current circulation and a further special commemorative design made celebrate the 50th anniversary of Maldivian independence.


Tourist arrivals register 10 percent growth in three quarters of 2014

Tourist arrivals in the first three quarters of 2014 registered a 10.1 percent growth compared to the same period last year, reaching a total of 901,004 guests by the end of September, the Ministry of Tourism has revealed.

Visitors from Asia and Pacific countries accounted for 50 percent of all arrivals during the first nine months of the year.

However, the ministry noted in a statement last week that “the pace at which arrival from the region was increasing have slowed down since June.”

“While the region enjoyed a robust growth of 22.3 percent at the end of first two quarters of 2014, growth rate slowed down to 17.3 percent by the end of the third quarter of 2014,” the ministry explained.

“The region injected 53,454 tourists to the total arrivals to the country during the month of September, summing up the total arrivals from the region to 450,296 by the end of the period from January to September 2014.”

China (31.8 percent), India (3.5 percent), Japan (3.1 percent) and South Korea (2.7 percent) were the leading markets from Asia and the Pacific region, the ministry revealed, with Australia (1.6 percent) “emerging as a potential market from this region.”

“The Chinese market, registered a negative growth (-1.7 percent) for the first time in September 2014 since becoming the number one market in 2010. However, the market ended up with a healthy 14.8 percent growth at the end of the period from January to September 2014 with a total of 286,838 tourists.”

Tourist arrivals from Europe meanwhile increased 1.6 percent in the first three quarters compared to the same period in 2013, reaching 386,914 visitors.

“In terms of individual markets from Europe, leading markets were Germany (7.7 percent), the United Kingdom (7.4 percent), Russia (5.7 percent), Italy (4.8 percent) and France (4.2 percent),” the ministry revealed.

Arrivals from the Americas registered a strong growth of 25.2 percent in September with double digit growth rates recorded from all major markets in the region.

“With just a couple of hundred tourists less than that of Americas, Middle East followed closely behind bringing in a total of 28,641 tourists at the end of the period from January to September 2014 accounting for 3.2 percent of all arrivals during the period,” the ministry noted.

“This region also posted a heavy growth of 20.5 percent during the month of September 2014 ending the period with a robust 16.9 percent growth.”

Meanwhile, one new resort – Loama Resort Maldives on the island of Maamigili in Raa Atoll – and seven new guest houses opened during September.

“With these new additions, the total number of registered establishments reached 488 with 30,893 beds at the end of September 2014,” the ministry noted.

“While the total number of registered resorts increased to 112 with 23,917 beds and guest houses increased to 195 with 2,723 beds, number of hotels and safari vessels remained at 18 and 163 with 1,542 beds and 2,711 beds respectively by the end of September 2014. At the end of this period on average there were 292 establishment with 26,905 beds in operation.”

Statistics show that total bednights during the period was 5.4 million, with an average occupancy rate of 74.6 percent – an increase of 1.6 percent compared with the same period in 2013. Average duration of stay remained steady throughout the January to September period.

Quarterly economic bulletin

The Maldives Monetary Authority’s (MMA) quarterly economic bulletin released last week meanwhile observed that the “favourable growth in the tourism industry during the year suggests that the arrival of a million tourists during one calendar year is likely to be achieved in 2014 as well.”

Reflecting the growth in bed nights, total tourism receipts grew by an annual 12 percent during the first six months of 2014 and totalled US$1.3 billion,” the central bank revealed.

While the market share of Europe fell from 51 percent in the first half of 2013 to 47 percent in the same period this year, the MMA noted that arrivals from Germany and the UK increased.

In particular, the sustained growth of arrivals from UK, with a market share equivalent to 8 percent, reflects its economic revival to pre-crisis levels,” the bulletin suggested.

“Other markets in Europe, however, indicated sluggish or negative growth in tourist arrivals, contributing to the overall marginal increase in arrivals from Europe.”

The MMA also observed that in the past five years “the development of guesthouses as a low cost accommodation option for tourists in local inhabited islands has gained significant momentum.”

The authority noted that the number of guest houses in the industry is now over 2,400

“As at the end of June 2014, the number of registered beds in the [guest house] industry is recorded to be over 2,400. While the bed capacity of guesthouses accounted for a mere 2 percent of the bed capacity of the industry as a whole in 2010, it has now come to represent 8 percent of the total bed capacity in tourism establishments,” the bulletin stated.