The Maldives’ tourism began in the early 1970s with a clientele of almost exclusively Europeans. As it blossomed over the decades into an a premier high-end destination, Europe remained the main intbound market and the industry was designed to cater to affluent visitors from the continent.
The composition of tourist arrivals started shifting in the wake of the 2008 global economic recession. With sharp downturns in developed economies, tourists stayed put or preferred travelling to destinations closer to home. Arrivals to the Maldives plummeted in 2009, declining -4% compared to the previous year.
A decade ago, the UK remained the top source market followed by Italy and Germany. But in a sign of the shifting sands, the Chinese market overtook France and Russia and moved up to 4th position with a market share of 9.2%.
The rise and fall of the Chinese market
With its rapid urbanisation, rising disposable incomes, and relaxation on restrictions on travel, China has become the number one outbound tourist market in the world.
According to the annual Maldives Visitors Survey, beach was the key motivator for Chinese holiday-makers who came to the Maldives. The majority of travellers were honeymooners and those seeking rest and relaxation. Over 70 percent of Chinese visitors were between 25-34 years.
After a sharp decline following the 2004 tsunami, the Chinese market saw steady growth over the following years. Direct flights to major Chinese cities were introduced in 2010 and the number of arrivals increased exponentially. Its market share went up dramatically from 4.4% in 2006 to 15% in 2010, with a whopping growth of 96% compared to the previous year.
China became the first non-European country to be the top leading market to the Maldives with a total of 118,961 tourist arrivals, outperforming the UK, Germany and Italy. The pattern continued over the following years with robust growth in Chinese arrivals offsetting a decline of European visitors as Western economies recovered from the financial crash.
But the Chinese market peaked in 2014 with about 364,000 arrivals – representing a market share of 30 percent – and lost its momentum in 2015, recording a negative growth of -1.1% for the first time. The drop continued through 2016 and 2017, losing an average of 2.7% of the market shares each year. Arrivals from China declined by -7.6% in 2018.
Despite the steady decline since 2015, China remained at the top with a market share of 18.1 percent. There have been signs of a reversal of the downward trend this year. Chinese arrivals recorded sharp increases for the Chinese New Year during February. Positive growth was also recorded in June. As of October 2019, Chinese arrivals have grown 1.8 percent compared to the same period in 2018, the first upward tick in four years.
India is one of the fastest growing outbound tourism markets in the world. The UNWTO estimates that India will account for 50 million tourists by 2020. Despite a slowdown due to rupee fluctuations, the Indian outbound numbers have been growing at an average annual rate of 10-12 percent over the last seven years. This growth is attributed to affordable air travel, a growing consumption-driven economy, and a large and increasingly affluent middle class. Medical, wellness, adventure and sports tourism as well as increased smart phone usage and internet penetration have also been identified as key factors.
Recognising the potential of the Indian market, more than 70 tourist organisations from around the world have set up local offices in India for destination marketing.
India is the Maldives’ closest neighbour and ally but up until recently did not represent a sizeable portion of tourist arrivals. A decade ago, the number of Indian visitors who made the short trip south stood at about 16,000 a year.
After gradual growth over the years, a significant milestone was reached in July 2019 when India became the second largest market for the Maldives tourism industry with a 100 percent growth rate in the first half of the year. The 82,140 Indian holiday-makers recorded by the end of June represented a 10 percent market share. The figure was close to the 90,474 Indian tourists who visited during the whole of 2018. Some 130,617 Indian tourists have visited the Maldives by the end of October 2019.
Industry experts attribute this surge to the popularity with Bollywood celebrities as well as the introduction of low-cost direct flights to the Maldives. The majority of Indian visitors are honeymooners travelling between April and May with a surge in December.
Tapping into this promising market, the Maldives Marketing and Public Relations Corporation has been conducting roadshows in major Indian cities such as Bangalore, Mumbai, Kolkata, New Delhi and Chandigarh.
USA – tourists from the farthest corner of the world
According to Google, Maldives was the number one searched destination in the United States. The US is one of the fastest growing markets for the Maldives, making its way to the top ten list for the first time in 2016. Since then, the US market has seen double-digit growth over the years. In 2019, American arrivals increased by 28.6 percent, up 3.1 percent compared to last year. The US remains the 8th largest source market to the Maldives.
The US outbound travel saw a growth of 170% between 1996 and 2016. Over the following two years, more Americans travelled outside the US than ever before, spurred by a growing economy, favourable exchange rates, and high consumer confidence. According to data published by the National Travel and Tourism Office, the number of outbound travellers spiked by 6 percent last year, reaching 93 million. Of those, 45 percent flew to overseas destinations. Travellers to European countries increased by 12 percent. Outbound travel to Oceania, South America and Asia also increased.
Industry experts attribute this growth to several factors including tax reform measures, faster wage growth, high consumer confidence and low unemployment. The US dollar is still relatively strong compared to currency in popular destinations around the world, increasing purchasing power. Surveys conducted by US travel agencies found that people who travel to experience culture is increasing, attributed to ease of travel and access to information. Holiday snaps and reviews on social media play a large role in influencing where people travel to as well.
This year, the top three regions for US outbound travel was Europe, the Caribbeans and Asia. Tourists travelling to Asian countries increased by 4.9 percent compared to last year.
The Israeli market has also seen steady uptick, recording a growth of 40.6 percent compared to the previous year. Arrivals from Taiwan increased by 25.7 percent compared to last year. The Korean market also saw an increase of 9.8 percent, as well as Japan with 8.3 percent increase in arrivals this year.
By the end of October, the number of tourist arrivals to the Maldives reached 1.4 million, up 15 percent compared to last year. With the opening of new resorts and the expansion of the airport, this number is expected to further increase in the coming years.