Hotels in the Maldives are reporting weaker performances as a result of a room oversupply aggravated by a lack of destination marketing.
While total arrivals in the destination had risen 4.2 per cent in 2016 over 2015, achieving a record high of 1.3 million visitors, hotel occupancies fell to 64.2 per cent from 67.4 per cent in 2015.
According to latest STR Global figures, revPAR for hotels there slipped 12.8 per cent in 3Q2016 over the same period in 2015.
Not helping matters is the continual expansion of accommodation inventory. The number of resorts rose from 108 in 2015 to 117 last year while the total number of beds in all accommodation units – resorts, hotels, guesthouses and safari boats – went up to 30,544 from 28,276 in 2015.
Early last month, New York-based Dream Hotel announced plans to build an integrated resort across three islands, with over 500 villas to be ready for occupation in 2019/2020.
The Maldives Association of Tourism Industry (MATI), the main body of hotel owners, at its annual general meeting last month urged the government to intensify destination marketing activities to reverse hotels’ fortunes. But it was a call long made by inbound travel operators.
MATI chairman Mohamed Umar Manik, who is also the owner of Universal Group, the largest group of resorts in the destination, lamented that yield was not growing in tandem with arrival figures.
He pointed to a 4.4 per cent decline in Tourism Goods and Services tax receipts last year. Industry officials explained that the decline was due to shorter stays and lower tourism spend.
With these declines in view, industry players have expressed dismay over a cut in state marketing budgets at a time when more of such activities are in fact needed.
Abdulla Ghiyas, president of the Maldives Association of Travel Agents & Tour Operators, said the government’s 2017 destination marketing budget had been pruned to just US$2 million from the original US$8 million. Government officials have declined to comment on this.