Industry members who attended the inaugural Travel Trade Maldives in Malé last week had mixed opinions on whether the Maldives should rethink its position as an exclusively luxury destination in light of price wars resulting from room oversupply.
The debate rises from the increasing number of guesthouses and Airbnb accommodation providers while national occupancy rates remains low. It was 69 per cent in 2016, a drop of one per cent from 2015.
Peter Gremes, general manager at Reethi Beach Resort, said: “The Maldives used to charge horrendously high rates three years ago and tourists were coming; resorts and hotels were full. But average room rates started to drop from two years ago... the destination should also look at attracting the middle income segment."
Over water bungalow in the Maldives
External factors contributing to the price pressure include competition from destinations such as Phuket, Bali, Mauritius and Hawaii as well as the appreciation of the US dollar (which the Maldives trades in) against the euro, making the destination more expensive for its traditional markets in Europe.
Amid such pressures, an inbound tour operator, Resort Life Travel head of reservation, Yves Laurrice Conti, maintains that the destination should keep its luxury branding or risk diluting its image, which will be difficult to recover from.
Shabeer Ahmed, founder, Sunland Group, is also confident of the Maldives' reputation as a luxury destination, and urges a strategy to gradually increase tourism numbers instead of aiming for a high level in the short term.
Last year, tourist arrivals totalled nearly 1.3 million. In 2020, the Maldives wants to attract two million tourists annually and increase tourism revenue to US$3.5 billion.
Some trade players however do not that believe that the destination’s luxury branding and existence of affordable accommodation are mutually exclusive.
Azhana Shafeeq, marketing executive at Maldives marketing & PR Corporation, points out that the Maldives' continued promotion as a luxury destination has not discouraged guesthouses and hotels on local islands to participate in B2B and B2C travel fairs.
Rial Hossain, sales executive at Plumeria Maldives Hotel, maintains that the Maldives is still generally perceived as an expensive destination. Still, the resort on Thinadhoo Island is being marketed as “affordable luxury” and this has proven successful in attracting millennial travellers, especially from Asian markets, he told TTG Asia.