Despite increased pressure on the resort market due to a large influx of new supply, in its market outlook for the Maldives, Horwath HTL said foreign tourist arrivals have grown at a 10-year compound average annual growth (CAAG) rate of 8.1 per cent from 2008 to 2018.

Though 2018 recorded an increase in foreign arrivals to 1.48 million, YoY growth was at a slower pace of 6.8 per cent due to several factors, including a downturn in the Chinese market and increased political turmoil, it added.

Horwath HTL highlighted the slight shift in demographics in recent years following a decline in Chinese arrivals and an increase in key European arrivals. In 2018, Europe accounted for almost 49 per cent of total foreign arrivals due to a robust increase in arrivals YoY from Italy (18.5 per cent), Germany (4.8 percent), and the United Kingdom (10.2 per cent), it said.

“Placement of countries in the top ten have mostly remained the same compared to 2017, except that the USA overtook Japan to claim eighth place on the back of a larger leap in YoY arrivals. Additionally, Australia replaced South Korea in the tenth place after significant growth in tourist arrivals by about 36 per cent YoY,” the report read.

2018 saw highest supply increase

Horwarth HTL stressed that hotel bed capacity saw the greatest increase YoY in 208, growing by 21 per cent, with the number of registered beds for 2018 totalling to 43,025.

Kaafu Atoll, comprising both North and South Male Atolls, has consistently accounted for the largest share of beds in a single atoll in the Maldives (40 per cent in 2017). The second most concentrated single atoll by bed capacity in 2017 was Alif Atoll (Ari Atoll). Alifu Dhaalu (South Ari) Atoll accounted for about 12 per cent of beds whilst Alifu Alifu (North Ari) Atoll accounted for another eight per cent.

Whilst Baa atoll has become popular for resort development given its UNESCO Biosphere Reserve tag, other atolls that are fast developing include Raa atoll, Dhaalu atoll, and Haa Alifu Atoll. In 2017, bed capacity YoY increased by 99 per cent, 52 per cent, and 48 per cent, respectively.

“With the abundance of resorts in Baa atoll, developers are now looking at its neighbour to the north – Raa atoll. Due to its relatively untouched marine life, developers are now flocking to the atoll for its interesting underwater topography and marine life,” the report read.

Luxury resorts away from Male perform better

According to Howarth HTL, ultra-luxury resorts (above USD 1,000 per night) situated away from Male atoll have historically achieved higher rates than those within Male atoll, albeit at the expense of lower occupancy levels.

“Higher rate premiums are often justified by the more exclusive location of resorts further away from Male atoll, as well as the less polluted waters when situated further away from the capital city of Male,” the report read.

“Rate-wise, since 2015, other atoll resorts have achieved higher rate premiums over Male atoll resorts.”

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