The Maldives, known for its high terminal universe category resorts, popular among the rich and celebrated is situated in South West of Sri Lanka on the Equator comprises of 1,190 tropical islands stretching over an country of 90,000 sq Km. With an norm of 30 grades Celsius, submerged coral gardens, white sandy beaches, turquoise bluish lagunas, crystal clear H2O and 664 Km of coastline ; the Maldives offers impossible natural beauty and remote tropical island experience to its visitants. An array of celebrations and activities can be found on the islands including superb fishing, universe category breaker, shopping, plunging and snorkelling, giant and dolphin observation and much more.There are 97 luxury resorts established in the Maldives presently under operation and a farther 30 resorts are been developed in add-on to 145 campaign vass and metropolis hotels already runing in the state. One resort one island is the policy that has been maintained in the Maldives. Each of them is self sustained supplying maximal privateness to the invitee.Tourism is the chief industry in the Maldives and contributes about 32 % to its GDP – a figure which could easy lift to 70 % if indirect sectors associating to touristry are taken into history.
Tourism generates a 5th of Maldives entire employment and 70 % of its foreign exchange net incomes. It besides accounts for 30 % of the Government ‘s gross. Over the last five old ages tourer reachings to the Maldives have been increasing invariably except for 2005 as the part was badly devastated by the tsunami.
2007 saw a record twelvemonth for Maldives Tourism with a 12.3 % rise ( 3.8 % higher so expected ) , a important accomplishment signalling the industry was get bying good with the long permanent impacts of the tsunami.
However over the last 2 old ages the fiscal crisis in Europe and the remainder of the universe affected the Maldivian touristry industry enormously entering a 4 % bead in entire tourer reaching.The twelvemonth 2010 looked more optimistic for the Maldivian touristry industry as marks of economic systems bouncing in the signifier of increased tourer reaching. Maldives recorded a 21 % addition in reachings and an 8 % addition in the European section.It has been identified that Maldives touristry will be confronting many challenges particularly from adult male made crises such as the economic recessions and the environment debasement.Recessions can take to a autumn in disposable income of consumers ensuing in a lessening in ingestion of luxury goods such as vacations.
When consumers becomes progressively pessimistic about their hereafter in footings of decreased occupation security and increased fiscal duties they minimizes passing dramatically declining the economic state of affairs further.the environmental impact of touristry enlargement can endanger the really basic experience that is being sold, the distant tropical islands with coral gardens and a huge assortment of species busying them. Activities such as snorkel diving, scuba diving and reef walking, H2O athleticss activities where power boats are used extensively can endanger the really coral reef that sustain non merely an ecosystem of multi species but the barrier to erosive impacts of moving ridges on the resort islands. Without such natural barrier the beautiful white sandy beaches the Maldives is known for will melt away replacing it with a adult male made barrier altering the really image of the islands.
To run into the challenges face by the Maldives touristry industry, sellers are inventing schemes heightening the image and develop merchandises integrating the altering demands, values and consumer behaviors while at the same time prolonging the touristry industry.
Table of Contentss
Executive summary 1Table of Contentss 31.0Introduction 41.1 Restrictions 42.0 Over position of the industry 52.1 Merchandise 52.2 Pricing 62.
3 Topographic point 62.4 Promotion 62.5 Distribution 62.6 Competition 73.0 Key findings 83.1 Swot analysis 83.
2 Current analysis of tourer reachings 93.3 Other findings 94.0 Challenges in the industry 114.1 Impact of planetary economic recession 114.2 Impact of environmental debasement 125.
0 Proposals to run into the challenges. 146.0 Decision 16Mentions 17
This study presents a critical reappraisal of the touristry industry of the Maldives and an rating of the challenges it is confronting.Discussions on how sellers are reacting has been presented every bit good.The effects of the planetary fiscal crisis which hit the Europe and the remainder of the universe on the Maldivian touristry industry will be evaluated. The effects on Maldives touristry from the fiscal crisis in Europe, which accounted to more than 70 % of the entire tourer reaching in the state in the yesteryear, will be besides evaluated.
Factors in the external environment will be included in the analysis.The study will concentrate on happening challenges faced by the touristry industry and measure the responses by the sellers in reacting to these challenges.Brief enterprises by companies within the sector to countervail these issues will besides be presented.
The Studies limited to operators of the resorts and other tourers vass. Due to miss of information on the 2010 statistics much accent is non put on to depict the extent of recovery of the economic system as a consequence of the addition in tourer reachings as merely one month statistics were available during the clip of this research. Furthermore the survey considered merely the adult male made crisis in deducing challenges to the industry.
2.0 Over position of the industry
The Maldives, situated in South West of Sri Lanka on the Equator comprises of 1,190 tropical islands stretching over an country of 90,000 sq Km. With an norm of 30 grades Celsius, submerged coral gardens, white sandy beaches, turquoise bluish lagunas, crystal clear H2O and 664 Km of coastline ; the Maldives offers impossible natural beauty and remote tropical island experience to its visitants.
Maldives has a rich and diverse civilization with influences from African, Asian, Indian and British.An array of celebrations and activities can be found on the islands including superb fishing, universe category breaker, shopping, plunging and snorkelling, giant and dolphin observation and much more.Over the last five old ages tourer reachings to the Maldives have been increasing invariably except for 2005 as the part was badly devastated by the tsunami.
2007 saw a record twelvemonth for Maldives Tourism with a 12.3 % rise ( 3.8 % higher so expected ) , a important accomplishment signalling the industry was get bying good with the long permanent impacts of the tsunami.Tourism is the chief industry in the Maldives and contributes about 32 % to its GDP – a figure which could easy lift to 70 % if indirect sectors associating to touristry are taken into history. Tourism generates a 5th of Maldives entire employment and 70 % of its foreign exchange net incomes. It besides accounts for 30 % of the Government ‘s gross. ( W.T.
O. 2010 )
Maldives holiday provides the undermentioned merchandises to the tourers Honeymoon.
Business, household, Spa retreat, marrying Ceremonies, Diving, Cruising and Surfing. ( Maldives traveller website, 2010 ) . Recent tourer sentiment study showed that the chief grounds for tourers coming to the Maldives were relaxation ( 55 % ) ; honeymoon ( 28 % ) and plunging ( 11 % ) .
The Maldives is known for its high terminal universe category resorts and, which offer tropical privateness in the modern feverish universe, popular among the rich and celebrated. This privateness and privacy of many Maldivian resorts is what makes them alone.
This is what differentiates the Maldives from its rivals, and over the last few old ages many new sole resorts have sprung up. These high terminal resorts, and the touristry sector as a whole, are an of import portion of the Maldivian economic system: in 2008, the sector contributed 27.2 % of the Maldivian GDP.
( MMA 2010 )
2.3 Topographic point
There are 97 luxury resorts established in the Maldives presently under operation and a farther 30 resorts are been developed in add-on to 145 campaign vass and metropolis hotels already runing in the state. One resort one island is the policy that has been maintained in the Maldives.
Each of them is self sustained supplying maximal privateness to the invitee. ( Tourism ministry web site 2010 )
Destination Maldives publicity is actively taken up by the authorities.activities are carried out by the authorities administration called Maldives touristry publicity board. They initiate, lead, facilitate and put to death the planned activities.Maldives is promoted chiefly in UK, Germany, and Italy.
The Maldivian travel and touristry industry is mostly controlled by the private sector.
The cardinal authorities Acts of the Apostless as a regulative organic structure in the industry. The cardinal interest holders in the industry are the local circuit operators, circuit operators abroad, local air hoses, international air hoses, circuit operators. Among them exists partnerships and strategic confederations together lending to the quality service being provided.
Harmonizing to Riza ( 2010 ) every state is a rival in the touristry industry.
However in footings comparable merchandises to the Maldives the Bahamas ; Barbados ; Bermuda ; the Cayman Islands ; the Dominican Republic ; Fiji ; Guadeloupe ; Jamaica ; Martinique ; Mauritius ; New Caledonia ; Reunion ; the Seychelles ; St Lucia ; and Trinidad and Tobago can be considered as rivals they are tropical island states which offers tourers tropical island experience.these finishs do non hold an advantage over the Maldives in footings of distance to the chief beginning market of markets. ( Riza 2010 )
3.0 Key findings
3.1 Swot analysis
Unique theoretical account of island developmentNatural resource base: tropical atolls and islandsExcellent resort installations with ocean based activities ( coral beaches, diving, and fishing )Enviable trade name image in market place30-years of progressive growingBroad investing climeEntrepreneurial thrust
Reliance on foreign forces and Maldivians ‘ imperturbability ( reluctance ) to working in touristryLong-haul finish for current market sectionsDependence on imports of capital and operating goods and merchandisesInter-island conveyanceAbsence of forward linkages and hapless integrating of local inputsFinish sellingPoor information base for mature market
Productive public-private duologue and action planning-by including all stakeholders, including circuit operators, in future planningProduct distinction and cleavage: ecotourism, island subjectsNew markets ( China, India, Russia )Human resource developmentSupply ironss for local merchandises, including coir rope, thatch, grass mats, fishing, fruit and vegetable productionEnhanced SME and microenterprise developmentBetter authorities resource mobilization/use model for touristry
Monochromatic merchandise lineLosing traditional market baseProgressive commercialisationEnvironmental debasement and weak coastal zone direction ( e.
g. , sanitation )Shallow fiscal sector and deficiency of nest eggs and investing vehiclesLimited chances for emerging enterprisers to come in the fieldBeginning: ( World Bank Report 2006 )
3.2 Current analysis of tourer reachings
Europe is the biggest market for Maldives touristry industry accounting for 73.3 % , 72.8 % and 70.5 % in 2007, 2008 and 2009 severally. The European portion of the entire tourer reaching has declined by 0.05 % in 2008 and 2.
3 % in 2009.Despite the a bead in overall portion of reachings, European sector saw an increase by 0.4 % .This increase is due to an addition in tourist reachings from Russia and Ukraine by 53.
8 % and 52.3 % severally. United Kingdom, Italy and Germany were the biggest markets for the Maldivian touristry industry accounting for 63.5 % , 58.3 % , and 57.2 % in 2007, 2008 and 2009 severally. This is a uninterrupted bead from 7.
9 % to 8.8 % in 2008 and 2009 severally. ( Tourism ministry web site, 2010 )Entire tourer reachings to the state dropped by 4 % despite an addition in Asiatic sector by 6.9 % particularly china which registered the highest growing rate in 2009 at 46.1 % and overall portion of the Asian sector by 39 % . China over took Japan which was the largest Asiatic market for Maldives shared 23.6 % of entire Asiatic sector registering a bead in tourer reaching by 7.
1 % and 4.1 % in 2008 and 2009 severally.However in 2010, entire tourer reachings increased by 21 % registering an 8 % growing in the European sector.
3.3 Other findings
The Lone international airdrome in the state is Male international airdrome on Hulhul & A ; eacute ; Island which is a 10-minute ferry sit off from the capital Male. It has a track of 3,200 metres for the clip being equal nevertheless research suggests that at extremum times the terminus installations are stretched beyond capacity.
Presently 30 bearers connect Maldives to the remainder of the universe. Recently the domestic airdrome in Gan was upgraded to an international airdrome position to provide for the southern resort developments.however it is yet to be run as an international airdrome.There were programs for six regional airdromes to better transposing between the atolls and the capital where Access to all islands is tightly controlled through transportations to resorts by speedboats owned by the resorts themselves or under contract with the two hydroplane cab services. For domestic flights,There are two sea-taxi services ( Trans Maldivian and Maldives Air Taxi ) , with a sum of 31 Twin Otters and an air hose functioning the state ‘s web of airdromes ( Island Airways ) . ( World Bank study, 2006 )
4.0 Challenges in the industry
4.1 Impact of planetary economic recession
Global economic recessions can hold a profound impact on the touristry industry in the signifier of lessening in tourer reaching grosss.
Recessions can take to a autumn in disposable income of consumers ensuing in a lessening in ingestion of luxury goods such as vacations. When consumers becomes progressively pessimistic about their hereafter in footings of decreased occupation security and increased fiscal duties they minimize their disbursement dramatically declining the economic state of affairs farther. ( Shina, 2010 ) .Furthermore loss in concern assurance leads to be cutting steps such as employee decrease and monetary value increase which finally makes the finish range and monetary value of the vacation bundle more expensive.Recessions can be caused by a hiking in planetary fuel monetary values which makes cost of production expensive.especially the air hose sector which is a merchandise of touristry will be affected by the fuel monetary values. The addition in fuel monetary value in other words the fringy costs are reflected in the menus or covered by cut downing the discounted seats.
( Shina, 2010 )It is clearly apparent from the recent fiscal crisis which stemmed from United States that derived the economic systems of the universe in to recession affects the touristry industry negatively. In the instance of Spain, a crisp diminution in consumer outgo and surged in unemployment with a prognosis in farther increase in 2010 devastated the economic system doing it one of the worst affected states in Europe. This was as a consequence of the authorities ‘s slow response to the crisis and jobs in the political forepart in execution of the schemes. ( Sebastian 2009 )
4.2 Impact of environmental debasement
Harmonizing to McKercher ( 1993 ) touristry is a resource based industry which describes it as a rapacious consumer of resources.The building of resorts located in countries with alone and delicate ecosystems can do a lasting restructuring of environments and sometimes destructing the original ecosystems. The proviso of substructure can widen the environmental impacts of tourer developments far behind the development site. ( McKercher1993 ) .
Despite legion economic benefits from touristry the environmental impact in its enlargement can endanger the really basic experience that is being sold, the distant tropical islands with coral gardens and a huge assortment of species busying them. Activities such as snorkel diving, scuba diving and reef walking, H2O athleticss activities where power boats are used extensively can endanger the really coral reef that sustain non merely an ecosystem of multi species but the barrier to erosive impacts of moving ridges on the resort islands. Without such natural barrier the beautiful white sandy beaches the Maldives is known for will melt away a adult male made barrier will hold to be built altering the really image of the islands.Harmonizing to the Prior ( 1995 ) important harm is caused by the leisure scuba plunging to the coral reefs of Egyptian resort Sharm EL Sheikh on the ruddy sea. Similarly McKercher ( 1993 ) studies that harm of reef by scuba frogmans were reported in USA, Australia and the Caribbean.However the demand from the touristry industry and the economic benefits from it had pressured the authorities to run into the substructure demands such as extension of airdromes by land renewal through dredging lagunas and renting islands for resort developments in new countries which has no human activity etc. Despite these force per unit areas in order to extenuate the harm authorities imposed rigorous ordinances and guidelines for resort building and operation.
Government was peculiarly concerned with the transporting capacity of the islands. Measures to restrict the figure of people in a resort island below the environmental threshold such as restricting the maximal built-up country to 20 % of the entire land country were taken. ( Ministry of touristry web site, 2010 )Further more resorts are required to use latest engineerings to extenuate the harm to the environment such as holding incinerators, bottle crushes and compactors and sewage intervention workss.
5.0 Proposals to run into the challenges.
To run into the challenges face by the Maldives touristry industry, sellers are inventing schemes heightening the image and develop merchandises integrating the altering demands, values and consumer behaviors while at the same time prolonging the touristry industry.In partnership with the Government of the Maldives, operators are offering services to tourers sing some resorts on complimentary footing to pull and increase the tourer reachings to the state. ( World Tourism administration web site 2010 ) moreover strategic confederations have been made in order to increase entree to the finish.
British air passages direct flights linking Europe, and Bangkok air passages direct flights linking south East Asia to the Maldives in add-on to the already established air hoses.Focus on other emerging finishs such as China, India and Russia to cut down the dependence of Maldivian touristry on western European sections. Maldives is set abouting extended promotional activities in China and developing strategic partnerships in Russian and India to increase tourer reachings.Turning Maldives in to a green economic system and advancing green touristry is another response to the challenges. Maldivian authorities had already initiated plans such as traveling C impersonal by 2020 to re invent the finish image of Maldives. Strategic alliances with big transnational companies had already been set up one such undertaking is supplying safe and renewable energy for different parts of the state through air current farm which will be supplied to populate islands every bit good as nearby resorts. ( The defender web site 2010 ) This is peculiarly optimistic for tourer resorts as the operation costs lessenings since all the resorts in Maldives are self sufficient and bring forth their ain energy by Diesel fuelled engines.
Companies such as six senses hotels UK had initiated undertakings in its Maldives belongingss to go carbon impersonal and advance itself as a green resort. Some of the enterprises included utilizing lumber from sustainably managed and certified beginnings, utilizing natural airing every bit much as possible, sourcing stuffs locally, put ining energy-saving visible radiation bulbs, promoting the usage of bikes and battery-operated vehicles and cut downing ‘food stat mis ‘ by turning fresh produce their two organic gardens. The resort implemented Water-saving steps as powering a reverse-osmosis desalinization works to change over saltwater into fresh water for the resort ‘s operations and both guest and host demands was energy intensive. Measure such as ( Six Senses Hotels website 2010 )Giving guests the option to non hold their bed linen and towels washed each twenty-four hoursAll swimming pools use filtered saltwaterThe freshly renovated invitee suites every bit good as other countries are connected to a grey-water recycling system ; the filtered H2O is used for the irrigation of the organic gardensThe island ‘s groundwater is used for staff sanitationRain is collected and channeled into the reverse-osmosis works to do the desalinization procedure more efficientNative works species merely are grown in the jungle countries that do non necessitate extra irrigationMTDC is a cardinal participant in resort development and operation jointly owned by the authorities and public.some of the selling enterprises by them to get by with challenges include execution of a two faceted selling scheme – one, to pull investing and direction spouses for the development and direction of the resorts, and two, to market the belongingss under operations or nearing operations to tour operators and possible tourers.MTDC participated in the taking international travel and touristry carnivals. In 2009 MTDC took portion in the two prima international touristry trade shows ; the ITB International Tourism Fair held in Berlin, and the World Travel Market exhibition held in England. MTDC besides participated in the BIT 2009 just held in Milan.
( MTDC Annual Report 2009 )
It is apparent that the Maldivian touristry industry mostly depends on the tourers from the European section. However the fiscal crisis in Europe that leads to a bead in tourer reaching n this section leads to a psychiatrist of the economic system. This gave the touristry industry a new position as a little alteration in the European travel consumer behaviour can take to decelerate growing in the economic system which shared more than 70 % tourer reaching to the state. Therefore in order to counter the challenge focal point was put on the Asiatic section particularly china and India the new emerging economic powers every bit good as Russia. This lead to another challenge, addition in tourer reaching to the state striving the natural resources, taking to pollution and environmental harm.Therefore sellers had to counter these challenges by providing merchandises to suit the altering consumer behaviours in the West every bit good as in prolonging the touristry industry by protecting the environmental by presenting green touristry.