Hoteliers in the Maldives are having a harder time filling up rooms amid a surge in new hotel openings and slowdown in arrival growth. Feizal Samath reports

A flurry of new resorts opening in the Maldives in recent years has brought new challenges to the lucrative tourism industry, as a supply glut outstrips demand and visitor arrival growth to put pressure on room revenues.

The accommodation supply has been steadily growing for the Indian Ocean nation. From 108 resorts and 23,936 beds in end 2015, the number of resorts in operation totalled 117 with 26,557 beds by end 2016. As well, there are nearly 400 registered guesthouses with a total of 5,600 beds as of November 2016.

“The ADR is significantly low and continues to drop. Resorts are not making money,” said a senior manager at a local resort chain, who declined to be named.

He added: “The influx of tourists three years ago has dissipated while the rooms to match that (earlier) demand are only now coming on stream.”

Nearly 1.2 million arrivals were recorded in January-November 2016, up 4.6 per cent from the same 2015 period. This presented a sharp picture of contrast from the double-digit growth three years ago when the one million arrivals in January-November 2013 translated into a 17.8 per cent hike from the same 2012 period.

This growth slowdown comes as no surprise to Mario Hardy, CEO of PATA. “When I ask friends and family members about the Maldives, the following words comes to mind: beautiful island paradise, turquoise water and expensive. I am not surprised that the country is witnessing growth of only three to four per cent because these words could represent any number of island destinations – some of which are very close by,” he remarked.

Still, Maldivian deputy tourism minister Hussain Lirar believes it is not all gloom and doom for a destination that remains aspirational for many in the region.

“Too many beds? I don’t think so. In fact, in December there was a shortage of rooms,” he said, while conceding that more destination marketing may be required when newer properties launch.

Abdulla Ghiyas, president of the Maldives Association of Travel Agents & Tour Operators, also maintains that an increase in promotional budgets will help the destination ride out this oversupply storm as well as the political uncertainty that has embroiled the country in recent times.

While political instability has led arrivals from China, the country’s largest source market, to tumble 10.2 per cent to 308,077 in January-November 2016, Krishan Balendra, executive director at Colombo-based John Keells Holdings, which owns three Maldivian resorts, expects a swift recovery from the Chinese market. “Some markets like China are very sensitive to political developments,” he said.

Industry players remain sanguine of the Maldives’ prospects. Thomas Meier, senior vice president operations-Asia at Minor International, said: “In the tourism industry it’s not unusual to see growth cycles. The Maldives has experienced a number of years of continued growth, so it’s certainly not uncommon to see a softening of the market,” he said.

Likewise, Shabeer Ahmed, chairman of Coco Collections, opined that falling room rates and occupancies over the last two years are just part of a cycle that every business experiences.

The key for owners, he stated, is to prepare the right strategy when the business cycle improves, adding that there is good reason to believe that the market for the Maldives is growing.

Looking ahead, new names entering the hospitality scene this year include Four Seasons Private Island Maldives at Voavah, the world’s first exclusive-use UNESCO hideaway on a secluded island with just 22 rooms, as well as the newly opened St Regis Maldives Vommuli Resort and Hurawalhi Island Resort (see page 26), all of which are expected to enhance the destination’s strength in commanding a premium upwards of US$1,000 a night at top resorts.

The destination also attracted a record number of 40 private jets in December, carrying the likes of superstar David and Victoria Beckham for their New Year’s Eve party in the Maldives.

Unfazed by the room influx, John Keells Holdings’ Krishan thinks that new resort openings will, on the contrary, instil further market confidence in the tourism sector. “It also ensures the incredibly high level of standards at the resorts,” he said. “Competition is healthy.”

This article was first published in TTG Asia March 2017 issue. To read more, please view our digital edition or click here to subscribe.

Despite its rich cultural and natural offerings, negative perceptions of Mindanao as a conflict zone remain a major roadblock for its tourism ambitions, finds Rosa Ocampo

Mindanao, the southernmost  major island in the Philippines, still remains sidelined by tourists due to safety and security concerns, but the trade feels this stigma stems from misinformation and seeks concerted efforts from the government and private sector to overturn the negative perception.

The foremost issue lies in addressing the prevalent safety and security concerns, stated Angel Ramos Bognot, president and managing director of Afro Asian Travel and Tours, and suggests Mindanao to take a leaf from Palawan’s book.

Rocked by a high-profile kidnapping at one of its resorts in 2001, Palawan has recovered from the incident and gained global renown as a premiere beach destination after giving focus on security measures put in place, she added.

As well, Ramos Bognot added that Mindanao should have highlighted the Japanese prime minister’s recent visit to Davao as well as the authorities’ preparedness for emergencies and safety measures that were implemented.

Although Rajah Tours offers tour packages to Davao, Cagayan de Oro and Siargao, its president Jogo Clemente sees “trepidation from some partners as their governments have travel advisories issued against Mindanao”.

Therefore, besides the need for the authorities to establish peace and order in Mindanao’s troubled spots, Clemente also underscores the vital role of the private sector.

“Mindanao has had its troubles and this is the biggest obstacle in offering it as a viable tourist destination. To change that perception, it is important to highlight what’s good about it and play up its attractions,” said Clemente.

“We must do a better job of explaining (to clients and partners) where these safe and enjoyable places (in Mindanao) are in contrast to where the troubled areas are,” he elaborated.

For Luxus Pacific Travel and Tours, which has not been getting clients to Mindanao, reservations manager Jovy Caldejon remarked that it would help if media reports about the island were less sensationalised and indicate that the violence usually takes place far away from the cities.

While not denying that certain areas of Mindanao had suffered from war and violence, a greater part of the island boasts unspoiled natural beauty, a multicultural society and rich heritage, but the island’s development was neglected by the central Philippine government in the past due to its geographical distance from Manila, a trade member pointed out.

Although Mindanao’s stigma has also affected peaceful areas nearby, such as Davao, that looks set to change as both Philippine president Rodrigo Duterte and tourism secretary Wanda Tulfo Teo hail from Davao, priority is finally being given to build infrastructure and promote Mindanao.

Meanwhile, Butch Blanco, tourism director of region IX in western Mindanao, has plans to develop Zamboanga, Dipolog and Dapitan as new tourism hubs by rolling out initiatives such as putting security personnel on alert to assure travellers that the areas are safe, building connectivity to Manila and improving airports.

As Mindanao is home to a sizeable Muslim population, Ramos Bognot feels that the Middle East and neighbouring Muslim countries can be developed as primary source markets for the destination. Europeans too will also make a good market to invest in as they are interested in culture, cuisine and beaches, something Mindanao has in abundance.

To develop Mindanao, she advocates ASEAN’s open skies policies to extend to the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area), which will drive connectivity from the neighbouring countries and increase foreign tourists to Mindanao.

And if people realise the value that tourism brings to livelihoods and the economy, perhaps the troubles in parts of Mindanao would cease, opined Clemente.

This article was first published in TTG Asia March 2017 issue. To read more, please view our digital edition or click here to subscribe.