The advent of guesthouses raises fair play concerns among mid-sized resorts while DMCs fear a dilution of the Maldives brand with budget beds.
With the government welcoming small businesses, guesthouses are proliferating across the Maldives, leaving big resorts concerned that these small accommodation units do not have to go through the same rigmarole of approvals that they are subject to.
Motels, guesthouses and mid-sized resorts are offered within the same general price range, but mid-size resorts are bound by more regulations and rules. Resorts charge US$150 compared to motels/guesthouses which are offered at US$120-135.
“We don’t have a problem with competition. But this is unfair particularly because maintenance costs are high to keep products and in particular water bungalows in top shape all the time,” said a local hotelier, who declined to be named.
Shafraz Fazley, managing director of Viluxur Holidays, said guesthouses need to be controlled and categorised properly by the government.
“They should only be able to market or advertise their properties accordingly. There is a need to educate the consumers on the difference between a guesthouse and an actual resort so it does not spoil the unique image of the Maldives’ one-island, one-resort concept.”
Fazley said the surge in the number of beds in the Maldives is not in line with tourism growth. “This dilutes the business among resorts especially on high-end properties when one or two properties dreadfully (slashes) their rates to (compete with guesthouses),” he explained.
Hussain Sunny Umar, COO at Maldives Getaways, is more welcoming of diversity in accommodation types. “Guesthouses add an additional segment and complements the one-resort, one-island concept that the Maldives is well-known for,” he said.
With the rise of budget airlines and millennial travellers, Airbnb and Zen will eventually be stronger transformative forces in the industry, he added.
Hussain also disagrees that guesthouses are given preferential treatment, as any island intending to operate guesthouses must comply with regulations like having police stations, fire, health and other basic facilities.
According to official data, 120,000 tourists visited guesthouses in 2015, with the number targeted to grow to 500,000 by 2020. The number of guesthouse beds is expected to swell to 10,000 by 2020.
This article was first published in TTG Asia March 2017 issue. To read more, please view our digital edition or click here to subscribe.
