Overview of the Industry

The Maldivian tourism industry has 87 resorts in 9 atolls with a total of about 16,000 beds. Germany and Italy provide about 40 percent of all arrivals. The industry maintains a relatively high bed capacity utilization rate ranging between 59 – 73 percent. In the mid 90’s, the capacity utilization rate increased to over 78 percent and than declined to 60 percent as a result of rapid increase in bed capacity from 1997 to 1999. However, the rate of increase of occupancy from mid 2000, has returned to normalcy. The average duration of stay of a tourist varies between 7 – 10 days.

Tourism started in Maldives in 1972 with the opening up of 60 tourist beds in two resort islands. As there was no International Airport, tourists arrived from Sri-Lanka on small-charted aircrafts, and stayed in Maldives as an extension of Sri Lankan holiday package. At the end of the second year of tourism, bed capacity increased to 750 beds and continued to increase to about 4000 beds in 44 resort islands by the end of the first decade of tourism (1972-1982). At this time the industry was unregulated, and resorts were developed through a lease contract between the agricultural lessees who had leased islands, from the government for agricultural purposes and the developers. The Government, therefore, had no involvement in the selection of islands for development, or in determining building and operational standards.

In the Maldives each resort is an autonomous island, inhabited only by tourists and staff who serve them. At the early stages of tourism, rainwater and underground water of islands were used. Sewage was discharged into aquifer using soak pits and solid waste was either dumped to the sea, buried or burnt using open fires. Electricity was generated using diesel power in many cases, electricity and water were available at certain times.

Resort islands consisted of a restaurant, bar, reception area and bungalows built on the periphery of the islands facing the beach. In most cases a jetty located in front of the reception extended to the deeper waters of inner lagoon, which is the only access to the island because of the shallow waters and the reef that surround them. In the early years of tourism, all structures of the resort were generally made from coconut wood and roofs were thatched with coconut palm leaves. Limited quantities of imported cement were used but most masonry work consisted of irregularly cut corals, plastered together with lime that was produced by burning corals. Floors were often covered with sand, but toilets were tiled and had modern toilet fittings. Each room consisted of a bed, a wardrobe, a luggage rack and a dressing table all made of local material. All resorts have a diving school and a wind surf school, as water sports are the most popular activities of the tourists.

In the early years tourists travel from the airport to the resort on Dhonis (the local fishing boats) and mostly stayed in the resort, except for a day trip to Male and to a neighbouring inhabited island: these trips were regularly organised by the resort. However, to-day tourist in resorts within 30 kilometre radius from the airport travel in speed boats and the rest by float planes. Nonetheless, tourists still confine themselves to the resorts.

With the development of the Airport in 1982, the Maldivian tourist product was detached from the Sri Lankan holiday package, and with diving, lagoons, sandy beaches and the tropical climate as the major attractions, it became a new product: A NEW TOURIST DESTINATION WAS BORN. With the improved access to the Maldives, tourism started to rapidly expand. As tourism was still unregulated tourists journeyed and lived all over the Maldives, with the less adventurous travellers holidaying around the islands near the airport and Male, the capital island. The number of resorts started to increase dramatically, and eventually resorts occupied almost all islands within close proximity to Male, and the Airport. As a result the bed capacity of the industry started to increase rapidly.

Figure 2

Tourism expanded from 280 beds in 1972 to 1034 bed by 1977, a growth of 269 percent over the five year period. And from 1977 to 1982, it expanded to 3964 bed which was another 283 percent increase over the previous five year period; the rate of increase then declined to 56 percent in the period 1982 to 1987, however the absolute number of beds still progressively increased (see figure 2). The industry presently has over 16000 bed in 87 resorts.

With the capacity increase, the structures and designs of resorts also started to change but the attractions and facilities remained more or less the same, although the quality of the structures and services improved. Imported materials had to be used for construction to make structures more permanent and durable. The simple cottages of the early years changed into modem rooms with tiled roofs and floors, air conditioning, television, telephones and mini bars. The accommodation facilities became similar to urban hotel rooms, although the exterior maintained the cottage look. When the aquifer started to be depleted and rainwater storage became more difficult with increased demand, desalinated salt water became the source of water supply. And the supply of electricity and water remained available at all times.

This rapid expansion soon started to show environmental stress, both to the social structure and to the physical environment. The social impacts were soon curbed by confinement of tourists to resorts, and the formulation of regulations to govern tourist behaviour. Although, in the period 1972 to about 1980, the stress to the environment was limited because of the basic level of facilities in the resorts, subsequent expansions and improvements started to pressure the islands and its marine ecosystems. The environmental stresses included depletion of the aquifer; loss of the balance of the erosion and accretion patterns of the islands; depletion of the turtle population because items made of turtle shells and seashells were important souvenirs bought by tourists.

Consequently, the sustainable nature - tourism industry of the 1970s and early 1980s, shifted to a less sustainable position. Even though there were negative ecological impacts the economic benefits from the industry increased dramatically. The Figure 3 shows the increasing government revenue from tourism. From 1987 to 1988 the direct revenue government received from tourism increased by 23 percent and in the following year it increased by another 54 percent (see Figure 3). In 1998 Government revenue from tourism is over 500 percent of the revenue received in 1989.

Figure 3

Source: Ministry of Planning Human Resources and Environment 1999.

Recognising the importance of the industry, the government initially formulated regulations to curb negative social impacts, by prohibiting tourists from staying in any other islands, except registered resorts and Male'. In addition, the government issued permits to resorts in the process of development; imposed a moratorium on constructions of new resorts; and commenced tourism planning. In the early 1980s the First Tourism Master Plan was formulated and more regulations governing construction and operation of the resorts were enacted. Later, in 1995, a second tourism plan was formulated. This plan outlines the spatial expansion strategies and policy options related to all aspects of tourism. These include manpower planning, identification of potential tourism zones that might be developed in the future, and institutional development plans. Hence, ad hoc development was controlled, and tourism expansion more restricted and planned.