Demand declines in Maldives after hotel spa ban

Hotel demand has declined in the Maldives over the period May 2011 to May 2012 following a ban on hotel spas, political unrest and new supply, reported STR Global.

Hotel supply increased by 2% in the Maldives in 2011 and continued to increase by 3.2% during the first five months of 2012, compared to the same period the prior year.

During the same period, demand grew by 10.2% in 2011 but declined by 3.8% to May 2012.

According to STR, the decline was the combined result of a short-lived new legislation aimed at banning hotel spas at the end of the year 2011, creating a very unpopular reaction amongst travel agencies and foreign travellers.

The new rule was later overturned but in February 2012, political unrest in the Maldivian capital Male threatened the peaceful image of the remote islands.

These uncertainties affected demand year-to-May 2012, leading occupancy to decline by 6.8% to 66.9%.

However, ADR increased increased by 19.1% to €567.78 year on year, attributable in part to increasing numbers of Chinese tourists.

Travellers from China are now the Maldives main source market, compensating for the declining European and UK demand.

“Both the Maldives and Mauritius have been influenced by the state of the economic activities thousands of miles away”, said Elizabeth Randall, managing director of STR Global. “In the Maldives, whilst demand from European visitors declined, the emergence of growing wealthy Chinese travellers has benefited hotels to remain one of the top luxury destination around the world.”