Maldives hotel performance rebounds during festive period
For a country whose economy is driven by tourism, a setback was imminent for the Maldives when considering the global pandemic. Hotel closures were seen across the board, and the industry walked on thin ice until the government reopened international borders in July 2020. From there, ease of travel, reopening of flight routes, and heavy hotel rate discounting garnered some demand during the initial phase of reopening. Hotel occupancy, which had fallen to the low single digits, inched up gradually to almost the 20% mark in August 2020. However, like most other global regions, hotel performance in the Maldives too mirrored developments around the virus, with second waves from source markets resulting in gyrating demand.
At a time when governments around the world increased travel protocols and restrictions, the Maldives extended a seamless entry for tourists into the island nation. This travel-friendly welcome, coupled with the high festive season demand, resulted in an influx of tourists to the Maldives in November and December 2020. Resorts and hotels began reopening in phases, with luxury and upper upscale hotels reopening first. Hotel occupancy hit 56% for December. In fact, during the festive weeks, hotel demand peaked to 85%, and average daily rate (ADR) soared to MVR25,000.
While deep hotel rate discounting made Maldives a cost-effective destination, a rush in last-minute bookings during the holiday season presented the opportunity for hotels in the region to increase ADR for the period.
With widely spread out hotel rooms and beach front F&B outlets, the Maldives has strategically promoted itself as inherently “socially distant” and “safe to travel.” Airlines too were quick to launch direct flights from high-demand source markets and offered COVID-19 insurance, which also boosted tourism in the Maldives during the festive period.
Arrival numbers demonstrate the attractiveness of Maldives as a destination and its ability for a quick bounceback.
The country welcomed 96,411 tourists in December 2020 alone, according to the Maldives Immigration Department. Travelers from the Maldives’ traditional source markets, such as China and Southeast Asia, came in at the bottom of the list of visitor volumes given travel restrictions for those looking to venture outside their home country. However, India, Russia and the U.K. topped the charts with some amount of escapism to the island nation seen by certain European destinations such as Germany, France and Spain.
In mid-December, the U.K. government implemented another lockdown and restricted international travel. This resulted in cancelations for hotels in the Maldives, not just from the U.K., but also from neighbouring European countries. Furthermore, hotels in the Maldives were anticipating a sizeable chunk of demand to dissipate after Russia’s Orthodox Christmas Holiday ended in the first week of January.
If we consider December 2020 as a benchmark for recovery, hotels in the Maldives have enough reason to believe the destination is poised to bounce back quickly once the vaccine rolls out successfully and travelers gain more confidence. Furthermore, STR’s Forward STAR program for the Maldives will launch in February 2021. Forward STAR data measures occupancy on the books, allowing hotels to look into future demand and strategize more efficiently. To enroll your property in STR’s Forward STAR program, and to receive complimentary market data, contact firstname.lastname@example.org.