<<

Tourism Update V O L 9 | I S S U E 3 5

BRIEF ANALYSIS ON INDICATORS OF

APRIL 2020

STATISTICS & RESEARCH SECTION MINISTRY OF TOURISM VELAANAAGE,5TH FLOOR,AMEERU AHMED MAGU MALE',MALDIVES Tourist Arrivals and Travel 200,000 173,347 20 149,788 0 Restrictions to the Maldives 150,000 -20 -COVID-19 adversely 100,000 59,627 -40 affects tourist arrivals by -20.7% in Growth (%) No. Arrivals of 50,000 Q1 2020 -60 0 -80 January March -Travel restrictions were put in place for key markets Arrivals Growth Figure 1- Tourist Arrivals and Growth, 1st Quarter -Maldives closed its borders on 27th 2020 March 2020 The first European country to get a The first quarter of the year is an anticipated travel advisory was , one of the hardest hit th period in the Maldives. The quarter is the peak nations by COVID-19, effective from 8 March period of several key markets to the Maldives 2020. On 12th March 2020, COVID-19 outbreak such as and Italy. and other was declared a pandemic by WHO. accommodation facilities alike, gear for the In a span of a week, travel restrictions were influx of tourists who come to rest and relax in issued by Maldives for other European markets; th the tiny isles of the Maldives. This year, on 5 , French Île-de- & Grand January, when a cluster of unknown pneumonia Est and German regions Bavaria, North Rhine- cases were reported in Wuhan, the tourism Westphalia and Baden-Württemberg on 15th industry was thriving in the Maldives. Over March 2020. While a further travel restriction growing concerns of the newly found was placed on U.K effective from 19th March coronavirus, January recorded 173,347 tourists 2020, countries such as (effective with a growth of 14.4%. 17th March 2020), Sri (effective 21st As COVID-19 pandemic unfolded, Maldives March 2020) and (effective 24th placed its first travel restriction - to restrict the March 2020) were also issued travel advisories. entry of any passenger with a travel history to In the efforts to curb COVID-19, the Maldives China, commencing from 5thFebruary 2020.This took a drastic measure to close its borders. The was followed by similar travel restrictions to borders were officially closed from 27th March (effective 26th February 2020) and Korean 2020, 0:00 hrs. regions, North Gyeongsang and South Amid COVID-19, countries across the rd Gyeongsang province (effective 3 March 2020). resorted to containment strategy by lockdowns, Hence February saw the impact of COVID-19 suspending international flights and border mostly on Chinese market, as it dwindled on closures. Air travel was widely disrupted hence numbers. By the end of February, arrivals to the March 2020 was a bleak month for were down by -11.1%, accounting for Maldives. The impact of COVID-19 hit March 149,788 tourists. Meanwhile International arrivals by a staggering -63.4%, reducing arrivals tourist arrivals dropped -9% in February. to 59,627, compared to 162,843 in 2019.

1 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 International tourist arrivals fell by -57% in 28.3% (Refer Table 1). In 2019, & the Pacific March. contributed to 35.3% shares for the same period.

According to UNWTO World Tourism Barometer Midde East … 0.9% May 2020, Travel and tourism is among the most 4.9% affected sectors by the COVID-19 pandemic. For the first time in history, 100% of worldwide destinations have introduced travel restrictions Asia & the in response to the pandemic while 156 Pacific 28.3% destinations have completely closed its borders for international tourism. 62.5%

Figure 3- Market share by regions, end 4th -All regions affected by COVID-19, Europe Asia & the PacificQuarterAmericas 2019 particularly Asia & the Pacific Figure 3- Market share by regions, end 1st By the end of the first quarter of 2020, all market Quarter 2020 regions except the Middle East registered declines in growth. All Market regions performed positively in January before Europe was also an affected in Maldives. decreasing in March. It remained as the top market region to the Maldives accumulating over 62% shares. The 100.0 30.0 first quarter of 2020 was almost over when travel restrictions started to pan out in March. 20.050.0 Thus, all the European markets sharply declined 10.0 4.9 in March. 0.00.0 AfricaAfrica MiddleMiddle AmericasAmericas AsiaAsia & & EuropeEurope Arrivals Market Growth (%) Growth -10.0 Change EastEast thethe January-March Share Growth (%) -50.0 -20.0 PacificPacific -11.3 -19 end Q1 -30.0 2019 2020 20 / 19 2020 -100.0 -27.4 (%) -40.0 -36.6 Europe 269,619 239,087 -11.3 62.5 January February March 2019 Q1 2020 Central/ 61,362 63,653 3.7 16.6 50,508 45,301 -10.3 11.8 Figure 2- Growth by regions, end 1st Quarter 64,152 55,412 -13.6 14.5 2020 88,718 71,103 -19.9 18.6 East Mediterranean 4,879 3,618 -25.8 0.9 Asia and the Pacific was the hardest hit region Europe Asia & the Pacific with a decrease of -36.6% in tourist arrivals for 170,602 108,154 -36.6 28.3 North 100,102 50,578 -49.5 13.2 the Jan-Mar 2020 period. China was the first South East Asia 17,928 11,581 -35.4 3.0 epicenter of COVID-19, which lead to direct flight 42,121 39,341 -6.6 10.3 cancellations and an early travel restriction. This 10,451 6,654 -36.3 1.7 affected the Chinese market to Maldives heavily. Americas 25,804 18,721 -27.4 4.9 The loss of Chinese market shares halved the Middle East 12,810 13,436 4.9 3.5 North East Asian shares and sunk the Africa 4,088 3,311 -19.0 0.9

overall market share of Asia & the Pacific to Table 1- Arrivals, Growth and shares by regions, end 1st Quarter 2020

2 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 Though January and February yielded positive Top 10 markets to the Maldives growths, Europe was unable to compensate for the decline, ending the quarter with a decline of -11.3%. Among sub regions Central/Eastern -Italy, and China - the top 3 Europe was the only region which posted a positive growth, though it also went downhill in markets March. Globally Europe is one of the hardest hit Rank 2019 2020 regions in the pandemic, hence the first quarter 1 Italy 52,848 44,612 alone would not fully capture the impact of COVID-19. 2 India 36,053 34,862 3 China 76,568 33,889 The Americas saw a -27.4% decrease in tourist 4 U.K 36,116 32,818 arrivals in the first quarter of the year. The 5 26,284 28,949 average growth was weighed down by decreases 6 37,279 28,228 in both February(-10.7%) and March(-68.8%). 7 France 26,692 21,784 The region attained 4.9% by the end of first 8 U.S.A. 16,339 11,414 quarter of 2020. 9 Switzerland 10,696 9,170 The Middle East was the only region contributing 10 11,163 8,302 a positive growth (4.9%) for the Jan-Mar period. Middle East recorded robust results for January, Table 2- Top 10 markets to Maldives, end 1st enhanced by which recorded a Quarter 2020 growth over 100%. February also recorded positive growth for the region before decreasing The top ten markets slightly shifted, and market in March. shares altered - an impact of the pandemic. China, the top market for years stepped down to Africa also declined by -19% for the January – the third position while Italy climbed up to the 1st March period. Similar to Middle East African place. Italy held the highest market share of region also plummeted in March. 11.7%

Switzerland, a traditional market to the Maldives 50,000 20.0 45,000 10.0 made an entrance to the top ten list after 2 40,000 th 0.0 years, to the 9 position. Japan stepped down to 35,000 th 30,000 -10.0 the 10 position. 25,000 -20.0 20,000 -30.0 China suffered the highest loss in market share 15,000 -40.0 from 16.7% in 2019 to 8.9% in 2020. On the other 10,000 5,000 -50.0 , markets such as India, U.K, Russia and 0 -60.0 France increased their market shares.

As seen in Figure 4, Russia was the only market to record an increase in growth in the first Arrivals Growth (%) quarter of 2020. During the pandemic the market recorded an impressive growth of 10.1% Figure 4- Arrivals and Growth of top 10 markets, end 1st by the end of March 2020. The direct flight Quarter 2020 Aeroflot did not cease its operations to Maldives, until borders were closed.

3 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 the only source market recording a 2.4% 2.2% Italy positive double digit growth of 10.1%. Russian 3.0% 11.7% India market also declined in March (-27.5%) but was 5.7% China able to offset the negative growth. The market was in flex when the Maldivian borders closed. U.K Possible reasons for this could be that Russian 9.1% 7.4% Russia regions started their lockdowns from 30th March, Germany a much later date and the number of coronavirus France infections in Russia deteriorated in April. Hence 8.9% U.S.A. no travel restriction was placed to Russia before 7.6% Switzerland the borders closed. 8.6% Germany started the year with a sluggish Figure 5- Market Share of top 10 markets, end 1st growth. Growth rates recorded for both January Quarter 2020 (+5%) and February (+0.4%) appeared low compared to previous years. With stringent restrcitions, the devastatation of the coronavirus becomes clear as German arrivals dropped - Major Markets 59.1% in March. By the end of the first quarter of 2020, the German maket had declined by - 24.3%, the highest among major European Europe – sinks as low as -24% markets. 15.0 Italy was the leading market in the first quarter 10.1 10.0 of 2020. When the novel coronavirus began 5.6 6.1 spreading across the world, Italy quickly went 5.0 into a lockdown on 9th March 2020. So on March, 0.0 Italian arrivals massively plunged by -78.1%. Italy -5.0

ended the quarter with a decrease of -15.6% -10.0 -7.7 -9.1 compared to the same period last year. The two Growth (%) -15.0 direct flights from Italy to Maldives; Alitalia and -14.3 -20.0 -15.6 -15.8 Neos Spa were among the cancelled flights due -18.4 -25.0 to the travel restrictions. -24.3 -30.0 U.K market to the Maldives was also impacted by the pandemic. Arrivals fell by -9.1% at the end Figure 7- Growth of major European markets, 1st of the first quarter. British arrivals were firm in Quarter 2020 January (+5.5%) and grew moderately in

February (+9.1%) before declining in March (- France had also taken a toll dropping tourist 41%). Furthermore, was one of arrivals dramatically in the first quarter. The the last flights operating to the Maldives, before number of arrivals dropped to -54.1% in March, the border closed. down from -2.8% earlier in January. This makes it the second most affected European region Russian market to the Maldives remained after Germany. France imposed one of the resilient in the challenging circumstances. It was

4 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 strictest nation wide lockdowns in European 0.0 region due the coronavirus. India China Japan Korea -10.0 -3.3 Like its Western Europe counter parts Switzerland also observed a decline (-14.3%) in -20.0 the first quarter.The market performed well -30.0 -25.6 from Jan-Feb, recording a robust growth in -29.8 February (11.7%). On late February the Swiss Growth (%) -40.0 -36.4 government placed a on large events and -50.0 adopted more stringent measures in the -60.0 subsequent weeks.As a result, arrivals in March -55.7 melted away by 52.2%. Figure 8- Top Asian and Pacific markets by growth, 1st As for Austria, arrivals from Austria subsided on Quarter 2020 February (-8%) and significantly fell in March (- 51.4%). The market recorded a growth rate of - lockdown. Consequently direct flights were 15.8% in the first quarter 2020. suspended and travel restrictions to Maldives were also declared, as risk levels heightened. Central European markets, and Hungary The effects were spotted as early as February recorded positive growths for the first quarter ( when the Chinese market contracted sharply by 5.6% and 6.1%). Though both markets have had -94.7%. As the outbreak continued to develop, a sharp drop off in March, they make up, a little the restrictions were maintained and March over 1% in market shares. recorded a decrease of -97.4%.

Sweden was one of the few countries which had Tourist arrivals from Japan to Maldives were not imposed a lockdown. However even with its down -25.6% in the first quarter. Japan was also less restrictive containtment strategy, the among the first countries to contract the market yielded a decline of -7.7% for the first coronavirus early on. Inspite of this, Japan quarter. registered an increase of 2.4% in February for the Maldives and declined in March (-64.7%). Australia recorded a decline of -36.4% at the end Asia and the Pacific – markets severely of March 2020 to Maldives. Australian arrivals affected started to fall from 16% in Janaury, to -20.6% in February and to a significant -63.9% at the end India recorded comparatively a small decrease of of March 2020. The market softened before the -3.3% for the Jan-March period. Indian market to pandemic influenced its arrivals. Thus Australia the Maldives sustained its results from last year lost its position in the top ten ranks. and inflated up until March. The market plumetted by -53.6% in March, resulting in a Korea had the third steepest fall in March decrease for the quarter. (93.9%) apart from China and Iran, countries with travel restrcitions to the Maldives. The The impact of the pandemic to the Chinese market fluctated during the first quarter, market was devastating. China was the most declining in January (-11.3%) and picking up in severely affected market in the Maldives with a February (10.3%). By the end of the first quarter, fall out of -55.7%. China was the first country to Korean tourists had decreased by -29.8% deal with the outbreak and swiftly imposed a compared to 2019.

5 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 America & Africa – ramped down struggled during 2019 and the same trend was seen in the first quarter of 2020. arrivals Towards the end of the first quarter, arrivals As seen from Figure, tourist arrivals to Maldives decreased by -19.1%. Factoring in the already from major American and African markets overwhelmed market and coping with the decreased during the first quarter of 2020. These outbreak has left the market in a grim state. markets-imposed travel restrictions much later compared to the markets in Asia & the Pacific. Overall arrivals from American region are 4 times Middle East – markets collapse much higher than Africa. Saudi Arabia was among the few markets that The USA is the highest yielding market to the recorded a positive growth for the quarter, Maldives among these. However, with an taking up arrivals by 34.9%. Saudi market to the ongoing pandemic, it attained 30% less arrivals Maldives increased by a whopping 130% in compared to previous year. Arrivals from the January. As the battle against coronavirus USA started to climb down from February (- intensified, arrivals fell down (67.3%) in March. 14.3%) onwards and it exceeded over -70% in Its robust growth in January overcome this March. decline.

Brazilian market to the Maldives recorded a 40.0 34.9 milder decrease than the rest of major markets 30.0 in the region. The growth stood at -4.4% for the 20.0 first quarter. did not decline until the beginning of March 2020. 10.0 0.0 was also deeply affected. Its tourist Saudi United -10.0 count to the Maldives dropped sharply by the Growth (%) Arabia -8.1 Arab -8.0 -7.6 -20.0 Emirates end of March (-40.5%). The market started going downhill way back in January. -30.0 -40.0 -33.8 saw a decrease of -30.7% in the first quarter, weighed down by the decline of -67.2% Figure 10- Top Middle Eastern markets by growth, 1st in March. The pandemic had shrunk the growth Quarter 2020 of South African market. For Kuwait and UAE, no travel advisories were 0.0 issued in the Maldives. Yet, both of these U.S.A. Brazil Canada South Argentina markets drastically decreased in March; a -4.4 Africa -10.0 decrease of -85.3% Kuwait and a decrease of - -20.0 86.2% UAE. These were the highest decline rates -19.1 recorded among markets for March, except -30.0 travel restriction imposed China, Iran and South Growth (%) -30.1 -30.7 Korea. -40.0 -40.5 Both Kuwait and UAE observed increases during -50.0 January and February. The declines in March Figure 9- Top American and African markets by brought the end quarter results to -8.1% for growth, 1st Quarter 2020 Kuwait and a more significant -33.8% for UAE.

6 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 Arrivals from Egypt to Maldives sunk in March These include 155 resorts with 36,179 beds, 13 too, bringing the quarterly growth to a decrease with 1,698 beds, and 624 Guest houses of -8%. Egypt also saw a similar trend of growth with 10,006 beds and 157 Safari vessels with during first two months and crumbling in March. 2,985 beds. These figures might not point to the implications of the COVID-19 pandemic to the Qatar market to the Maldives has been tourism industry in Maldives as all facilities rebounding quite well in 2019 which continued operational in March have been accounted. till February 2020 where arrivals soared 100%. However arrivals dipped in March to record - When the pandemic first struck Maldives, 7.6% for the first quarter of 2020. guesthouses located in inhabited were the first establishments to face a temporary

suspension on 17th March. Similar suspensions New Developments followed for hotels located on inhabited islands. By then, COVID-19 had worsened in several countries. Countries across the world started In the first quarter of 2020 only 2 new resorts enforcing border closures and more stringent started its operation. Brennia Kottefaru started measures. Maldives also closed its borders on its operation in Raa Kottefaru with 158 beds 27th March 2020, making the pandemic the and Radisson Blu Maldives started its hardest hit crisis in the history of tourism in the operation in Alifu Alifu Atoll Huruelhi with 320 Maldives. Shortly after the borders closed on beds. No new hotels were registered during this 27th March many tourist resorts also temporarily period. ceased their operations.

Within the first quarter of 2020, 28 new Tourist Bednights and Occupancy rates are guesthouses started its operations with a indicators which revealed the blow to the combined bed capacity of 340. Furthermore only tourism industry in the Maldives. Total bed 1 vessel with a bed capacity of 6 registered nights of tourist accommodating facilities in the during this period. amounted to 2,704,083, recording a significant decrease of -10.6% during the first quarter of The COVID-19 mitigating measures by the Health Protection Agency included a temporary Major Indicators 2020 Jan - Mar Total suspension on guesthouses, vessels and hotels in Arrivals 382,762 382,762 the Maldives. Therefore, new openings have % Change over 2019 -20.7 -20.7 almost come to a halt at the end of the first Bed Nights (estimated) 2,704,083 2,704,083 quarter of 2020. % Change over 2019 -10.6 -10.6 Occupancy Rate 58.6 58.6 % Change over 2019 -16.7 -16.7 Operational Bed Capacity (Avg.) 50,869 50,869 Major Tourism Indicators % Change over 2019 14.5 14.5 Registered Bed Capacity (Total) 52,319 52,319

% Change over 2019 12.9 12.9 At the end of the first quarter of 2020, the Average Duration of Stay (Days) 7.6 7.6 registered number of establishments in the % Change over 2019 1.3 1.3 Maldives reached 968 with 52,319 beds. Within st these registered properties, on average 949 Table 3- Major tourist indicators, end 1 Quarter facilities with 50,869 beds were operational. 2020

7 TOURISM QUARTERLY REPORT – 1st QUARTER 2020 2020. The occupancy rate of tourist MVR 1,433,163,704 and tourism land which accommodation facilities stood at 58.6 % by the amounts to MVR 174,147,459. end of March 2020, which is a decline of -16.7% The total tourism revenue for the first quarter to 2019. The average duration of stay for the first of 2020 is MVR 1,922,393,420. quarter was 7.6 days.

Taxes and Fees Total (MVR) tax 235,990,586 Cancellations and Reservations TGST 1,433,163,704 Tourism Registration and license Fee 2,291,671 Lease Period Extension Fee 76,800,000 Tourism land rent 174,147,459 In the efforts to monitor the impact of the novel Tourism Administration Fee 0 coronavirus to the tourism industry, the Ministry Total Tourism Revenue 1,922,393,420 of Tourism started to collect cancellation and *Source: Maldives Inland Revenue Authority reservation data commencing from 26th January 2020. Data for January is limited to only from 26th Table 5- Tourism Revenue, end 1st Quarter 2020 st to 31 January. Month Cancellations Reservations January 11,357 26,771 February 83,552 222,628 March 347,043 128,046 Total 441,952 377,445 th st

Data for January is from 26 -31 January Includes only submitted data, Does not include estimates for missing data.

Table 4- Cancellations & Reservations, end 1st Quarter 2020

For January and February, reservations exceed cancellations by two folds or more. As the pandemic aggravated, cancellations surpassed reservations almost by 3 folds. Cancellations started surpassing reservations since 7th March 2020, the date on which Maldives recorded its first coronavirus case.

Tourism Revenue

Table 5 shows the different tourism revenues from January to March 2020. The major sources of tourism revenue are TGST which amounts to

8 TOURISM QUARTERLY REPORT – 1st QUARTER 2020