Even though the year 2017 began with a promising performance of 15.6% growth in tourist arrivals in the month on January, the quarter averaged to a modest growth rate of 4.3% compared to the first quarter of 2016 with an arrival total of 359,053 tourists registered at the end of March. This is mainly due to the poor performance in the months of February (0.3%), and March (-2.1%).
Looking at the rest of the demand side indicators, tourist bed nights grew by 0.2% while the occupancy rate saw a drop of 10.2% and the average duration of stay reduced by 0.2% which is 5.6 days compared to the same period in 2016. Yet, despite the lower growth in arrivals, the operational bed capacity showed an increment of 18.5% in the first quarter.
The regional markets indicated strong positive growth in the month of January except for the Middle East, reflecting the strong arrival growth recorded for the month.
Contrastingly, a steep decline was identified during February from Asia and the Pacific region while the rest of the markets shows impressive growth rates including the Middle East.
Finally, the month of March experienced negative growth rates from most of the regional markets including the largest two source markets- Europe and Asia and the Pacific leading to an overall negative arrival growth (-2.1%) for the month. Positive growth rates were only noted from Africa and the Americas which holds a less significant portion of the market share.
Moving to the regional source markets, at the end of first quarter, Europe has been leading with a share of 53.9%, while the Asia and Pacific was the second largest with a 37.9% share. The European region was holding the largest share in the first quarter of 2016 as well. However, the majority of inbound international tourists belong to Asia and the Pacific region during the past couple of years. Yet, the trend depicts that Europe has been picking up while there has been a slow decline in the number of tourists from the Asian region.
Top 10 markets
Evaluating the performance of the top ten national source markets for inbound international tourists, the first quarter recorded a reduction of 7.8% in the incoming tourists from the top market- China. Though the number of visitors from China has been steadily increasing for most destinations around the world, tourists from China visiting the Maldives has been reducing recently, putting a downward pressure on the overall number of tourists from Asia and the Pacific region.
Negative arrival growths were identified from other key source markets as well including an -11.4% from Germany, -1.1% from the United Kingdom, and -7.5% from Switzerland. Meanwhile, strong growth rates were experienced from Italy (22.2%), Russia (41.5%), India (21.1%), and U.S.A (15.5%).
Inventory and Performance of the Accommodation Facilities
As of the end of the first quarter, the number of registered and operational accommodation facilities in most categories increased. The number of operational guest houses spiked from 93 in the first quarter of last year to 420 at the end of quarter one, this year, while the number of hotels remained stagnant.
With the huge increase in a number of guest houses during the quarter, the operational bed capacity from the guest houses rose by 135.1%, while there was an increment of 26.4% from safari vessels, 11% from resorts and 3.1% from hotels compared to the same period in the year 2016. However, regardless of the escalation in the number of guest houses, a sizeable chunk of the operational bed capacity is still coming from resorts.
Likewise, occupancy rate has always been highest for resorts with 76.9% in quarter one, 2017, while the occupancy rate stood at 46.5% for hotels, 23% for safari vessels and just 9.8% for guest houses. The low occupancy rate for guest houses may reflect the disproportionate expansion of the bed capacity of the guest houses in comparison with the growth of mid-tier tourism. Furthermore, negative growth in occupancy was experienced by all the categories of accommodation except for hotels which also did not see any noticeable rise in the operational bed capacity.
Based on the performance of the first quarter of 2017, a slow, yet positive overall growth in tourist arrivals is expected for the year while the rest of the market demand indicators seem to follow a similar pattern in the following months.