NewsJanuary 30, 2020

Changing Tides of Luxury Tourism in Maldives

By Yoosuf Rasheed

Early 2000’s Maldives saw a change in its tourism; a hike up in room rate, the 4 digit ADR’s, and healthy occupancies brought a new tide of exclusive modern travelers.


Once where it was only a villa with direct access to the beach with minimal but compulsory in-room amenities and having its own public pool on the resort was a luxury. However, this was all changed with the new breed of resorts coming with its own private pool villas, spas, personal butler service etc.

Prior to this big shift resorts offering were rather simple and local to many extend. A new benchmark was set for the industry, which caused a remarkable and significant shift in the landscape of Maldives tourism as a whole, and set new benchmarks for International Tourism as well by introducing the world’s first and, at that time only, underwater restaurant and first underwater spa of the world. Maldives became a hot bed for global hotel industry player and investors promising quick returns. Now nearly two-decades after the big leap, we are here in a different environment.

Luxury resorts has become the new mass of the industry where each new resort have got all villa with private pool, butler service, and an International brand name. But this came with change where every corporate meeting which used to be fun and laughter has become weekly intense hours of going through slide after slide as the occupancy has become uncertain with new changing trends.

Room rates are going back to 3 digit ADR from the previously healthy and profitable 4 digit ADR, and continues shrinking every day. The new trends have led resort managements more towards cutting cost at any cost given the market situation. On the other hand, for the resort sales team well, there is no question they are always looking for new leads, but with every new room added to the inventory of ever growing availability of rooms or villas rate is slowly moving down.

So the question is, what went wrong? Did we lose our peak days or is luxury travel disappearing completely? Do we need a bigger sales force or bigger marketing campaign or much bigger Instagram and celebrity stunt with that million followers of bots?

I believe we need that bigger Sales and Marketing team and I also think the landscape of tourism today that has changed inevitably.

Clients previously paid top dollar for their exclusivity and it was just a handful of top resorts with those exclusive offerings unlike now, where you have a $40,000 a night villa next to the $400 a night villa and sometimes even surrounded by them. The exclusive setting is disrupted and invaded for the sophisticated luxury customer.

The new customers are forcing the industry to shift to their needs of flash sales or 50% discount with all-inclusive offerings. These are their needs and their demands that they are willing to pay for.

There is nothing wrong with that and resorts need to readjust with new customer a great example of this is Finolhu in Baa Atoll a local brand how they secured and anticipated 2019 trends already in 2018 under the previous management.

So what happened to the Luxury customers? Did they leave? Will they ever come back?

From what we see in customer behavior, they never left. They have been moving around different resorts within Maldives looking for that exclusive setting. That ambiance and calmness. For these customers a new class of resorts are already on the horizon. A secluded peaceful private enclave as some may describe. Already we can find them in existence such as Four Season Voavah, a Private Island, Owners Villa at Cheval Blanc or the Private Island on the new Waldorf Astoria or a resort like Velaa Private Island where the standards of rates are not being compromised & rates remain high throughout the year and not scarified for the mass.

While change is a challenge I think this is truly a moment that we all need to be proud of our industry growth, especially for the people in it for their creativity and hard work. This new growth we see today has also brought important changes for the people in the form of more standardized industry for the people working and there is much more to be accomplished for all stake holders of the industry. Exciting times are ahead.

About the author: Yoosuf Rasheed is a seasoned Maldives luxury travel specialist and was most recently part of launching the first Intercontinental resort in the Maldives.