The Maldives was well known as a high-end tourism destination since the establishment of tourism in 1972. The country was labeled as an expensive place to spend a vacation among its visitors, due to the limited accommodation options in the country. The tourism sector was dominated by high-end resorts for decades. However, with the granted permission in 2009, to operate guesthouses in the local islands brought a revolution to the tourism industry in the Maldives. Since then guesthouse sector has been one of the fastest-growing sectors in the tourism industry.
Currently, the sector accounts for over 18.7 % of the total bed capacity in the Maldives. According to the Ministry of Tourism, as of June 2019, there are over 555 registered guesthouses and 554 operating guesthouses in the country with over 9111 beds. However, there are many operating guesthouses in the country without official registration, hence, the total number of beds in operation is currently estimated to be over 10,000 beds. The figure is expected to be double in the next 5-7 years.
Guesthouses play an important role in the Maldives tourism industry and the country’s economy. It gives visitors a cheaper alternative for mid to low market segments, which results in an increase of the tourist flow to the country. It also plays an important role in the tourism benefits diversification process.
As the resorts are isolated from locals, tourists don’t get much opportunity to visit locals during their holiday in the Maldives. Their total tourism expenditure goes to the host resort. However, guesthouse helps the entire island community. Tourist gets the opportunity to visit local shops, café’, restaurants and other facilities in the host Island, and the money spent directly flows within the island community. This results in multiplier effects and it benefits the entire island community.