Controversial Boycott Sparks Concerns Over Maldives Tourism

EE News Desk Jan 22, 2024

In the midst of the controversy surrounding the boycott of Maldives by Indian tourists, leading to a series of cancellations, the tourism sector is bracing for potential distress in the upcoming months, reveal media reports.

Sonu Shivdasani, Founder & CEO of Soneva, which comprises luxury resorts Fushi, Jani and Aqua in the Maldives and Thailand, noted, “We are still receiving Indian guests, but there were certainly cancellations when the posts first came out. We had a $30,000 booking from a travel agent that was cancelled.

The callous remarks have had an impact on Indian arrivals. There are 180 hotels in the Maldives, and with some India is the main market. I suspect that in the coming months, the Maldives will lose around $25-50 million or more on account of Indian tourists. This will, of course, impact hoteliers who put a lot of effort into creating unique experiences for guests, and, more importantly, the employees of these hotels.”

He goes on, “As per my estimates, if this cancellation continues, the service charge loss to employees in the Maldives hotel industry, which are largely Maldivian, will be somewhere between $2.5-5.5 million.”

Soneva Fushi, established in 1995, emerged as an early entrant among luxury hotels in the Maldives. The Soneva brand derives over half of its revenue from repeat guests, a category that notably includes Indian visitors. “This is high and arguably a record for a destination where the majority of these guests are travelling more than 12 hours to come to us.”

According to information released by the Maldives tourism ministry, India continues to be the leading tourist market for the country in 2023. The Maldives attracted the highest number of visitors from India, recording 209,198 arrivals. Russia secured the second position with 209,146 arrivals, while China claimed the third spot with 187,118 arrivals. In the preceding year of 2022, India retained its position as the primary tourism market for the Maldives, hosting 240,000 arrivals. Russia closely followed in second place with 198,000 tourists, and Britain secured the third position with over 177,000 arrivals.

The Maldives, a vital economic sector for the country, contributes over 28% of GDP and 60% of foreign exchange through tourism.

Rajiv Mehra, President, IATO (Indian Association of Tour Operators), the national body of the tourism industry mentioned, “We are yet to see an impact on bookings,” stating that there haven't been any new booking inquiries following the controversy, but there are relatively few cancellations as individuals have already invested money in their bookings.

In the Maldives, an island nation where Indians play a pivotal role in steering the economy and serve as the primary source market, Jyoti Mayal, president, Travel Agents’ Association of India (TAAI), pointed out, “We are noticing many travellers and members asking to cancel their Maldives bookings as safety is a concern for many tourists.”

On the flip side, there is considerable interest in Lakshadweep, and according to Mehra, “It is far from challenging Maldives as a destination, which is a well-established tourism destination.

At present, Lakshadweep despite its pristine beauty is really not on the tourism map for multiple reasons like quality hotels, police clearance issues and only one direct flight from Cochin International Airport to Lakshadweep’s Agatti Island with Air India subsidiary Alliance Air operating four days a week. Other infrastructure like restaurants, transport, sea sports are not developed. For tourism to prosper, we need these vital things in place.”

The Federation of Hotel & Restaurant Associations of India (FHRAI), the premier body representing India's hospitality sector, has also expressed its commendation for Lakshadweep. Pradeep Shetty, President, FHRAI, & President, The Hotel And Restaurant Association (Western India) – HRAWI brought out, “Lakshadweep will catalyse substantial investments in infrastructure, connectivity and hospitality services, making the archipelago an accessible and coveted destination for global tourists.”