Connect with us

Business & Tourism

Steep decline in Chinese tourist arrivals continues

As of August this year, Chinese arrivals have fallen by -11.5 percent, prompting Mega Maldives Airlines, which pioneered direct flights to China, to downsize and freeze hiring plans.

Published

on

A steep decline in the number of Chinese holidaymakers, the largest tourist market for the Maldives, continued in August with an -11.3 percent fall in arrivals.

Total arrivals, however, increased by 1.9 percent compared to August 2015, according to statistics released by the tourism ministry on Thursday, a month later than it was expected to be made public.

After growing exponentially from 2010 onward to capture a market share of 30 percent, Chinese arrivals peaked in 2014 with about 364,000 visitors and declined for the first time in 2015 by -1.1 percent.

As of August this year, Chinese arrivals have fallen by -11.5 percent. Some 260,491 Chinese tourists visited the Maldives from January to August, down from 230,437 last year. However, Chinese tourists still represent a market share of 27.3 percent.

Citing the slowdown in its core market, Mega Maldives Airlines – which pioneered direct flights to China five years ago – announced layoffs and downsizing plans in late August.

The Maldives’ largest international airline made 65 positions redundant and froze hiring to fill 50 vacancies.

Mega Maldives said it foresaw the slowdown in Chinese arrivals but was forced to reconsider or delay a planned diversification of its route network.

Meanwhile, in an op-ed for newspaper Mihaaru in July, Mifzal Ahmed, co-founder and vice president of strategy at Mega Maldives, rebutted the government’s contention that domestic economic problems in China were to blame for the decline.

Chinese tourist arrivals in similar destinations such as Sri Lanka, Mauritius, or Bali saw double-digit growth in 2015, he observed.

Mifzal suggested that reasons for the decline could range from “the price of Maldivian holidays compared to competitors, the popularity of other forms of holidays like cruise ships or travel agents making better profits by selling other destinations.”

He recommended enlisting a Chinese market research firm, convening a meeting of tourism industry stakeholders, and identifying how other countries are attracting Chinese travellers.

“The Chinese traveller has been the one reason why the true effects of the Global Financial Crisis that hit western countries in 2009 were not felt so badly in the Maldives,” Mifzal wrote.

“Today, our tourism sector is infinitely healthier for having a balance of Chinese and European travellers because it reduces seasonal variation in hotel occupancy. This is something for which we are the envy of many of our competitors and it would be a disaster for us to lose it.”

On September 28, the tourism ministry hosted a one-day conference on destination marketing and promotion. Industry professionals gathered to discuss data-intelligence research conducted in collaboration with the LexisNexis Group of Consultants.

One of the key topics was findings from a market study in China and a suggested marketing plan.

Speaking to reporters at the conference, Tourism Minister Moosa Zameer meanwhile conceded that the government’s target of 1.5 million tourist arrivals in 2016 will not be met, blaming bad press generated by the opposition’s alleged scaremongering about religious extremism.

The revised forecast is 1.4 million, he said, the same target that was missed in 2015.

Driven by growth from traditional European markets, tourist arrivals have increased by 2.3 percent as of August, reaching 842,635 visitors.

However, reflecting falling resort occupancy rates and shorter durations of stay, goods and services tax collected from the tourism sector have fallen by -7.7 percent as of September.

The tax authority collected US$196 million from January to September, down from US$212 million in the corresponding period last year. But with new resorts opening for business this new year, the tourism land rent increased by 8.4 percent to US$63 million.

Tourism GST accounted for 24 percent of total revenue collected by September, according to the latest monthly report by the Maldives Inland Revenue Authority.

According to the tourism ministry, the occupancy rate at resorts was 77.2 percent in August, down -2.1 percent from August 2015. The occupancy rate has fallen on average -2.7 percent as of August.

However, the occupancy rate at guesthouses increased by six percent from January to August as the midmarket tourism sector continues to grow.

After China, the United Kingdom has the highest market share with 8.1 percent, followed by Germany (7.9 percent), Italy (5.7 percent), India (4.6 percent), Russia (3.4 percent), and France (3.3 percent).

Indian tourists have increased by 21.4 percent as of August. Arrivals from the UK, Italy, and Germany also grew by 10.1 percent, 8.5 percent, and 2.1 percent, respectively.

However, arrivals from France fell by -5.7 percent and growth from Russia flatlined at 0.6 percent. Arrivals from Russia and France registered significant declines in 2015, falling 33.2 percent and 17 percent respectively.

Popular