How can the Maldives Tourism Industry Achieve the 5TMP’s target of $6 billion in tourism receipts by 2027?
The recently released 5th Tourism Master Plan (5TMP) called upon all industry stakeholders to collaborate to reach a target of USD 6 billion a year in international tourism receipts by 2027. Tourism receipts are the expenditures by international inbound tourists in Maldives. The target was determined through consultation with industry stakeholders, the Ministry of Finance, and Maldives Association of Tourism Industry based on the latest data from the Maldives Bureau of Statistics and Maldives Monetary Authority.
Prior to the pandemic, the Maldives international tourism receipts were USD 3.16 billion in 2019. The Maldives tourism industry has experienced a strong post-covid recovery, but the target set in the 5TMP is nearly double the pre-pandemic international tourism receipts. Tourism receipts for 2023 are estimated to be around USD 4.2 billion according to The Ministry of Finance’s Maldives Macro Economic Policy Coordination Committee.
The master plan acknowledges the target can only be achieved with collaboration from all industry stakeholders. The approach should be balanced to meet environmental, social, and economic needs. The 5th Tourism Master Plan recommends four areas to focus on to reach the target.
- Increase tourism’s contribution to GDP
To reach the target, the government must prioritize the growth of the tourism industry. Increasing tourism revenue and tourism’s contribution to the nation’s GDP is essential to reaching the target. Currently, tourism directly contributes to 40% of the Maldives GDP. Indirectly, tourism also supports Maldives’ fisheries, construction, trade, finance, agriculture, and communication industries.
- Increase utilization of current accommodation capacity
Bed nights must increase to reach the target. Tourist bed nights are predicted to grow 8.8% a year. 13 million bed nights are estimated for 2023. This number is expected to grow to 18 million by 2027. The industry should focus on increasing occupancy rates, especially during the off-season months in existing accommodations. Investment in additional beds should be focused in the northern and southernmost atolls to spread the wealth and productivity of the tourism industry across the archipelago.
- Bolster aviation capacity
Investment in transport infrastructure, especially by air, is necessary to support $6 billion in tourism receipts. In order to reach the target, it is estimated that international flights to Maldives will need to increase by 25-40%. Domestic aviation capacity will need to grow by 50-60% to support demand. Significant investment must be made in aircrafts and airport infrastructure.
- Empower local labor force
The greatest barrier to achieving the target is the availability of local labor. A considerable number of jobs will need to be created to support $6 billion in tourism receipts. The current local labor force is not large enough and experiences skill gaps. Training to bridge skill gaps and increased productivity is necessary. Above all, the local labor force should be empowered to support the target.
The ambitious international tourism receipts target set by the 5MTP can only be achieved with the collaboration of all industry stakeholders to create a competitive and sustainable tourism industry. The fifth tourism master plan mentions that the international tourism receipts target and its indicators will be reviewed annually and amended if needed.
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