When Maldives government relaxed its strict "enclave resort tourism" policy to pave way for the growth of guesthouse tourism in the Maldives, the industry in an overall capacity observed a dynamic shift.
The island nation's tourism industry which once was fully reliant on enclave resort tourism witnessed a paradigm shift towards the growth of local tourism in light of state policies promoting the creation of guesthouses and boutique hotels across residential islands. The luxury tourism segment was suddenly facing healthy competition from the budget tourism segment.
Moreover, this in turn reflected in the tourist arrivals to the Maldives over the last decade prior to the Covid-19 pandemic. As such, in 2019 the total tourist arrivals according to the Ministry of Tourism reached above 1.7 million which itself was in excess of the year's target by the government. Furthermore, a great portion of the total arrival in the said year had been budget travelers looking for island hopping and local tourist properties amid their stay in the Maldives.
Taking a stroll down the memory lane, one would observe that the enclave resort tourism or more fashionably known in the Maldives as the "One Island-One Resort" (OIOR) was first modified in 2008 by the Maldives parliament after nearly 25 years since tourism industry began booming across the archipelago.
As such the second amendment of the Maldives Tourism Act (Act No. 2/99) allowed for the expansion of the tourism industry by breaking out from the confines of the enclave resort convention the island nation had been accustomed to for years. The amendment paved way for the development of tourist properties in residential islands; apart from hotels.
This also meant that there were shifts in the stakeholder segments and powers as well, which were reflected following the amendment to Maldives Tourism Act in 2008. As such there have been a notable power struggle between the advocates of the enclave resort tourism or One Island-One Resort (OIOR) tourism policy and the new guesthouse policy. Meanwhile, government officials at policy making levels or authority had foreseen the future of tourism economy where both resorts and guesthouses function in coherence; either in symbiotic fashion or at least as a parallel.
But the issue comes out when there is a visible power disparity between the stakeholders; mostly in terms of the stakeholders with an acute interest in OIOR policies having stronger control and power over those who favor guesthouse tourism policies. The variables at play here may differ and perhaps even be subject to interpretation for the casual viewer – but if profoundly assessed then one would notice that it all boils down to the income generated from tourist resorts are comparatively stronger than the revenues from individual guesthouses in annual terms. Thus, those who hold direct stakes in tourist resorts have the upper hand in terms of the fiscal worth.
However, since the 2010s, the power spectrum has gradually shifted towards creating a balance between luxury tourism and local tourism, a great deal of this was achieved due to responsible policies put forward by the government of Maldives that oversaw the formation, creation and development of the guesthouse industry by providing ample opportunities to local hoteliers and tourism industry affiliates to develop their properties in residential islands.
Maafushi is a remarkable example of state's initiatives coming to successful fruition as well as a testament on responsible policies that ensure sustainability of tourism segments – especially since the country's tourism industry for the first four decades had predominantly functioned through enclave resort tourism.
There is no doubt that change is a common factor in everything human – even in human lead economies and this statement is not hyperbole. As such, the tourism industry itself had to undergo change and evolution in order to survive the test of time. The integration of a new tourism policy that lead to the development of an entirely new segment of the tourism industry – meaning the birth of the guesthouse industry – is the visible result of this which is no longer up for debate.
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