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.