Despite a surge in tourist arrivals this year, the Maldives is seeing lower tourism revenue because many visitors are being offered discounted rates, according to Mohamed Khaleel, Advisor to the President on Tourism Development.
Speaking to reporters at the close of the “Welcome India” tourism promotion roadshows organised by the Maldives Marketing and Public Relations Corporation (MMPRC), Khaleel highlighted the need to address this revenue gap. He noted that the challenge is to balance the increase in arrivals with sustainable income.
Khaleel pointed out that the solution lies in raising the Average Daily Rate (ADR) offered by tourism establishments. He explained that while a rise in tourist occupancy, or “pax,” is beneficial, heavy discounts can erode overall revenue. “We may fill the resorts and guesthouses,” Khaleel said, “but the actual income for the state remains inadequate.”
The gap between increasing tourist numbers and tax revenue further compounds the issue. Khaleel highlighted that offering services at discounted rates—such as providing a $100 service for $80—reduces the tax base. Even a 5 percent rise in arrivals cannot compensate for the revenue lost due to discounted rates, he elaborated.
The Mohamed Muizzu administration is working to address this challenge, according to Khaleel. Efforts include increasing tourist arrivals and stimulating demand within the Maldives tourism sector. He added that the MMPRC is leading positive initiatives to achieve these objectives.
Tourism Minister Ibrahim Faisal echoed Khaleel’s concerns, noting that despite higher arrivals, revenue remains lacklustre. Faisal emphasised that collaboration is crucial to addressing this issue. The administration aims to increase low-season tourism income by 15 to 20 percent next year compared to the current year, he said.
Despite these challenges, Faisal remains optimistic: “If everyone works together, we can address and solve this.”
