India tourists dwindle, Maldives heads to a billion in loss

After a few senior Maldives government officials made derogatory comments at Indian Prime Minister Narendra Modi following his visit to Lakshadweep Islands in early 2024, the geo-political strings between the two countries started to deteriorate.

Indian netizens and celebrities alike launched a massive boycott campaign against the Maldives, either demanding a state apology or removal of the officials from their positions.

The Maldives head of state, Dr. Mohamed Muizzu responded to this with a declaration that no one can bully the Maldives into submission.

Ties with India, a consistent and long-term ally, has turned sour with Maldives government distancing itself without an official apology. 

Some of the senior Maldivian officials and others argued the island nation will not face negative economic impacts.

But the arrival numbers of India in annual terms says a different statement.

Since 2020, amid the global pandemic, and the next two years that followed, India remained the top tourist market to the Maldives with upwards of 200,000 annual arrivals for the said three years. 

As per the statistics released by the Ministry of Tourism, tourist arrivals from India as of March 02nd, showed a 33% decline compared to last year.

In the corresponding period last year, Indian arrivals stood at 41,054 whereas in the current year, arrivals from the market reached just 27,224.

We can pretend as much as we like, but the reality is that Indian arrivals have declined significantly. The boycott campaign by Indian celebrities that included the likes of Akshay Kumar, John Abraham, and others have shown its impact on the arrival numbers to the Maldives.

What was once the top tourist source market is now pushing and slipping between fifth and sixth ranks.

Billion-Dollar Loss; Why is India Instrumental?

Several top-tier properties in the Maldives cater to Indian travelers while a major share of visitors to other tourism segments - guesthouses and city hotels - are from India.

On the other hand, Indian travelers have a counter-travel pattern to European travelers; meaning Indian visitors frequent to the Maldives during hot seasons, which coincides with a drop in European market arrivals. In other words, India is the most significant 'filler' for the Maldives tourism off-peak season.

India plays a vital role in sustaining tourism-related receipts to the state during off-peak season.

Meanwhile, tourism industry experts and analysts highlight the adverse impacts of dwinling Indian arrivals to the Maldives, while some have forecast estimated losses north of USD 1.8 billion to USD 2 billion.

Travel agencies and operators relying on Indian arrivals report a revenue decline of 80% - a dangerous prospect.

India's importance from industry professionals

An official from Lets Go Maldives, a prominent travel agent, said Indian traveler market consists of multiple demographics and segments from affluent to budget travelers.

"India is a large summer market. Resorts are complaining about arrival decline since it reflects on their revenue. Without India, the occupancy rate is impacted negatively. This makes it a crucial market for us," the official added.

Before Indian netizens and celebrities launched their boycott movement, Maldives was a hot destination for several A-list actors. Actors including Tamil legend Rajnikanth, Bollywood superstar Ajay Devgn and his family, Shilpa Shetty, Ananya Pandey, and Sara Ali Khan among other celebrities have holidayed in the Maldives. During their stay, they offer glimpses of their vacation via social media to millions of followers; meaning, influencer tourism was at a peak in favor of Maldives.

"What we have noticed is an influx of travelers when celebrities post their travel experience on social media. These new travelers, followers of said celebrities, are visiting to try out the destination themselves after their favorite celebrities have endorsed the place; India has been a market that contributed to Maldives tourism like this and in multiple other ways," a veteran tourism promoter from the Maldives said.

"If a star uploads a post of them trying water sports in the Maldives, people flock in droves to try these things out for themselves."

The promoter highlights Indian tourists' keen nature to learn and experience the livelihood of the Maldivian cuisine, culture and heritage, for which they spend extravagantly as well. 

According to the promoter, Indian guests arriving in the Maldives for honeymoon celebrations tend be generous spenders.

"Indian honeymooners and families are rather generous with their money, so they bring significant amount of cash with them as well," they said.

Speaking from experience, the promoter adds tourism revenue during hot season declines noticeably if Indian tourist arrivals are low - which is attributed to several properties exclusively catering to Indian tourists as well.

Although tourist arrivals to the Maldives observe increment in annual terms, majority of these guests spend their vacation in guesthouses or other cheaper tourist properties instead of resorts. Besides this, the average duration of their stay in the Maldives is shorter, which in turn adversely effects the revenue.

Prominent travel agency, Travel Connection Maldives' CEO Mohamed Mirshad said advance bookings from Indian guests ceased in light of the political row between the two countries. He further emphasized the impact this had on arrival numbers and tourism-related receipts; all negatively impacting the economy eventually.

Mirshad notes the arrival of affluent and wealthy Indian-origin travelers from other nations as well; which too indicates the contribution of the Indian market in Maldives tourism. 

Majority of these travelers have since stopped their visits to tourism haven of South Asian region.

"Based on our bed capacity, European and Middle-Eastern markets alone cannot fill the occupancy, whereas India is a large single-source market. The increased air connectivity between the two countries is yet another reason for Indian travelers seeking vacation options in the Maldives," Mirshad said.

Industrial experts, while accentuating the negative impact of the drop in Indian arrivals, have also noted damage control measures to mitigate further risks.

Experts consensus on the matter is for both India and the Maldives bridge the rift between the South Asian neighbors. Maldives is now in need of a positive PR campaign to clean its image among Indian potential travelers as well, while mend the severed bonds.

The PR initiative and rekindling its ties with India are crucial for the Maldives it aims to sustain tourism income on a long-term basis.

'Sun' media's attempt to get a comment from the Ministry of Tourism for this report was in no avail.

 Geographically and economically, Maldives is not in position to issue pseuo-jingoistic statements while belittling its most constant ally.

Since the Maldives and its locals are known for the hospitality and friendliness to neighbors, this is the most opportune moment for the island nation to mend fences with its ally. It is also logical that the smaller countries are in need of security and safety ensured by their larger allies.

Any conduct to the contrary would not result fruitiously for the Maldives, as evident with the current tourism industry statistics and revenues.

Arrogance will not benefit us, it would damage the sensitive economy of the country even further. True wisdom lies in accepting one's own weaknesses and strengths, and the reality that we live in to avoid any future brunt.