Introduction
Many countries worldwide could build a robust economy due to the tourism industry. Tourism can be defined as a slow trip that immerses a person in various cultural activities (Huang and Jordan, 2021). About 5% of all tourist travels are destined to subtropical and tropical islands due to the proximity of the oceans, warm climate, and unique nature (Shakeela and Weaver, 2018). According to Bhatti and Nawaz (2020), “tourism generates a revenue for the host economy, creates many job opportunities, brings development in a country’s infrastructure, and creates a cultural exchange between foreigners and citizens” (p. 100).
Although this sector is dependent on various external factors, it provides substantial income to the population. Furthermore, governmental agencies of these states strive to create favourable policies, encourage international collaboration, and attract foreign finances (Shakeela and Weaver, 2018). These sites have an enormous promise for cooperation with the biggest Tour Operator in the UK. Therefore, this case study aims to assess tourism in the Maldives and evaluate the benefits of entering this market. The Maldives’ governance, economy, environment, and legislation make it a favourable candidate in building international tourist cooperation.
Introduction to the Maldives
The Republic of Maldives is an archipelagic country located in the Indian Ocean. The Maldives Archipelago consists of 1192 small islands that are divided into seven provinces and twenty administrative regions (Stevens and Froman, 2019). This country’s tourism industry was started in 1972 and became the primary source of income (Bhatti and Nawaz, 2020). However, only 150 of these atolls are used as resorts, 194 islands are inhabited by the Maldivians, and the remaining are desolated (Stevens and Froman, 2019). Almost 99% of the country’s area is water, with only 300 km2 of land (Miller, 2018).
The Maldives is also known to have 2040 types of coral reefs, which serve as an attraction for tourists and as a food source for the local population (Miller, 2018; Stevens and Froman, 2019). Furthermore, this country occupies the seventh position for reef size and biodiversity (Shadiya, 2021). Moreover, the Maldives beaches are considered the finest globally, allowing visitors to appreciate the ocean’s warm water and white sand on the seaside (Masters, 2021). Indeed, the diversity of its nature and rich culture continues to fascinate visitors from different countries.
The Maldives is one of the most popular destinations for tourists who prefer spending their vacations on a beach. The local tourism industry had only two resorts with a limited capacity in the 1970s, and it has expanded to 147 recreational spots with more than 34,000 beds in modern times (Imad and Chan, 2021). In fact, tourism comprises 25% of the country’s GDP, growing by 13% each year (Miller, 2018).
Since the Maldives’ tourism sector focuses on providing customers with five-star quality services, it made it the desired resting place for people worldwide. For example, as shown in table 1, the number of tourists has grown from 315,000 in 1995 to 1.7 million in 2019 (Sathiendrakumar, Jaffur, and Seetanah, 2021). Moreover, the contribution of the local communities to the development of this industry is enormous (Giampiccoli, Abdul Muhsin, and Mtapuri, 2020). However, it appears that despite the significant potential of this site, the amount of investments did not increase significantly (Sathiendrakumar, Jaffur, and Seetanah, 2021). Therefore, collaboration with the UK’s largest tourist firm may benefit this sector in the Maldives and expand the Tour Operator’s global influence.
PESTLE Analysis
Understanding the Maldives’ social, political, and economic situation is crucial before establishing contacts with the local tourist agencies. Therefore, the PESTLE analysis, which stands for a political, economic, social, technological, environmental, and legal framework, will be conducted to assess the country’s actual capacities and promises (Table 2). Furthermore, it will allow identifying strengths, opportunities, and potential downsides of the Maldivian market to supply the British Tour Operator with sufficient knowledge to create its offices and resorts in this country.
Table 2. PESTLE analysis.
Political
The political situation in the Maldives is relatively stable because it does not have any armed conflicts. Although there was some opposition between the Democratic Party of Maldives and the Progressive Party of the Maldives, the essential decisions are now regulated at the national level (Ratter, Hennig, and Zahid 2019). Furthermore, the Republic of Maldives has a centralized government led by the president (Techera and Cannell-Lunn, 2019). Since the Maldives was the British Empire’s colony in the past, its Islamic system of regulation is primarily influenced by UK laws (Techera and Cannell-Lunn, 2019). Moreover, even though the government introduced tourism taxation for environmental protection, the taxes are reasonable; thus, it remains a desired destination for visitors (Adedoyin et al., 2021). Overall, the politics of the Maldives seems supportive of sustainable tourism development.
Economic
The speed of Maldives’ economic development allowed it to transform into a developing state within several decades. Indeed, the international tourism and hospitality business revived the economies of many countries because of the inflow of investments (Shakeela and Weaver, 2018). According to Miller (2018), the Maldives is one of the few countries “that has graduated from a least developed country to a developing country” (p. 152). Furthermore, the Maldives is considered a nation with a high foreign exchange rate (Shakeela and Weaver, 2018). Therefore, the economic situation of this state is advantageous for foreign investments and cooperation.
Social
The social circumstances also predispose the Maldives for further expansion of the tourism industry. Since this sector is the country’s largest employer, the citizens perceive it as an opportunity to rise above the poverty line (Giampiccoli, Abdul Muhsin, and Mtapuri, 2020). Moreover, the two official languages of the Maldives are Dhivehi and English, simplifying synchronization of the British business model, allowing the Tour Operator to employ the local population (Techera and Cannell-Lunn, 2019). Notably, according to Auzar, Bani, and Ishak (2020), if the income of UK citizens continues to rise, the number of British tourists to the Maldives will also increase. These two factors should be advantageous for the UK’s Tour Operator to enter the Maldives’ market.
Technological
Technological development is an essential element of any industry in the age of digital advancement, and the tourism sector is no exception. The tourist companies in the Maldives have successfully adopted information technologies (IT) (Bhatti and Nawaz, 2020). Indeed, the implementation of IT in this industry “provides the required information to the tourism supply chain management to perform their practices more effectively” (Bhatti and Nawaz, 2020, p. 100). Furthermore, modern navigation and communication methods made this place safe for tourists (Bhatti and Nawaz, 2020). Although more finances should be brought to the country to improve technologies in the Maldives, the solid foundation is already available for the immediate start.
Environmental
The warm weather and the proximity to the Indian Ocean allowed the Maldives to reach leading positions in the tourism industry. Indeed, the climate of this region is a tropical monsoon that enables comfortable temperatures year-round with two monsoons annually (Stevens and Froman, 2019). Furthermore, the biodiversity of marine and terrestrial species is vast, attracting millions of tourists from around the globe (Miller, 2018). It appears that the country’s geographic location, tropical climate, and rich nature facilitated the prosperity of the tourist sector.
Legal
Before entering the market, it is essential to learn legislative opportunities and restrictions for tourism in the Maldives. For instance, the Maldives Foreign Investment Act and the Uninhabited Islands Act regulate financial operations and regions suitable for this industry (Techera and Cannell-Lunn, 2019). Although all agreements require the Ministry of Tourism approval, this sector is relatively independent in the Maldives (Shakeela and Weaver, 2018). Moreover, the first and second Tourism Master Plans were aimed to strengthen the private sector and facilitate investments in tourism (Sathiendrakumar, Jaffur, and Seetanah, 2021). Notably, the fifth Tourism Master Plan highlighted the necessity of strengthening the security and safety of tourists (Sathiendrakumar, Jaffur, and Seetanah, 2021). Thus, the legislative domain is beneficial for international collaboration in the sphere of tourism.
Tourism Impacts
Despite the substantial economic benefit of the tourism industry for the Maldives, this sector can have a negative impact on the nature of the archipelagos and local culture. Specifically, it may result in the rise of waste at the coastlines, a reduction in the biodiversity of flora and fauna, and the destruction of local customs and traditions (Stevens and Froman, 2019). The government of the Maldives signed the Rio Declaration and the Stockholm Declaration to promote sustainable development within the country (Techera and Cannell-Lunn, 2019). Furthermore, the government introduced special tourism and green taxes, which did not significantly affect the rate of visits to the local resorts (Adedoyin et al., 2021). Still, these measures seem to be insufficient in eliminating the damage mentioned above to the environment of the Maldives.
The first problem resulting from further expansion of this industry is waste on beaches that pollute the ocean waters. To exemplify, the average tourist resort in the Maldives generates approximately 3.5 kg of waste per capita (Stevens and Froman, 2019). Furthermore, rubbish is not utilized on specific plants but is left on the uninhabited islands (Stevens and Froman, 2019). Since remnants of modern lifestyle were not segregated and disposed of properly in this country, governmental agencies had to determine effective methods of litter reduction. Therefore, the Green Fund was formed in the Maldives to regulate waste disposal and manage other pollution caused by tourism (Shumais and Mohamed, 2020).
The Fund organizes annual clean-up events to remove litter from atolls. For instance, the volunteers collected about 1.5 tons of waste on one of the small islands in 2017 (Stevens and Froman, 2019). Moreover, the government’s third Tourism Master Plan was aimed to harmonize this industry and nature because the pollution produced by the former is toxic for marine and terrestrial species (Sathiendrakumar, Jaffur, and Seetanah, 2021). Still, the main problem of litter production and aggregation remains.
The proposed solution is advocating sustainable tourism among visitors through social media. Indeed, the advantage of social media is that it “has been widely acknowledged in gaining public support for sustainability initiatives” because it spreads information quickly and shapes people’s perspectives (Imad and Chan, 2021, p. 111). Hence, creating pages on Facebook, Instagram, or Twitter that promote the preservation of the nature of the Maldives and recommending all visitors to connect to these accounts can be the first step to waste reduction. Furthermore, asking tourists to collect and segregate all the litter after resting on a beach may be effective in lowering garbage accumulation.
Lastly, the government should consider building a factory for waste utilization on one of the atolls. Overall, the best strategy for resolving this issue appears to be increasing awareness about the negative consequences of pollution and preventing waste accumulation in public places.
The second problem that can stem from tourism augmentation is the destruction of local culture. In fact, customs and traditions undergo changes in countries with a high rate of external visitors. At the initial stages of tourism development in the Maldives, foreigners displayed behavior incompatible with the religion of the indigenous population (Shakeela and Weaver, 2018). Thus, the Department of Tourism tried to prevent a negative impact on culture by prohibiting nudity, alcohol, and gambling on islands populated by the citizens of the Maldives (Shakeela and Weaver, 2018). Furthermore, the government was determined to minimize the interaction between the local people and tourists; however, this strategy was an impediment to cultural exchange.
The possible solution for the second issue is promoting local customs among tourists and presenting the country’s historical legacy. For example, organizing events to demonstrate the Maldivian traditions and talking about its history to foreigners can effectively increase its popularity and raise national pride. Indeed, the fourth Tourism Master Plan aimed to involve local communities in this sector to facilitate cultural interchange (Shakeela and Weaver, 2018).
Furthermore, the fifth Tourism Master Plan emphasized the importance of preserving natural resources, encouraging research in the sphere of renewable energy, and “conservation of Maldives’ heritage and culture” (Sathiendrakumar, Jaffur, and Seetanah, 2021, p. 139). Nevertheless, many citizens remain unengaged in this process of building guesthouses and interacting with visitors. Therefore, the UK Tour Operator has an enormous opportunity to expand its business in the Maldives by collaborating with the government and population of this archipelagic country.
Recommendations and Conclusion
The UK’s largest Tour Operator can gain a significant profit by entering the tourist market of the Maldives. However, before starting its activity on these islands, the Tour Operator should consider the four recommendations. The first suggestion is to establish a partnership with one of the local firms to launch the Tour Operator’s model. The second recommendation is to build a British resort on one of the desert atolls. The third piece of advice is to offer the local government help in creating an effective waste management system that will show the Maldivian politicians the assets of maintaining this cooperation. Lastly, the Tour Operator should monitor and respond to revisions and comments of online users about its services in the Maldives to implement timely modifications.
To summarize, the Maldives’ political, environmental, economic, social, technological, and legal conditions are favourable for tourism expansion and establishing international collaboration in this sector. Indeed, the Maldives is an archipelagic country with a tropical monsoon climate and diverse nature, attracting visitors from around the globe and enabling the country’s transformation from the least developed into a developing economy. The PESTLE analysis revealed that the Maldives is a rapidly growing economy with a high international exchange rate. Overall, it also showed that the laws and peoples’ attitudes create a positive context for the further prosperity of this industry.
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