Whenever, you think of a relaxing vacation you want sun, sand and sea, a thousand ‘Robinson Crusoe’ islands, massive lagoons with different depths and infinite shades of blue and turquoise. Lots of dazzling underwater coral gardens; a perfect natural combination for the ideal tropical holiday destination and your choice is none other than Maldives.
Maldives is known for its proud history and rich culture evolved from the first settlers who were from various parts of the world traveling the seas in ancient times. Its cultural diversity and natural scenic beauty helps tourism being its basic revenue generating industry.
The Maldives economy has been growing at an annual average of 10% at least for the past two decades. Tourism is the main industry, contributing almost 20% of the GDP; however, fisheries and trade also follow close behind.
The stable Maldivian economy is regarded as exemplary in the region and welcomes loads of foreign investment. Though, in the current global economic scenario, the situation seems to topple.
The Asian Development Bank (ADB) has also predicted a massive slowdown in growth for the Maldives economy like the World Bank, due to the increased expenditure in tsunami reconstruction. The international financial institutions also blame the government policies, leading to increased budget deficits.
Soaring oil prices are threatening the prospects of millions of the region's poor and forcing them further into poverty. And the Maldives is one of the only Asian countries which is unable to control or subsidize the cost of petrol that has also become an issuewith Malé taxi drivers.
Its not only Maldives, with oil prices heading towards US $150 a barrel (July 2008) and will probably reach $200 by the end of the year, demand for air travel is faltering as consumer spending is squeezed and stagflation sets in, all reminiscing the oil shock of 1974, when oil prices rose from $2 to $8 overnight. Combined with falling house prices, tension in the Middle East, food inflation and increased demand for consumerism in China, the world is on a course of meltdown or is this just another recession. So, what are the prospects for world tourism to 2030?
The strong growth in world tourism over the last decade correlates to economic well being. When economies grow, personal income raises which results in the discretionary income being spent on tourism. According to the UN World Tourism Organisation, the growth in international arrivals significantly outpaces economic output. In the recent years when world economic growth has exceeded 4% per annum, the growth of tourism volume tends to be higher at 6.5% per annum. At the same time world economics have always been doom and burst, therefore the present situation is nothing new.
The predicted deterioration in the Maldives economy is directly attached with the impact on tourism industry due to the soaring oil prices and expressed concern that tourist arrival would be reduced. He said that the expected occupancy could not be achieved if oil price continued to rise.
During a conference held with members of tourism industry ways were discussed to advertise and reduce expenses involved in planned holidays. Every year the concerned ministry carries out plans for advertising tourism after collecting ideas from as many industry players as possible, however still they see a risk in the number of tourists.
Forecasting and projecting future international tourism flows has become more difficult over time, because, on the one hand, events such as 9/11 cause a temporary disruption but, on the other hand, climate changes causes more permanent change to tourist flows. Therefore, two scenarios have been prepared based upon different economic growth rates, oil prices, climate change, transport flows and personal disposal incomes.
So, can the world meet the challenges of the ‘end of oil’ and massive impact on world tourism, economic development, prosperity – if not, we will see significant increases in poverty and war.
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