– Considering the fast-evolving nature of the COVID-19 crisis, it is extremely challenging to forecast international tourist arrivals to the Maldives during the year 2020.
– World Tourism Organization (UNWTO) estimates international tourist arrivals could decline by 20% to 30% in 2020. This would translate into a loss of 730 to 1097 US$ million international tourism receipts to the Maldives.
– The UNWTO forecast should be interpreted with caution in view of the magnitude, volatility and unprecedented nature of the COVID-19 crisis. There are a few references to be made. SARS-2003 had no major impact on the Maldives. The Sep-11 attack in the U.S. (1% decrease in arrival), 2004 Tsunami (36% decrease in arrival) and the 2009 global economic crisis (4% decrease in arrival) are some references, but the COVID-19 crisis is like no other. Thus, it is important to monitor and simulate the impact of international tourist arrivals to the Maldives.
– Given the lack of case studies, we turn in to academic literature. The three most important determinants of tourism demand are tourist’s income, the price of tourism product, and exchange rate (Sinclair, 1998; Song et al., 2012; Witt & Witt, 1995). Most studies suggest that explanatory power of income depends on tourists originating country. Thus, GDP per capita income, expressed in purchasing power parity, is often used as a proxy for tourist income (Chasapopoulos & Butter, 2014).
– Research suggests that long-term economic recessions in the main tourism markets will have a significant impact on tourist destinations such as the Maldives (Zuhuree, 2017). For example, data suggests that 2007-2009 downturn in the European Union and Global Economic Crises significantly contributed to the stagnation of the European market in the Maldives.