Resorts run in Maldives by Sri Lanka-based John Keells Hotels have posted strong gains in occupancy and average room rates, underlining the recovery in the Maldives tourism industry.

In its financial report for the year ended March 31, parent company John Keells Holdings said occupancy in its Sri Lanka resorts stood at 80 percent during the year while that in the Maldives was at 89 percent, enabling a superior result with the group profit after tax up to Rs. 1.86 billion (USD 12 million) from Rs. 1.75 billion (USD 11 million) a year earlier.

John Keells said tourism was growing both in the Maldives and in Sri Lanka, with Sri Lanka posting a 14 percent growth in arrivals during the year while they were up four percent in the Maldives. The drop in Chinese tourist arrivals to the Maldives was partly mitigated by stronger demand from Europe, and South and South East Asia, it added.

Sri Lanka’s largest hotel operator expects growth of the informal accommodation segment in the Maldives and in Sri Lanka to continue together with the increase in star category rooms. In order to combat pressure from competition, it will focus on enhancing online bookings with Online Travel Agents and its own website coupled with digital marketing initiatives.

More specifically, the company’s Maldives resorts will seek to maintain market share in current source markets and capitalise on opportunities arising from the launch of Air France flights to the Maldives from November.

John Keells has a portfolio of 1,337 four and five-star rooms in 11 hotels across Sri Lanka and the Maldives. In the Maldives, the company runs the Cinnamon Hakuraa Huraa Maldives, Cinnamon Dhonveli Maldives and Ellaidhoo Maldives by Cinnamon.

After years of double-digit growth in tourism, the Maldives has over the recent years observed a slowdown in growth. Tourist arrivals have crossed the one million milestone and is on course to reach 1.5 million by the end of this year, but the country has been struggling to create demand amidst a significant increase in bed capacity.

Over the past three years, dozens of uninhabited islands have been leased to local and foreign resort developers. Several international brands have entered into the market, increasing the number of resorts to 120. That number is set to increase as the government has announced the opening of some 20 new resorts by the end of this year.

Along with the new resort openings come the challenge of increasing demand from budget travellers who choose guesthouses over luxury resorts that the Maldives is known for. The guesthouse sector has rapidly expanded with over 300 guesthouses in operation today.

However, the strong performance of John Keells’ resorts in the Maldives is another welcome sign and is in line with a recent rebound in tourism, which saw arrivals and revenue increase.