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Tourism Insights from the World Bank

The Changing Face of Tourism and Work

How Maldives is successfully adapting to the pandemic, along with other parts of South Asia.

South Asia’s tourism heavy nations, like Maldives, are well poised to take advantage of new services and digital technologies along with a new-found need for wellness post-pandemic, to boost their economies. (image: WorldBank.org)

by Yi (Claire) Li & Valerie Mercer-Blackman

It’s December 2023. Rita, a young businesswoman, has just finished meeting with clients in Chennai, India and anticipates meeting friends in Singapore for the holidays two weeks later. An employer-sponsored hybrid work model allows her to work from anywhere. She chooses to work at a guesthouse in Male, Maldives thanks to great Internet connectivity while spending time absorbing the local culture and South Asian cuisine, even trying her hand at snorkeling.

Pre-COVID-19, she would have had to fly back from Chennai, India to snowy Chicago where she resides; go to the office for 10 days; work fighting an arduous jetlag; and then fly back East almost 10 thousand miles to Singapore. Now not only is she significantly reducing her carbon footprint, but she also feels revitalized after her stay in the Maldives, and is happier and more productive. Not to mention, she has contributed to Maldives’ tourism industry.

Is Rita’s practical yet creative twist on work-life balance indicative of the future of tourism — and work?

According to various measures in the World Bank’s latest South Asia Economic Focus (SAEF), the region’s tourism heavy nations — Maldives, and to a lesser extent Nepal, Sri Lanka, and Bhutan — are well poised to take advantage of new services and digital technologies along with a new-found need for wellness post-pandemic, to boost their economies . See a prior blog on services as the driver of development in South Asia.

Tourism: Savior for a Post COVID Economy?

Before COVID-19, tourism was among the fastest-growing sectors in Maldives and Bhutan, with a growth rate that outpaced GDP growth rates. The pandemic and related stringent measures hit all South Asian countries dependent on tourism hard, leading to a deep contraction in GDP in 2020. According to the World Travel and Tourism Council, the entire global tourism industry, particularly business travel, was devastated by the pandemic.

Business spending decreased by 61 percent from 2019 to 2020 compared to 49 percent for leisure travel. Business travelers on average spend much more than leisure and domestic travelers, making the recovery of business spending essential for the entire travel sector. As the industry struggles to recover, there is also great uncertainty about how the future of work could transform the demand for travel, and many expect international business travel to be the last segment to recover as it is most sensitive to travel restrictions.

The government’s policies and interventions around border restrictions and health regulations play an important role in the recovery of the tourism sector in Maldives. (image: WorldBank.org)

However, despite these uncertainties, our analysis in the South Asia Economic Focus shows that tourism has the potential to be a fast-growing sector post-COVID amidst new remote work possibilities and changing travel behaviors:

South Asian countries already have a comparative advantage in developing niche tourism and ecotourism, as they are endowed with diverse natural and cultural resources. Therefore, small and tourism-dependent countries can view the pandemic as an opportunity to unleash the potential of tourism and pave the way for sustained growth going forward.

Maldives: Setting the Bar High in Tourism

Maldives has been exemplary in its resilience and ability to recover. In 2021, visitor arrivals reached more than 80 percent of pre-COVID levels, far outpacing other similar tourist destinations.

Tourism sector skyrockets in Maldives compared to counterpart South Asian nations, largely due to aggressive recovery efforts and creative marketing. ((image: WorldBank.org)

These are some lessons we can draw from Maldives’ spectacular recovery in the tourism sector:

Adapt or perish? Maldives is choosing the former. It behooves other South Asian nations to pay attention as they build back resiliently post COVID-19.

About the Authors

Yi (Claire) Li, Consultant

Valerie Mercer-Blackman, World Bank Senior Economist, South Asia Office of the Chief Economist

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