The COVID-19 crisis has constricted travel across the world, with over 95% of countries still implementing some sort of movement ban or restriction. As a country solely dependent on tourism, this has inflicted heavy damage upon the Maldivian economy, causing serious spikes in job loss and redundancy across its industries. So, what exactly does this mean for employment in the tourism sector?
Tourism is the main industry in the Maldives, contributing 21% to the country’s GDP directly. Tourism receipts totaled USD 3.2 billion in 2019 and the industry, directly and indirectly, accounts for a high portion of government revenue.
In a report published by the National Bureau of Statistics, a total of 44,954 employees were working in tourist resorts in 2019; locals accounted for 47% of these employees. When considering the ratio of male to female employees, there is a significant difference between the genders. Out of the total employees, 10% of them were female, and only 3% were local females.
While it is obvious that tourism has been the main driver behind the country’s strong economic growth and low unemployment rates over the years, the industry is highly sensitive to manmade and natural disasters. Large fluctuations may occur due to a number of factors such as political instability, natural disasters, global terrorism, and in this case, pandemics.
According to official forecasts by the Maldives Monetary Authority and the Finance Ministry, the losses caused by the COVID-19 pandemic are grave, to say the least. The real GDP of the country is expected to decline by -11.3% in the best-case scenario, -17.8% in the moderate case, and as much as -26.4% decline in the worst-case scenario. The forecast for tourism sector GDP ranges from -39.8% in the best case, -56.4% in the moderate case, and -74.8% in the worst case.
It is a challenge to accurately predict how tourism employment will fare as a result of the recessionary shock. The data changes rapidly, as is the nature of this virus. However, a rapid livelihood assessment conducted by the Ministry of Economic Development and UNDP has found that approximately 22,000 local payroll employees of resorts are currently being affected due to COVID-19.
Job security beyond July is uncertain for the majority of these workers; experts forecast a slow recovery for the Maldivian tourism industry as occupancy levels are unlikely to normalize until the end of the first quarter of 2021. Although a number of resorts are preparing to reopen, many of which already have, it will be done with minimal operations and a skeleton staff structure.
As the pandemic persists in tightening its grip over the globe, the tourism industry will likely need public sector support to cushion the blow. The livelihoods of thousands of employees depend on it, as well as reducing the potential knock-off effects on their families and communities.
