Blue Ocean Strategy to Develop a Competitive Advantage in the Guesthouse Sector in the Maldives

Abstract

The introduction of guesthouses in the Maldives, deviating from the traditional one-island-one-resort model, carved out a new segment in the market. This shift opened up significant business opportunities for locals, as starting a guesthouse required far less capital than developing a hotel or resort. Consequently, the guesthouse sector expanded rapidly, driven by the increased demand from budget-conscious tourists who previously could not afford holidays in the Maldives. However, as this sector flourished, it faced fierce internal competition, with minimal differentiation among offerings. This context sets the stage for examining how Luau Beach Inn created a distinct competitive approach in the rapidly expanding guesthouse market of the Maldives islands using the Blue Ocean Strategy.