Business & Tourism – Page 70 – Minivan News

Finance Ministry appeals for cooperation with cost-cutting measures

The Finance Ministry has appealed for cooperation from all state institutions to the government’s cost-cutting measures by not hiring additional staff, creating new posts or replacing vacancies.

A budget circular issued by the ministry on Sunday notes that expenditure on state employees accounts for 35 percent of government spending in the 2011 budget while 49 percent of government expenditure so far this year (excluding foreign loans and free aid) was on salaries and allowances.

“Lately a number of institutions have been requesting permission from the ministry to add new posts in 2011 and hire employees for vacant posts,” reads the circular signed by Finance Minister Ahmed Inaz. “However since the ministry believes that, considering the state of the budget, there is no space to add employees or fill vacant posts this year, the ministry urges cooperation for controlling the number of employees.”

As part of the government’s belt-tightening measures to curb expenditure, the circular notes, the Finance Ministry requires offices and state institutions to seek authorisation in writing for capital expenditure and overseas trips as well as repair and maintenance work.

The ministry had previously informed all state institutions to not create new posts or fill vacancies, the circular noted.

“In addition, posts of employees who leave their government jobs under the ministry’s “voluntary redundancy programme” has been abolished,” it added. “The ministry believes that as a result of this programme expenditure on employees out of the state budget will be controlled to an extent.”

The Finance Ministry recently revealed that the country’s fiscal deficit in 2011 reached Rf1.3 billion (US$84 million) in the first week of September.

The circular meanwhile noted that the government has pledged not to raise nominal wages until the end of 2012 under the staff-level agreement with the International Monetary Fund (IMF).

In May, the IMF gave preliminary approval for a three year economic programme in the Maldives, after the government agreed to “a package of policy reforms that will help stabilise and strengthen the Maldives’ economy.”

“In sum, this package of proposed policy reforms will help stabilize and strengthen Maldives’s economy, and the mission thus reached a staff-level agreement with the Maldivian authorities on a three-year economic program that could be supported by a new IMF lending arrangement,” reads an IMF press statement in May. “The agreement reached, however, remains subject to review by IMF management and approval of the IMF’s Executive Board, which could consider a program request from Maldives in July. It is anticipated that an approved program would encourage key donors to contribute additional financial support.”

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Amana Takaful seeking to “kick start” Maldives stock market with landmark IPO

Sharia-compliant insurance company Amana Takaful will issue 800,000 shares in an initial public offering (IPO) on the Maldives Stock Exchange (MSE).

In a first for the country, 20 percent of the shares will be made available to expatriates and 15 percent to overseas applicants. The remaining 65 percent will be offered to Maldivians.

The Sri Lanka-based company hopes to generate Rf16 million (US$1.4 million) in proceeds through the IPO, by selling shares at a low issue price of Rf20 (bundled in packages of 25).

Amana Takaful’s board of directors announced the IPO on Monday afternoon at the Nasandhura Palace Hotel.

CEO of Amana Takaful Maldives, Hareez Sulaiman, said the IPO would “change the way the Maldivian Stock Exchange operates as this will be the first time that Maldivians, expatriates and foreigners will be able to purchase securities in a Maldivian listed company.”

The decision to price the shares low “at a price affordable to any average Maldivian” also promised to “be a kick starter for an active stock market which may benefit the entire economy at large,” the company said in an accompanying statement.

The company expects the Sharia-compliant nature of its business to be a key attraction in the market, it noted in its prospectus, with the “growing religious awareness within the domestic market further reinforcing [Amana Takaful Maldives’] decision to embark on expanding its shareholder base in the Maldives.”

Globally, Director of Amana Takaful Osman Kassim, also chairman of the first licensed Islamic bank in Sri Lanka, Amana Bank, explained that Islamic finance was “a phenomenon worth 1.4 trillion and growing at a rate of 20 percent annually.”

It functioned, he explained, through the prohibition of riba, or interest.

“Taking a return without participating in the risk of the return is not allowed, be it 1 percent or 99 percent. Any additional revenue is riba,” he said. “Even if you give a loan and he gives a gift, and is not in the habit of giving a gift, that is also riba.”

Islamic finance in its current form emerged 40 years ago, Kassim explained, first in Egypt and the Arab Emirates.

“It promises to be a just system. Interest is oppression – the charging of something where nothing is due,” he said, noting that in the wake of the global financial crisis, “All major banks now have Islamic financing products, and the more adventurous have their own Sharia Councils.”

Certain terminology used in Islamic finance was now routinely used in normal banking, he said, also observing a rise in financial offerings that were all but labelled Sharia-compliant.

In its IPO prospectus, the company predicted strong potential growth on the back of a higher disposable income as the rufiya eased against the dollar, brought on by a “significant” decrease in the cost of imports.

The key areas of the Maldivian economy – fishing and tourism – had shown strong growth, the company noted. Tourist arrivals grew 18 percent in 2010, while bed nights grew 13 percent even as capacity grew by almost 3000 beds to roughly 24,000.

Fishing was a key area of interest to the company given the high number of insurables. The industry had registered a slight decline in productivity in recent months, the prospectus noted, but nonetheless annual fish purchases had increased 29 percent and fish exports by volume had risen fourfold. Higher prices had led to 77 percent increase in monthly earnings.

The company has set a target of 30-40 percent growth in the Maldives, identifying a key market as the local, atoll and city councils following the government’s policy of decentralistion.

“Considering the current trends in religious conciousness, it is generally believed that the level of awareness and preference for investing in Sharia- compliant investments would be greater at the grassroots level,” the company noted.

It also indicated its intention to offer a micro-insurance product in the Maldives targeting the expatriate market.

The IPO will open on September 20 and close on October 19. The company has pegged a minimum subscription of Rf 2.4 million (US$156,000) or 15 percent to proceed with the IPO.

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Two ton shipment of new five rufiya notes “routine”, says MMA

A shipment of newly-printed five rufiya notes brought in last week is part of a “routine” process and not intended to finance either the fiscal deficit or government expenditure, the Maldives Monetary Authority (MMA) has said.

According to a press statement issued by the MMA yesterday, the stock of five rufiya notes was running low and the new notes would be stored at the state treasury.

“This is routine work, every now and then we print different notes when the stock runs low,” explained MMA Executive Director Abdul Hameed Mohamed. “We print notes as often as is necessary. We are surrounded by water, fishermen handle it, it gets lost and sometimes we have to replace these old notes.”

Abdul Hameed stressed that the new notes would have “no effect on circulation” as it will be stored in the treasury and that there would be “no increase in the money supply.”

“As you know, the central bank in any country always prints money to replace damaged notes,” he said. “Replacing notes is something we do daily.”

Local media reported today that the shipment of new notes was brought in 40 boxes weighing 2.4 tons on an Emirates flight that landed on the morning of September 13.

“The MMA has brought in newly printed money while President Mohamed Nasheed has signaled that money might have to printed if the reduced amounts from civil servants salaries had to be given back,” reads a report on Sun Online.

Abdul Hameed speculated that “the only reason this has become news is because of the President’s remarks.”

In late 2009, the current administration ceased deficit monetization – printing money to finance the fiscal deficit – and the MMA introduced open market operations to mop up excess liquidity.

MMA Governor Fazeel Najeeb told press in August 2009 that printing local currency in previous years had led to the current dollar shortage as “there is too much rufiya chasing too few dollars.”

Prior to 2009, the MMA printed new money to issue loans and overdrafts to plug the expanding budget deficit – stoking inflationary pressures due to excess local currency in circulation.

Meanwhile in lieu of printing money and accumulating domestic debt, in December 2009 the new government began issuing US dollar denominated treasury bills to finance the deficit.

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Tourism sails on with luxury in fragile setting

Maldives tourism has made an impressive comeback since the 2009 global recession, and investment from China and India is expected to surpass precedents in coming years, finds a report from Care Ratings Maldives.

Nonetheless, the Maldives occupies a precarious market, and government controls limit foreign investment, the ratings agency found.

In 2005 Asia surpassed America as a tourist destination, coming in second to Europe. According to Care Ratings, Foreign Tourist Arrivals (FTA) surged this year as China’s economy flourished and European economies made a slow comeback. Chinese tourists are projected to account for 15 percent of Maldives FTA by 2020.

Plans are being made to expand capacity accordingly. The Maldives tourism sector will add 77 new resorts and increase bed capacity by 47 percent over the next three years, the report finds. Additional safari vessels are also expected to be added to the industry, which already boasts a fleet 150 strong.

By the end of 2011, the report projects the direct employments in tourism will have grown from 35,000 to 38,000. Fifty percent of these are likely to be expatriate hires.

Revenues are also expected to increase by 10 percent by the end of the year, claims the report.

Tourism is the largest contributor to Maldives national GDP and foreign currency, however the sector is restricted and vulnerable. The reports lists terrorism, global economic crisis, and limited land and human resources as obstacles to growth. It also points out that environment is a major factor of success.

“The tourism industry is capital-intensive in nature due to the high cost involved in leasing the land, developing the land and constructing a self-contained tourist resort,” states the report. Maldivian resorts frequently sell the appeal of the natural environments, but the Maldivian construction industry lacks the capacity to process raw materials.

Importing processed materials drives the average resort room construction cost up to US$30,000 to US$60,000, one of several factors which makes tourism in the Maldives a high-end market.

Human capital is mentioned as a complicating factor. Resort employment could account for one-tenth of the Maldivian population, 32 percent of which is unemployed. However, only half of resort employees are Maldivian.

Coincidentally, a recent study found that social stigma limited female Maldivian employment in the resort sector to 3 percent, a number far below the demographic’s potential.

Another challenge to growth is government oversight. “The industry now is very much regulated by the government of the Maldives,” states the report. “Tourism is now developed and managed according to country-wide policy based on a master plan.”

All Maldivian islands are government-owned, and resorts can only be leased for 25 to 50 years. Construction is limited by the “One Island One Resort” policy, which allows only one resort per island, and structures are limited to 20 percent of the land available.

Over the past three decades, the ministry has introduced three tourism master plans.

Although the report recognizes the complicating effect of government restrictions on developers and investors, it states attributes these plans with significant growth.

“The growth of the industry in the last couple of decades was mainly due to the efforts taken by the government to promote the tourism industry and the progress was largely on a planned path determined by the First Tourism Master Plan (1983-1992), the Second Tourism Master Plan (1996-2005) and the Third Tourism Master Plan (2007-2011).”

The Maldivian government also created the Maldives Marketing and Public Relations Corporation (MMPRC), which promotes the Maldives as a brand in the world tourism arena.

Last week, MMPRC recognized the value of the Asian travel market by co-hosting a travel agents networking event with GMR. In a nod to the region’s booming business culture, MMPRC MD Simon Hawkins pointed out the advantages of hosting meetings at Maldives resorts.

MMPRC aims to draw 1 million tourists to the Maldives by the end of 2012.This year, the Maldives reached 700,000 arrivals by September.

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Details lacking in government expenditure statement: DRP

The first of weekly government expenditure and income statements made public by the Ministry of Finance and Treasury this week lacks detail and does not serve to promote transparency, contends the main opposition Dhivehi Rayyithunge Party (DRP).

DRP MP Dr Abdulla Mausoom, also a member of the parliament’s Public Accounts Committee, told Minivan News today that the party “welcomed” the government following through on its pledge to publicise government expenditure on a weekly basis.

“But half the truth is often more deceptive than lies,” he said. “First of all, there were no details in the statement. It was just categorised expenditure without any detail of the expenditure.”

While the Health Ministry has spent Rf744 million (US$48 million) this year, said Mausoom, “we don’t know what the money was spent for or where it went.”

“The whole health sector was corporatised,” he said. “But basic health services have not improved. There is a lack of equipment or facilities that need to be renewed and there’s always talk of how more doctors are needed.”

DRP Deputy Leader Ahmed ‘Andey’ Mohamed meanwhile explained that if a household servant was given Rf100 for shopping and asked to provide details of expenditure “for him to say I spent Rf50 at shop A, Rf30 at shop B and Rf20 at shop C does not mean he provided any details of what he bought.”

Citizens should be made aware of details of expenditure and the services provided with public funds, he added.

One of the “main areas of concern”, said Dr Mausoom, was Rf1.9 billion (US$123 million) spent out of the Finance Ministry’s contingency budget.

“That is almost Rf2 billion. Where did that money go?” he asked, adding that reduced amounts from civil servants salaries that the government was ordered to pay back by the courts had not been released.

The DRP MP for Kelaa also questioned whether the Rf489 million (US$31.7 million) released to state-owned enterprises so far this year could be categorised as “investment.”

A number of “dodgy companies” were dealing with domestic corporations, such as regional utilities and health corporations, he continued, and planning for “unfeasible business projects” with surveys and Memorandums of Understanding.

“A lot of cost would be incurred for that and it can’t really be considered investments,” he argued, revealing that there were 62 government-owned corporations.

Moreover, as a footnote of the expenditure and income summary stated that the figures were taken from reports that “have not been reconciled or audited,” Dr Mausoom suggested that “the numbers are likely to be understated” and subject to change.

“So there are a lot of unanswered questions,” he said. “But it is good that this has been made public because we are able to raise these issues. If the government wants to dispel all doubts, they should provide full details down to the last laari, which won’t be that hard to do.”

Finance Minister Ahmed Inaz was not responding at the time of press.

Deficit spending

Meanwhile among the highest spending line ministries and institutions were the Education Ministry with Rf1.2 billion (US$77.8 million), the Home Ministry with Rf751 million (US$48 million), Housing Ministry with Rf652 million (US$42 million) and local councils with Rf359 million (US$23 million).

According to the statement put out by the Finance Ministry, government expenditure (Rf7.5 billion) outstripped revenue (Rf6.3 billion) by 20 percent between January 1 and September 8, 2011.

As a consequence, the fiscal deficit reached Rf1.3 billion (US$84 million) at the end of last week.

In addition to Rf3.2 billion (US$207.5 million) spent on salaries and allowances for state employees – the single largest source of expenditure – Rf2.4 billion (US$155.6 million) was needed to cover recurrent expenditure or administrative costs.

Capital expenditure was meanwhile Rf1.2 billion (US$77.8 million) while spending on debt service reached Rf563 million (US$36.5 million).

DRP Deputy Leader Ahmed Mohamed observed that capital expenditure – capital outlays for local component of development projects, fixed assets maintenance and investments for state-owned enterprises – was “only 17 percent of the budget” while recurrent expenditure was over 75 percent.

In December 2010, parliament approved a Rf12.37 billion (US$802 million) annual state budget with a projected revenue of Rf8.8 billion (US$570.7 million) and recurrent expenditure of Rf9.8 billion (US$635.6 million) – 49 percent of which was to be spent on salaries and allowances.

The forecast for recurrent expenditure was 79 percent of government spending.

In March this year, the International Monetary Fund (IMF) warned that “significant policy slippages” have undermined the country’s ability to address its unsustainable budget deficit.

“On the expenditure side, there have been no net fiscal savings from public employment restructuring, public sector wages will be restored to their September 2009 levels earlier than expected, and the new Decentralisation and Disability Bills will lead to considerable spending increases,” the IMF noted in a statement.

The IMF said that while it recognised “the difficult political situation facing the authorities”, “decisive and comprehensive adjustment measures” were required to stabilise the economy, allow sustainable growth and reduce poverty. In particular, it raised concern about the “lack of significant progress in public employment restructuring.

Dr Mausoom meanwhile insisted that as government revenue was expected to exceed previous forecasts because of new tax revenue and reach almost Rf10 billion (US$648.5 million), “the deficit should be reduced by a corresponding amount to the boost in income.”

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MACI Build Expo positive about construction “boom”

The Maldives Association of Construction Industry’s (MACI) annual exhibition concluded today at the Dharubaaruge Centre in Male’, after enduring three days of gloomy weather and a lower-than-expected turnout.

The annual event showcased over twenty construction companies and their newly developed or imported products. Sales people interviewed said that the event was a significant business opportunity each year, and that sales were expected to improve.

“Every year we are introducing new products,” said Ali Shaathir of MUNI Homecare. “These products have a good impact on construction–they are safer, and friendly to the environment.”

Veligaa Hardware representative Muaz Mohamed said that construction would continue to “boom” in the Maldives. “You can always see construction on Male, and Hulumale is just beginning to boom,” he said.

Other companies represented included Humaru Maldives, Polytechnic Maldives, Thilafalhu Industrial Zone, and Habitat. Several observed that resort construction played a significant role in the industry.

One construction sector said to interest resorts is renewable energy. Earlier this week, President Mohamed Nasheed told an international audience in London that the Maldives needs to become carbon neutral.

Renewable Energy Maldives (REM) representative Maufooz Abdullah said that although eco-construction isn’t prominent, it is growing. “People are actually interested here and in resorts, and some are even buying our products,” he said.

REM currently sells solar-hybrid air conditioning units to residents and businesses around the country. These units recover their cost in two years, and are said to be used across Male. Abdullah said that use of REM products could reduce pollution “by 30 to 60 percent”.

“We hope environmentally friendly construction practices grow in the Maldives, it’s catching on slowly but we hope it moves faster.”

Abdullah said the MACI exhibition was valuable to the industry, but wished more people would benefit from it.

“I think it’s a very important event for educating people about the industry, but I don’t see too many people coming in.”

Maldives Income Revenue Authority (MIRA) said that construction was important to the Maldivian economy. Representatives noted, however, that the new Goods and Services Tax (GST) bill, due to become active on 2 October, will “have an effect on wholesale and customer prices.”

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Details of government spending and revenue made public

Government expenditure outstripped revenue by 20 percent between January 1 and September 8, 2011, according to the first of weekly expenditure statements made public by the Ministry of Finance and Treasury yesterday.

While government income reached Rf6.3 billion (US$408.6 million) at the end of last week, government spending however stood at Rf7.5 billion (US$486.4 million), resulting in a fiscal deficit of Rf1.3 billion (US$84 million) financed by loans and sale of Treasury bills.

Capital expenditure was meanwhile Rf1.2 billion (US$77.8 million) while spending on debt service or debt repayment reached Rf563 million (US$36.5 million).

President Nasheed announced at a ceremony held in August to unveil the government’s ‘Fiscal and Economic Reform Programme’ that the government would publicise details of expenditure on a weekly basis.

Recurrent expenditure was expected to be 79 percent of government spending.

An additional Rf200 million (US$12.9 million) was injected to the budget in anticipation of the local councils that came into being in February this year.

Plugging the deficit

In March this year, the International Monetary Fund (IMF) warned that “significant policy slippages” have undermined the country’s ability to address the ballooning budget deficit.

The IMF warned that the Maldives economy was presently unsustainable, on the back of “expansionary fiscal policies” from 2004 which left the country especially vulnerable to the decline in tourism during the 2008-2009 recession.

The country’s fiscal deficit exploded on the back of a 400 percent increase in the government’s wage bill between 2004 and 2009, with tremendous growth between 2007 and 2009. On paper, the government increased average salaries from Rf3000 (US$195) to Rf11,000 (US$713) and boosted the size of the civil service from 24,000 to 32,000 people – 11 percent of the total population of the country – doubling government spending from 35 percent of GDP to 60 percent from 2004 to 2006.

An internal World Bank report produced for the donor conference in May 2010 meanwhile noted that increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, which was “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

President Nasheed told delegates at the conference that the government was “committed to financial prudence and long-term stability.”

“We have scrapped the reckless policies of the past, which saw money printed to finance a growing budget deficit,” he said, adding that the government was working with “international multilateral organisations, to ensure we do not spend more than we can afford.”

On the size of the bloated civil service, Nasheed said, “In the past, the government offered people jobs not because there was work that needed doing. The government offered people jobs as bribes; to get their allegiance to a repressive regime. Almost 10 per cent of the population works for the government – a staggering amount.

“And there are more civil servants than there is work to be done. Many government employees are under worked; chained to demoralising jobs. Our administration will therefore dramatically reduce the number of civil servants. But we must provide loans for outgoing civil servants, to help them set up businesses or acquire new skills.”

In April, the government announced a programme to incentivise voluntary redundancy in the civil service.

“Political backlash”

A UNDP paper on achieving debt sustainability in the Maldives published in December 2010 meanwhile observed that former President Maumoon Abdul Gayoom responded to growing calls for democratisation in 2004 with “a substantial fiscal stimulus programme” of increased government spending, “much of which was not related to post-tsunami reconstruction efforts.”

When the impact of the worst global recession in decades struck the Maldives in September 2008, “the Maldivian economy was already in the middle of a severe economic crisis with substantial fiscal and current account deficits, high liquidity growth, double digit inflation, pressure on the fixed exchange rate, increases in public and private sector debt, rising inequalities between the capital and the atolls, and a costly civil service.”

However the new government’s efforts to reduce government spending with pay cuts of up to 20 percent along with plans to downsize the civil service – which employs a third of the country’s workforce – was met with “a severe political backlash from parliament.”

“In March 2010, the parliament passed a 2010 budget with amendments which increased the government’s proposed budget by 7 percent (or 4.5 percent of GDP),” the paper noted, referring to parliament’s addition of Rf800 million (US$51 million) to the 2010 budget.

“Three quarters of this increase funded a reversal in civil service wage cuts implemented the previous year. Progress on redundancies has also been slower than expected and reforms in this area are unlikely to be completed until the end of 2011 at the earliest. This will have important fiscal consequences.”

In July, the Finance Ministry publicised details of expenditure on state employees, showing that Rf1.6 billion (US$103 million) had to be spent on salaries and allowances for 20,476 civil servants.

State wage expenditure	Annual expenditure on salaries and allowances	Percentage of total wage bill or expenditure on employees
Civil servants or employees under the executive (excluding political appointees and councillors)	Rf1,596,029,007	39 %
Uniformed bodies	Rf1,001,489,486	24 %
Political appointees in the executive branch	Rf99,178,980	2 %
Administrative staff at the President’s Office	Rf27,326,730	1 %
Councils	Rf717,250,030	17 %
Judiciary	Rf210,282,463	5 %
People’s Majlis or legislative branch	Rf79,210,718	2 %
Institutions dependent on state budgets	Rf393,620,943	10 %

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Bodu beru dancers and water cannon salute welcome first scheduled flight from Seoul

Tourists on the first Mega Maldives flight arriving in Male’ direct from Seoul in South Korea this morning were greeted by bodu beru dancers and airport staff handing out coconuts.

As the plane taxied off the runway, two of the airport’s fire engines shot water cannon in an arc over the plane. The 158 bemused passengers were greeted at the top of the stairs by CEO of Mega Maldives George Weinmann, and accompanied through immigration by pilots and flight crew.

Speaking at a press conference of local and South Korean journalists later this morning, Weinmann observed that while the flight was not the first direct flight from Seoul, it was the first such scheduled service and the first for a Maldivian carrier.

All four of the airline’s routes launched this year, he observed, were to cities not previously served by direct flights including Hong Kong, Beijing, Shanghai and now Seoul.

“We believe this will increase the total demand for the Maldivian [tourism] product, and also create new opportunities for trade such as exports to Korea,” said Weinmann, a former rocket and satellite engineer with aerospace giant Boeing.

Weinmann said the decision to fly to Korea was influenced by the discovery that South Korea was operating five flights daily to Hawaii, such was the appeal of the iconic tropical destination to the Korean market.

“The flight time to Hawaii from Seoul is nine hours, similar to the flight time to Male’, and the total price of hotels is also similar,” he noted. “This will allow for the development of a lot of new business and trade.”

megalanding2 — A water cannon salute greets Mega's first flight from Seoul

Korean arrivals to the Maldives increased 54 percent in 2010 compared to the previous year, from 16,000 to 24,000, suggesting that the country was a rapidly growing market for the Maldives. Weinmann has previously told Minivan News that Mega’s niche is to have flights from Asia that arrive during the day, thus avoiding the need for Asian visitors to overnight in Male’ or Hulhule’ while waiting for daytime transfers.

MD of the Maldives Marketing and Public Relations Corporation (MMPRC), Simon Hawkins, acknowledged that the South Korean market had been neglected as far as tourism promotion was concerned, in favour of traditional markets such as Europe.

“We aim to remedy that, now that we have identified South Korea as an emerging market. We want to appeal not just to honeymooners, but also families and organisers of meetings, conferences and exhibitions,” he said.

Chief Commercial Officer of Ibrahim Nasir International Airport, Prasad Gopalan, meanwhile cited a report stating that South Korea was ranked third in rising numbers of millionaires, after India and China.

“We have done our research – South Korea is an emerging market for the Maldives,” he said.

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Maldives hosts networking event for Asian travel reps

The Maldives is currently hosting representatives from over 30 tour and travel companies from across Asia, as part of a ‘Discover Your Island’ campaign to increase tourism from these countries.

The representatives were flown to Male’ by Singapore Airlines, while airport developer GMR and the Maldives Marketing and PR Corporation (MMPRC) set up a networking event with local resort and tour operators at Nasandhura Palace Hotel.

Speaking at the launch of the event, MD of the MMPRC Simon Hawkins observed that tourism arrivals had grown 15 percent year on year, and Maldives was expecting to reach one million visitors a year by November 2012.

“We currently spend US$2 million to bring in one million visitors. By comparison Indonesia spends US$70 million to bring in seven million,” he said.

The Maldives had historically based its marketing strategy on the twin drawcards of sun and sand, but need to differentiate itself given increasing competition with other destinations offering the same attributes, he said.

“One island one resort means that in the Maldives you can have a three star resort within several hundred metres of a six star resort, and everyone is happy and satisfied,” he said, explaining that most other beach destinations had roads, hawkers and crowded beaches.

“In the Maldives [tour and travel] operators have a hundred islands to choose from.”

In spite of the jet-lag, representatives spent the better part of two hours exchanging business cards with local resorts and travel operators,, reviewing services and exploring new opportunities.

Several representatives expressed interest in Hawkin’s suggestions for Maldives tourism, such as an increased focus on the high quality dining offered by many resorts and safari operators, and emphaised that individualising the customer’s experience was a priority.

Marketing and communications managers at the event meanwhile said that growing interest from the Asian market was driving their plans for the future. But other resort representatives indicated that adapting to emerging markets had to be achieved without alienating existing, established markets.

“The new Asian demand is very important, but the resorts that were designed to suit European travelers are trying to find a balance,” said Reethi Rah Sales Executive, Stephen Cordebas. “We don’t want European guests, especially those who come regularly, to feel like the whole package is changing to suit a new market.”

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