Category: Business & Tourism

Maldives business news

Maldives’ resorts among world’s best, but industry insiders express concern over Green Tax

Three Maldivian resorts have been named among the world’s top 25 hotels by TripAdvisor, but industry specialists have expressed concern over the new green tax and rising prices.

Gili Lankanfushi Maldives placed top in the recently announced Traveler’s Choice Awards, based upon the quantity and quality of reviews posted on the website, while two other Maldivian resorts – Cocoa Island and Constance Moofushi – ranked at number six and fifteen, respectively.

The survey by the world’s largest travel website acknowledged over 8,100 properties based on one year’s worth of reviews and opinions from its 315 million unique monthly visitors.

“We are very glad that three of our resorts got included as top hotels in the world,” said Maldives Association of Tourism Industry Secretary General Ahmed Nazeer.

Four other Maldivian locations were named as part of the top 25 hotels in the Asian region. Baros Maldives was awarded ninth place on the regional list, Soneva Fushi placed 13th, while LUX* Maldives and Komandhoo Maldives Resort earned 21st and 22nd, respectively.

Meanwhile, industry specialists have expressed concern that the Maldives might soon become an overpriced destination due to increasing taxes and service charges, with the latest levy taking the form of a US$6 green tax.

“The green tax will definitely have an impact,” said Shafraz Fazley, Managing Director of Viluxur Holidays to ttgasia.com. “It is (already) becoming too expensive to go to top resorts because of all the service charges and taxes.”

The US$6 green tax was announced in November last year with the tourism minister Ahmed Adeeb saying that the revenue generated from the tax will go into managing waste from local resorts and other islands.

Rising arrivals, rising costs

The tax is part of  new revenue raising measures outlined in the record MVR24.3 billion (US$1.5 billion) state budget for 2015, which also includes the addition of ten resorts to the current 109 registered facilities. These measures are anticipated to raise MVR3.4 billion (US$220 million) in revenue for the government.

The green tax will be introduced 11 months after the abolition of the US$8 per night bed tax, and one year after the hike in the Tourism Goods and Service Tax (T-GST) from 8 to 12 percent. Airport service tax was also raised from US$18 to US$25 in July 2014 for visitors leaving the country.

Maldives Association for Travel Agents and Tour Operators President Abdulla Ghiyas was reported as having told TTG that the resort contracts will be unaffected as the bed tax had been taken into account, though the opposition has previously called the levying of this and T-GST simultaneously as “double taxation” on the industry.

“Have a look at the TripAdvisor Forum,” Michelle Flake from Koamas Luxury Escapes told TTG. “I am sure people are moaning and saying it will be too expensive for them to come soon.”

After receiving more than one million tourists for the second consecutive year in 2014, the tourism ministry estimates that the Maldives will see 1.4 million tourist arrivals this year.

Speaking to Minivan News about the past year, however, Tourism Employee’s Association of Maldives Secretary General Mauroof Zakir said that, despite the increased arrivals, the tourism industry suffered as a whole in 2014.

“Total tourist arrivals have increased compared to the previous year. However, as arrivals from Europe and Russia decrease, less income is generated as the replacing Chinese visitors spend less and stay for lesser periods,” said Zakir.

Last year’s Maldives visitor survey in January 2014 appeared to confirm Zakir’s point, showing that Asian tourists stayed for shorter periods of 3 to 4 days while the average stay for European tourists was between 7 and 11 days.

According to the Tourism Yearbook 2014 – published by the tourism ministry – average duration of stay by tourists is declining, from 8.6 days in 2009 to 6.3 days in 2013.

The Chinese and Russian tourist markets are two of the fastest growing in the world, with arrivals increasing by an average of 54 and 10.7 percent, respectively, between 2009 and 2013.

Adeeb has acknowledged the negative impact of the falling Russian rouble on arrivals, saying that the Maldives must diversify its tourism markets as the international arena “heats up”.


Related to this story

1.4 million figure for 2014 tourist arrivals incorrect, says Tourism Minister

US$6 green tax to be introduced from November 2015, says tourism minister

President Yameen announces development of five resorts in Haa Dhaalu Atoll

Government decides to implement a ‘green tax’ on tourists

Likes(1)Dislikes(0)

President Yameen urges STO to enter international markets

President Abdulla Yameen has called on the State Trading Organisation (STO) to widen the company’s scope into the international global markets.

At a ceremony held at Dharubaaruge last night to mark the company’s 50th anniversary, Yameen spoke of diversifying the company into numerous fields including the establishment of a national shipping line and operation of oil tankers, assuring the government’s support in these ventures.

“We must find ways to reduce the price of oil and to find low priced oil,” Yameen said.

Oil exploration – via the STO’s subsidiary Maldives National Oil Company – was an election pledge of President Yameen, with a German research vessel conducting oil and gas exploration research in August 2014.

Expressing his confidence that diversification into shipping would reduce costs, especially oil prices, Yameen said that the STO cannot always remain a small scale retailer.

The STO is the country’s primary wholesaler, responsible for bringing in the vast majority of basic foodstuffs such as rice and flour, as well as other imported commodities such as electrical goods

The president also warned that “managing directors of state owned companies will change if the companies cannot perform” to the required standard.

Yesterday (January 22), Ibrahim ‘Bandhu’ Saleem was dismissed from the post of Managing Director of Maldives Airports Company Limited (MACL). No specific reason was given regarding the decision.

Yameen said yesterday evening that his office was working with the treasury to audit state-owned companies in order to determine whether they are reaching set targets as well as to categorise the firms and to align their pay structures to ensure employees are paid fairly.

According to Article 212 of the Constitution the auditor general has the authority and power to audit all institutions primarily funded by the state and “any business entity, in which shares are owned by the State”.

The STO launched an austerity campaign twelve months ago, pledging to cut operations costs by MVR50 million by the end of 2014 after President Yameen had declared the company bankrupt upon assuming office in November 2013.

“Not only does STO not have dollars, it does not have Maldivian Rufiyaa either. Funding the oil import through STO is now a burden for the state,” said Yameen at the time of the announcement.

Managing Director at the STO Adam Azim said last month that the company’s debts will be paid off within three years, telling Haveeru that its US$144 million (MVR1.7 billion) debt was unprecedented, and that US$51 million had been paid off during his tenure as a result of reductions in expenditure.

Meanwhile, Haveeru yesterday published corruption allegations against Azim – the brother of recently dismissed Minister of Defence and National Security Mohamed Nazim.

The paper reported that it has obtained a copy of an Anti-Corruption Commission report which says Azim attempted to use the state-owned company’s money to influence the Football Association of Maldives’ congress.

Haveeru suggested the report revealed attempts to have a relative appointed to the post of FAM president through sponsorship money given to football clubs with voting rights in the congress.

Presidential spokesman Ibrahim Muaz said that no decision regarding the removal of Azim had been made and that relevant authorities and institutions will investigate and proceed with the issue of any corruption allegations.

Azim appeared alongside the president at yesterday’s anniversary celebrations.


Related to this story

State Trading Organisation bankrupt: President Yameen

Yameen bring changes to state institutions following Nazim dismissal

STO to pay off debts in three years

Likes(0)Dislikes(0)

Imports up by 22 percent in 2014, exports down by 12 percent

Imports rose by 22 percent in 2014, while exports dropped by 12 percent, the Maldives Customs Service has revealed.

According to a statement from customs today, imported goods in 2014 amounted to MVR30.7 billion (US$1.99 billion), resulting in duties of MVR1.96 billion – a 15 percent rise compared to 2013.

The decline in exports saw the total value of goods leaving the Maldives in 2014 valued at MVR2.24 billion, compared with MVR2.56 billion in 2013.

The latest balance of payments figures from the Maldives Monetary Authority show the current account deficit was US$290 million in 2014 – equivalent to 10 percent of GDP, though the central bank estimates that this will drop to 6 percent of GDP in 2015.

Recent amendments to the Import Export Act – part of a raft of revenue raising measures – are expected to raise MVR533 million (US$34.5 million) in additional income in 2015.

Customs revealed today that petroleum products had contributed the most to last year’s imports, totaling MVR8.3 billion – or 27 percent of the total. Food items comprised 19 percent of the year’s imports while 16 percent was machinery and electronic items, totalling to MVR6 billion and MVR4.8 billion respectively.

The customs third quarterly review for 2014 suggested that the rise in machinery and electronics was largely responsible for the period being the most costly in terms of imports in the past five years.

It was also noted that 65 percent of the goods imported during quarter were sourced the UAE, Singapore, Malaysia, India, and Sri Lanka. These countries made up 62 percent of total imports in 2013.

The export of tuna products to Thailand dominates the Maldives’ exports – constituting 44 percent in the quarter, having received 37 percent of exports in 2013.

An IMF delegation to the Maldives late last year noted that, though the economy is “relatively buoyant”, the widening fiscal deficit as a result of high public expenditure and debt needed to be addressed.

Revisions to estimates of the current account deficit had indicated greater stability in the economy than previously thought, explained the IMF. Previous MMA estimates of the 2014 trade gap suggested it could equal 22 percent of GDP.

During the IMF’s last visit to the country in February this year, the delegation expressed surprise at the resilience of the economy, admitting that it was still studying how the domestic economy has remained afloat in the face of soaring public debt and persistent budget deficits.


Related to this story

Parliament approves import duty hikes

Maldives economy “relatively buoyant” but fiscal imbalances continue to grow: IMF

Majority of dollar receipts spent on imports: MMA assistant governor

Likes(0)Dislikes(0)

Civil court rules against Yacht Tours over West Park dispute

The Civil Court has issued a sentence stating that the Malé City Council is not liable to pay damages to Yacht Tours Pvt Ltd after the company filed a case accusing the council of breaching the terms of the West Park Cafeteria lease.

The sentence issued today (January 13) said that “as it was not proved to the court that the city council had breached the agreement between the council and Yacht Tours, the court does not find the council liable of any damages to Yacht Tours.”

Yacht Tours – owned by former Kaashidhoo MP Abdulla Jabir – filed the case after the city council leased out West Park to former professional tennis player Amir Mansoor in September 2012.

Jabir accused the council of breaching a contract made in 2005, when the city council was known as the Malé Municipality.

The company had accused the council of breaching Article 11 of the contact which stated that the company should be granted the opportunity to extend the contract before it expires, while requesting the court to issue a temporary order prohibiting it from handing West Park to another party.

However, the court sentence today stated that the company was unable to prove it had formally requested an extension to the contract six months prior to the termination as required under Article 11 of the contract.

The Civil Court had previously thrown out the case after the then Yacht Tours Lawyer Mohamed Anil refused to accept a chit handed to him by the court, in which the council accused the company of trying to drag out court proceedings in order to garner profit from the café.

Speaking at the court the second time the case the was filed, former Attorney General Diyana Saeed – also Jabir’s wife – represented Yacht Tours, saying that Anil had refused to accept the chit without consulting the company.

Likes(0)Dislikes(0)

Japan in talks to establish embassy in Maldives

Additional reporting by Mohamed Saif Fathih

The Japanese government has had funding approved for an embassy in the Maldives, reports the Japan Times.

Japan’s foreign minister Fumio Kishida stated that the country aims to bolster diplomatic relations with different countries as the world marks 70 years since the end of the Second World War.

An official from the Maldives Ministry of Foreign Affairs have told Minivan News that negotiations are ongoing regarding the new diplomatic mission.

Japan is one of the Maldives’ largest trading partners, importing over US$5.1 million worth of goods from the Indian Ocean nation in 2013 – a year on year increase of 48 percent. However, Japanese tourists only make up around 3 percent of arrivals to the Maldives.

Statistics available from the fisheries ministry showed that Maldivian fish exports to Japan expanded rapidly last year, growing from US$4.8 million in 2013 to over US$6.8 million between January and October in 2014.

Japan has traditionally donated large amounts of aid to the Maldives, with President Abdulla Yameen explaining during a state visit to Japan last April that that Japan was the Maldives’ most generous aid partner.

Data from the Japanese International Cooperation Agency  (JICA) – which already has offices in Malé – shows that the east Asian nation gave over US$450 million to the Maldives in development assistance between 2004 and 2010.

JICA recently completed the ‘Project for Clean Energy Promotion in Malé’ with the installation of 740 solar panels in 12 government buildings in the capital, at a cost of US$11.1 million (MVR141.5 million).

Other projects benefiting from Japanese aid have included the first mechanisation of fishing vessels between 1973-76, the development of Malé’s seawall between 1987-2003, and the extension of loans amounting to US$34 million for post-tsunami reconstruction.

Last month, the Japanese government gifted the Maldives ¥100,000,000 (US$840,000) in grant aid, as well as contributing MVR13.9 million to assist with repairs to Malé’s desalination plant – partially destroyed by fire on December 4.

The capital city currently hosts five full diplomatic missions – belonging to China, India, Bangladesh, Pakistan, and Sri Lanka. The Maldives has had a full embassy in Tokyo since 2006.

According to the Japan Times, the Japanese government initially requested to create nine new embassies and six new consulates, and has opted to include six  embassies in 2015’s state budget,

In addition to the Maldives, Japan intends to establish embassies in Barbados, the Solomon Islands, Tajikistan, Moldova, and Turkmenistan. Consulates will be established in the Mexican city of Leon and the German city of Hamburg.


Related to this story

President Yameen holds talks with Japanese prime minister

Japan gifts 100 million yen to government, Hitachi MVR1 million to water crisis fund

Likes(0)Dislikes(0)

German airliner Lufthansa to start scheduled flights to Maldives

German national carrier Deutsche Lufthansa AG is to start scheduled flights to the Maldives from December 2015.

Plans to start the flights by Europe’s largest airline were revealed at a special ceremony held yesterday (January 8 ) at Ibrahim Nasir International Airport (INIA) by Maldives Airports Company Limited’s (MACL) Managing Director ‘Bandu’ Ibrahim Saleem.

Speaking at the ceremony, local media reported Saleem as saying that Lufthansa will be operating flights to the Maldives starting from December 9 this year, and that these flights will provide many benefits to the tourism industry.

Aviation website ch-aviation.com reported that the flights are part of a “jump” network project by Lufthansa, with the Maldives, Mauritius, and Mexico the initial destinations.

Also speaking at the ceremony, Tourism minister Ahmed Adeeb said one of the biggest aims of nationalising INIA was to bring bigger airlines into the Maldives, adding that 2014 had been one of the best years for Maldives tourism.

INIA was leased out to Indian Infrastructure giant GMR under a US$500 million contract in 2010 before the following government deemed the deal ‘void ab-initio’ in 2012. GMR have subsequently won an arbitration case leaving the Government of Maldives liable for an amount that could reach up to US$803 million.

“Lufthansa airline is one of the top airlines in Europe. They have previously operated some charter flights to the Maldives, but this is the first time they will be starting scheduled flights,” local media reported Adeeb as saying.

Adeeb also said that one of the most prominent requests made by European tourists is to set up more direct flights to the Maldives without having to transit in the Middle East, and that the request would be addressed by Lufthansa flying to the Maldives directly from Frankfurt, Germany.

According to the tourism ministry, 527,274 European tourists landed in the Maldives last year – amounting to 47 percent of total arrivals. The European airline with the most arrivals was Turkish Airlines with 33,303 arrivals followed by British Airways with 25,798 arrivals.

The industry received a record-breaking of 1.2 million in 2014.


Related to this story

GMR lodges US$803million claim, pleads for award of further damages for loss of reputation

Changi signs consultancy deal as MACL aims for 9.6 million passengers

Likes(0)Dislikes(0)

Youth leaders express support for Akon concert, while religious groups maintain oppostion

Tourism minister Ahmed Adeeb has expressed his joy over the show of support by a team of youth leaders – including MP Yamin Rasheed – in promoting Thursday night’s Akon concert in Male’.

In a tweet hashtagged #ShowWillGoOn and #TeamZuvaanun, Adeeb said he was “happy to see Youth Leaders from all the Political Parties United for a cause, Respect!”.

Maldivian Democratic Party (MDP) MP Yamin Rasheed told Minivan News that he will be involved in promotional activities for the show, acting in his personal capacity.

Meanwhile, the Adhaalath Party has reportedly said this week that it will continue to work to stop the concert going ahead.

MDP Youth Wing President Mohamed Azmeel expressed support for the show, noting that when the MDP government organised such shows aimed at the youth, the current minister for Islamic affairs along with the Adhaalath Party also protested.

Stressing that the MDP supports entertainment avenues for the youth, Azmeel pointed out that the party has had no official contact or involvement with the government regarding the Akon show, despite the suggestion in Adeeb’s tweet.

In a press conference held yesterday (January 5), Azmeel did express some concern over the government’s decision to host another international star without the conclusion of the investigation into threats made against Sean Paul, who had been scheduled to perform at the Tourist Arrival Countdown show.

Sean Paul backed out of the show at the eleventh hour, with Adeeb telling Minivan News on December 30 that the decision had been prompted by pressure in the artist’s home country, Jamaica. Adeeb was not responding to calls at the time of publication today.

Adeeb told media this week that he hoped the appearance of international artists in Malé would rid the capital of the reputation it had gained as “a lair that harbours members of the Islamic State or extremist militants”.

The President’s Office has denounced the online threat as a hoax intended to create an atmosphere of fear in the capital.

During the ‘Tourist Arrival Countdown Show’ on December 31, which eventually featured a host of Indian artists, it was announced that the American R&B star Akon would be performing in Malé on January 8.

In 2010, a show featuring Akon was organised – and tickets sold – before organisers cancelled citing a lack of technical support and security. As with the Sean Paul concert, both the Islamic ministry and local religious NGO Jamiyyathul Salaf had spoken out against the show.

Adhaalath Party President Sheikh Imran Abdulla has stated on Vnews this week that the party will not differentiate between governments with regards to “anti-islamic activities”, saying that the party is working non-stop to block the Akon show.

“Akon performing in Maldives is something we condemn in the harshest terms. We do not support the show,” Imran stated.

The party was reported last weekend to have expressed concern at what it sees as “horrifying acts that defy Islamic teachings and social convention” taking place in the country.

Local media have reported that Bollywood actress Priyanka Chopra is also scheduled to perform on Thursday, although the event’s organisers have not officially confirmed her appearance.

Meanwhile Jamiyyathul Salaf have said that social media announcements about a religious sermon scheduled for the same evening at the Artificial beach are a hoax designed to deter the masses from the activities of religious scholars and sheikhs, reported Haveeru.

Minivan News was unable to obtain comment from Jamiyyathul Salaf President Sheikh Abdulla bin Mohamed Ibrahim.


Related to this story

Adhaalath Party concerned that concerts are defying Islamic teachings

Tourism promotion concerts will show the world the true Malé: Adeeb

President Yameen warns of adverse impacts on tourism from threats against guests

Likes(0)Dislikes(0)

1.4 million figure for 2014 tourist arrivals incorrect, says Tourism Minister

Tourism Minister Ahmed Adeeb has said that the 1,450,637 figure quoted as the total tourist arrivals for the year 2014 has been misinterpreted.

Speaking to Minivan news, Adeeb explained that the figure revealed at the conclusion of the ‘Tourist Arrival Countdown Show’ on New Year’s Eve was actually the projected arrivals for the new year.

“There was a little confusion regarding the figure, maybe it is because of the way we presented it. The 1.4 million is projected arrivals for 2015, while 2014 arrivals is more than 1.2 million,” said Adeeb.

Statistics made available through the tourism ministry’s website reveal that the total tourist arrivals at the end of November 2014 stood at 1,101,113 – just under the total figure for 2013 – with 89,778 tourists visiting in November alone.

A ministry press statement released today said that 1,204,857 tourists arrived in the Maldives during 2014, adding that Adeeb had started the tourist countdown for 2015 during the show with the aim of reaching 1.4 million.

The ‘Tourist Arrival Countdown Show’ was itself mired in controversy after Jamaican dancehall star Sean Paul cancelled his appearance following an online video threatening to kill him if he were to perform at the show.

However, the show went ahead with Indian music duo Salman and Sulaiman Merchant headlining the event before the tourist arrival countdown figure was revealed shortly after an 8 minute firework display at midnight.

It was also revealed that American R&B star Akon would be performing in Malé on January 8 – also on Adeeb’s invitation – to promote Maldives tourism.

Opposition Maldivian Democratic Party (MDP) spokesperson Hamid Abdul Gafoor suggested the misinterpreted arrival figures were aimed to deceive, warning that such things could have a “negative impact of public and investor confidence in”.

“These figures were obviously not misinterpreted. They were presented in manner through which everyone was made to believe that this was the arrivals for 2014,” said Hamid.

Speaking to Minivan News about the tourism industry in 2014, Tourism Employee’s Association of Maldives (TEAM) Secretary General Mauroof Zakir said that even though total arrivals increased, the tourism industry suffered as a whole in 2014.

“Total tourist arrivals have increased compared to the previous year. However, as arrivals from Europe and Russia decrease, less income is generated as the replacing Chinese visitors spend less and stay for lesser periods,” said Zakir.

Speaking in a press conference last month, Adeeb noted that the weakening Russian ruble has effected occupancy rates, while Haveeru reported industry insiders of saying that the Russian market could drop by 10 percent.

According to the Maldives Monetary Authority’s (MMA) last quarterly economic bulletin , the number of Chinese tourists – representing the single largest market share with 27 percent – declined by 4.9 percent.

Expressing his opinion on the Chinese market, Hamid said that Chinese Tourists see the Maldives as a “trending and fashionable” destination, suggesting the market’s growth may not last.


Related to this story

Tourist arrivals reach half a million in 2014

Sean Paul cancels New Year’s appearance, citing security concerns

Expansion of economic activity in third quarter driven by tourism sector: MMA

President Yameen warns of adverse impacts on tourism from threats against guests

Likes(0)Dislikes(0)

Maafushi guest house feud caught on camera

Additional reporting by Daniel Bosley

Staff members from Maafushi’s Summer Villa guest house were caught on camera yesterday entering a rival establishment and assaulting a member of staff.

The owners of Summer Villa guest house were seen to barge into Kaani Village guest house after a disagreement regarding a picnic island to which the former establishment owns the booking rights.

Summer Villa’s Sales and Marketing Manager Mohamed Nabeeh told Minivan News that the incident caught on camera at Kaani Village followed an assault on him which was edited from the leaked footage.

Nabeeh said that he was the man who appears without a shirt in the video, explaining that it had been torn during the attack on him.

The CCTV footage shows a group of four men forcing themselves into the Kaani Village lobby and dragging out a man behind the reception.

Police have confirmed that an investigation into the matter is underway.

Attempting to explain the feud, Nabeeh said that the picnic island was fully booked but that Kaani Village threatened them saying that “they would not let us do our business” unless permission was granted.

“With in a few minutes Kaani Village management was at Summer Villa already smashing the belongings threatening and being violent and creating a commotion in front of all our guests,” alleged Nabeeh.

An anonymous source was quoted in local news outlet CNM as saying that Kaani Village was given the permission to take their guests to the island before later being revoked by Summer Villa, sparking the disagreement.

Minivan News was unable to obtain a response from numbers publicly listed for Kaani Village.

Nabeeh also stated that despite the commotion, he went to Kaani Village on their staff’s request to resolve the issue at which point he was assaulted and “badly injured”.

While expressing disappointment over the fact that Summer Villa does not have video evidence to show Kaani Village management attacking the guest house, Nabeeh stated “we couldn’t control from our side, because they got me injured badly for no reason first”.

Nabeeh provided Minivan News with photos that allegedly show the harm and damage caused by the Kaani Village management to their staff and property.

Maafushi, in Kaafu Atoll, has become synonymous with the country’s burgeoning guest house tourism industry, with the island hosting the highest number of guest houses outside of Malé City.


Related to this story

Guest House Association established by Maafushi businessmen

Likes(0)Dislikes(0)