Increasing density of resort development threatens key tourism appeal, warns former tourism minister

The cabinet has decided to increase the development density of resort islands from 20 percent to 30 percent, in a move tourism authorities of the former government have claimed will impact a key appeal of the Maldives’ destination.

In a statement, cabinet said ministers noted that “opportunities for commercial expansion were limited due to unavailability of land area to develop tourist facilities on leased-out spaces.”

“Members also agreed that, raising the land area limit for construction of tourist facilities, to meet market demand, would largely contribute to the prosperity of the island,” the statement read.

Former tourism minister Dr Mariyam Zulfa said “one of the resort owners behind the [February 7] coup” had pressured her to change the density regulations.

“I privately consulted foreign [resort] investors and the advice I got was not to change this, because the Maldives’ ‘islandness’, a key product feature, would be lost,” she told Minivan News.

“Thirty percent is a huge amount of land to developed as a built up area, and islandness is what makes the Maldives competitive,” she said.

Mohamed Nasheed’s government had debated and provisionally approved increasing the development density to 25 percent, Dr Zulfa said, “but that was before the industry feedback that this was not something to play around with.”

“I can categorically say this is something [resort tycoon and Jumhoree Party (JP) leader] Mr Gasim Ibrahim wanted for a long time. If you do an eyeball inspection of his properties already they more than 20 percent,” Dr Zulfa alleged. “I knew this would happen the moment the regime changed. It doesn’t surprise me.”

Secretary General of the Maldives Association of Tourism Industry (MATI), ‘Sim’ Mohamed Ibrahim, said the density increase would “allow some resorts to develop more facilities, entertainment and staff amenities.”

“It will give resort developers more flexibility,” he said. “We don’t think it will have an impact [on the competitiveness of the destination].”

Dr Zulfa has previously contended that pressure from several government-allied resort owners had led the new government to declare that 25 year resort island lease extensions could be paid in installments rather than upfront, a decision she claimed took US$135 million out of the budget overnight.

In March, the Maldives Inland Revenue Authority (MIRA) said it had anticipated receiving a total of Rf375 million (US$24 million) for lease extensions, however due the government’s recent decision to accept resort island lease extension payments in installments, the  income received dropped to Rf23 million (US$1.5 million). The government has meanwhile said it has a budget deficit of US$155 million.

Tourism Minister Ahmed Adheeb was not responding to calls at time of press.