China leads Maldives’ 18 percent tourism boom

Over 700,000 tourists visited the Maldives in the first seven months of 2011, the majority of visitors from China.

The Tourism Ministry has released data showing that the number of tourists who visited the Maldives between January and July 2011 increased by 18.3 percent to 520,483. This was compared to the 439,864 tourists who visited the Maldives during the same period last year.

Maldives Association of Travel Agents and Tour Operators (MATATO) Secretary General, Mohamed Maleeh Jamal, told Minivan News that the timing of Europe’s economic decline matches that of the growing Chinese market. Asia’s high season corresponds with Europe’s low season, he said, and resorts are now catering more to Chinese tourists to keep business up.

Jamal also noted that airlines such as Qatar Airways had increased direct service to the Maldives in the last 10 months. He also noted that more airports are being constructed closer to resort islands, such as in Baa Atoll.

“The President has also decided to increase the marketing budget from US$1.5 million to US$7 million, since we expect the industry’s growth to continue,” said the MATATO secretary general.

Statistics show that Chinese tourists dominated the market in the first seven months with 103,734 individuals, accounting for 19.9 percent of the total arrivals. The United Kingdom was the second-largest contributor to tourism arrivals, composing 11.7 percent of the market.

Jamal forecasted “phenomenal growth” in the Chinese market, and estimated that the Chinese would account for 40 percent of the total tourists in coming years.

The Maldives currently hosts over 100 resorts boasting a total of 22,000 beds. Jamal said 3-4 more resorts were currently under construction, and noted that it was important “to always have excess demand and limited rooms to keep the appeal of the Maldives up.”

Secretary General of the Maldives Association of the Tourism Industry (MATI), Ibrahim Mohamed Sim, was more guarded on the issue. Sim told Minivan News that “we are holding steady in growth, but the market looks mixed since the decline of the US economy could affect our traditional European markets.”

Italy and the UK, formerly leading contributors to the Maldivian tourism industry, have declined, said Sim, but Germany was holding steady.

Sim said the demand from China was significant, and that the Maldives “is in a very lucky position to have the chance to meet that demand.”

Sources in the Chinese media and Mandarin-language tourism forums have meanwhile noted the rise of practices such as segregation of Chinese visitors from other guests at meal times.

Sim commented that although he did not believe there was segregation, the Chinese “stand out, they come here for a different reason than most tourists. They do not come here to sun tan, they come here to see a different place.” He noted that some resorts were also designed to specifically appeal to different groups.

Another recent event in the Maldives’ tourism industry was its withdrawal from the New7Wonders competition.

Jamal told Minivan News, “we think it was a loss that the Maldives pulled out. New7Wonders was a marketing tool, and major tourism companies were competing for the award.”

However he said he did not think that the Maldives’ decision had affected the tourism industry.


Tourism Ministry condemns “misleading statements” from MATI over economic reform

The Tourism Ministry has condemned the Maldives Association of Tourism Industry (MATI) for “making statements to media outlets in a way that misleads the public about the government’s economic agenda”.

In a statement, the Ministry claimed that “MATI’s misleading statements in various media recently about the tax bills of the government’s economic reform agenda imply that the government’s efforts were undertaken without consulting officials from the tourism industry.”

The Ministry said it had “consulted a number of parties active in the tourism sector and sought advice for shaping the tax bills so that it would not be a disproportionate burden on the industry.”

“After these consultations, the Ministry is assured that businesses in the tourism industry support the reform agenda. Likewise, those in the front ranks of the tourism industry as well as MATI support it. Therefore, [the ministry] regrets an organisation like MATI making statements that are contrary to the advice and suggestions of senior industry leaders.”

Secretary General of MATI ‘Sim’ Mohamed Ibrabim was not responding at time of press.

The government has presented a raft of economic reform bills to parliament detailing several new taxes, including a business profit tax, general GST and income tax of those earning over Rf 30,000 (US$2000) a month. The government is also looking to increase its previously-passed tourism goods and services tax (TGST) of 3.5 percent to 6 percent, in exchange for lowering import duties, claiming that this will benefit businesses by allowing them to pay tax at the point of sale.

Secretary General of the Maldives Association of Travel Agents and Tour Operators (MATATO), Mohamed Maleeh Jamal, told Minivan News that his organisation had been consulted by the Maldives Inland Revenue Authority (MIRA) prior to the passage of the TGST, and was pleased to see some clauses implemented reflecting the input.

While no government body had sought to meet MATATO regarding the latest batch of bills, Jamal said parliament had forwarded them to MATATO for comment and input.

The Maldives pledged to the International Monetary Fund (IMF) earlier this year that it would pursue a package of policy reforms in exchange for a a three year economic programme to stabilise and strengthen the Maldives’ economy.

Under the new IMF program the Maldives has committed to:

  • Raise import duties on pork, tobacco, alcohol and plastic products by August 2011 (requires Majlis approval);
  • Introduce a general goods and services tax (GST) of 5 percent applicable to all sectors other than tourism, electricity, health and water (requires Majlis approval);
  • Raise the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013 (requires Majlis approval);
  • Pass an income tax bill in the Majlis by no later than January 2012;
  • Ensure existing bed tax of US$8 dollars a night remains until end of 2013;
  • Reduce import duties on certain products from January 2011;
  • Freeze public sector wages and allowances until end of 2012;
  • Lower capital spending by 5 percent