European decline could stall tourism in 2013: MATI

As the economies of America and the European Union (EU) become more vulnerable in the coming years, the Maldives tourism industry will see a decline in business, the Maldives Association of Tourism Industry (MATI) has predicted.

Maldives Association of Tourism Industry (MATI) yesterday claimed that decline in European traffic to the Maldives was due to economic stability in that region.

MATI Secretary General ‘Sim’ Ibrahim Mohamed pointed out that total tourist arrivals has not declined; in 2011, the Maldives set a new record of nearly one million.

“Occupancy rates in resorts have gone up following the arrival of Chinese tourists,” Sim told local media. “But the number of tourists arriving from Europe and other western countries has declined and we are threatened by the economic instability that Europe is experiencing.”

Maldives Inland Revenue Authority (MIRA) has lately released data indicating that tourism comprised a majority of state revenue in 2011. The State Budget for 2012 was created on this assumption, and leans heavily on expected revenue from tourism in the coming year.

Although the tourism industry has recovered impressively from devastating Boxing Day tsunami of 2004, Sim predicted progress would stall mid-2013 due to “global economic changes as economies of countries like America and the European Union become more unstable and vulnerable.”

However, the Maldives promises to remain atop its niche market of small island tourism. While Mauritius and the Seychelles are leading competitors, Sim affirmed that within the small island niche “we are unbeatable, and I believe it will stay that way.”

According to Simon Hawkins of the Maldives Marketing and PR Corporation (MMPRC), close correlation between a tourism industry’s marketing and arrivals is a strong indicator of success.

In 2011, Hawkins said, the Maldives destination board spent US$2 million on marketing and received close to one million tourists.

Comparatively, Mauritius spent US$13 million and received one million tourists.

“We’re six-and-a-half times more cost effective than Mauritius, and 30 times more cost effective than Indonesia,” said Hawkins. “We are batting very much above our weight, but that’s because the product is brilliant.”

Sim added that the Maldives product did not need to be reinvented during the European recession to suit the growing Asian market.

“Chinese tourists are like any Western tourist,” he explained. “When the Russians began coming to the Maldives they had some different expectations, but now they are used to what we offer. The Chinese will be the same.”

In 2011, Chinese tourists comprised a majority of total arrivals. However Minivan understands from conversations with resorts managers that while they come in high numbers they are not generally high spenders – while resorts make a bulk of their revenue from the bars, restaurants and spas, officials have noted that Chinese tourists’ primary expenditures are on board and transportation.

Minivan News inquired whether the 2013 presidential election would impact tourism.

“Political parties have matured, and the people have matured. They are accepting democracy,” Sim said. “2013 will be much better than when we started our multi-party system in 2008.

“Democracy is not a beauty pageant, it has ups and downs and hustle and bustle, and I think people understand that,” he observed.


State revenue increased 89 percent in 2011

The Maldivian State received Rf4.5 billion (US$290 million) in revenue last year through the Maldives Inland Revenue Authority (MIRA).

Revenue in 2011 increased by 89 percent compared to 2010’s revenue of Rf2.4 billion (US$155 million).

According to MIRA statistics, most revenue was received from the tourism industry.

Within the industry, resorts pay Rf752 million (US$48 million) as tourism tax, Rf666 million (US$43 million) as Tourism Goods and Services tax (T-GST) and Rf511 million (US$33 million) to extend a resort lease, Haveeru reports.

Airport Service Charge (ASC) raked in the second-highest revnue at Rf337 million (US$21 million).