Tourism budget for 2013 increased by MVR 60 million

The tourism budget for 2013 has been increased from MVR 20 million (US$1.2 million) to MVR 80 million (US$5.1 million), local media has reported.

The budget increase follows criticism from the Maldives Association of Tourism Industry (MATI), which last month called for the government to reconsider the MVR 20 million budget allocated for tourism marketing in 2013.

The initial sum of money allocated was the lowest in eight years, according to a statement from MATI, which highlighted concerns that the Maldives’ economy was mostly reliant on tourism.

Tourism Minister Ahmed Adheeb told local media that the ministry had initially requested a budget of MVR 200 million (US$12.9 million) to carry out tourism promotion for the year, however parliament had “erased a zero” from the figure when finalising the budget.

Adheeb noted that while tourism promotion is expensive, the revenue generated from the industry “drives the entire engine”.

“When we put down MVR 200 million, the government authorities don’t actually realise the priority that this requires. Parliament erased a zero from the MVR 200 million we proposed, and gave us MVR 20 million,” he told Sun Online.

“Then we had to work in all other different ways, and now the Finance Minister has committed to give us MVR 60 million more.”

Adheeb claimed that government institutions did not realise the importance of promoting tourism.

In 2012, the ministry set a target of welcoming one million tourists into the country.  It was allocated a MVR 70 million (US$4.5 million) budget to conduct marketing activities to help achieve that goal.

Figures released last month revealed that the tourism ministry failed to reach the one million mark by roughly 42,000 arrivals.

Despite the political turmoil that enveloped the country at the beginning of 2012, the figures showed that there had been a 2.9 percent increase on the total number of arrivals in 2011.

Tourism promotion efforts last year included a US$250,000 (MVR 3.8 million) advertising deal to promote the tourism industry on the BBC and a £93,000 per month (US$150,000) contract with public relations group Ruder Finn in an attempt to improve the country’s image following political unrest in 2012.

Despite the increased expenditure, tourism growth slowed to just 0.7 percent in 2012, compared to 15.8 percent in 2010 and 9.1 percent in 2011.

The government’s forecast for economic growth in 2013 is 4.3 percent.

Adheeb told local media yesterday that the government had “re-set” its sights on reaching the one million arrival target in 2013, and said there were plans to participate in a number of fairs and promotions  to attract more publicity.

“If we can fully establish the Maldives brand, we can promote Maldives and subsequently increase room rates. Every single dollar we spend on marketing will give a large amount of money in return,” he said.