Tag: Tourism

Maldives reaches one million tourists target for 2013

The Maldives has reached one million tourist arrivals for the current year, with the Tourism Ministry announcing that 1,000,203 had visited the country as of Monday (November 25).

The Maldivian government had narrowly failed to reach this milestone target in 2012, after a year of political turmoil and an economic slump in key markets.

“It’s a major victory for the whole country,” recently re-appointed Tourism Minister Ahmed Adheeb was quoted as telling media yesterday.

“This victory has been made possible amidst boycott campaigns and other such obstacles. Resort owners, ministry employees and MMPRC have worked really hard for this.”

Repeated delays to the scheduled presidential elections recently brought threats of prolonged strike actions from leading tourism industry groups, including the Tourism Employees Association of Maldives (TEAM).

In late October the People’s Majlis accepted a bill that would criminalise any actions calling for a tourism boycott, supporting or endorsing a boycott, participating in a boycott, or any act that would incite fear amongst tourists.

Previously this month, the Finance Ministry revealed that “political turmoil” had caused growth in the tourism industry to stall in 2012, though it did anticipate that the sector – responsible for around 28 percent of GDP in each of the past five years – would return to growth this year.

The Tourism Ministry revealed yesterday that the “Maldives received 925,413 tourists at the end of October 2013 and 783,999 tourists at the end of October 2012, which is an increase of 18% compared to the same period of last year.”

“A total 284,926 Chinese tourists visited the Maldives which is 30.8% of the total arrivals to the Maldives and is the highest arrival from a single source market,” continued the ministry’s press release.

The large numbers of Chinese arrivals to the country’s idyllic resorts, the Finance Ministry has suggested previously, was increasing arrivals whilst reducing the relative value of the industry.

“As the most number of tourists to the country now come from China, we note that the low number of nights on average that a Chinese tourist spends in the Maldives has an adverse effect on the tourism sector’s GDP,” read the Finance Ministry’s ‘Fiscal and Economic Outlook: 2012 to 2016’ statement this month.

Recent tourism statistics show that, whilst there was a slight growth in European arrivals this year, the overall share of the market is now dominated by Asia.

Prominent resort owner and leader of the government-aligned Maldivian Development Alliance Ahmed ‘Sun Travel’ Shiyam has blamed the relative decline in the European market on the state’s failure to properly market the destination.

The official hashtag of London’s World Travel Market was hijacked by Maldivian pro-democracy activists this month, making global headlines by linking prominent resort owners with the overthrow of former President Mohamed Nasheed.

A similar tactic was used by anti-government protesters in 2012 as the government re-launched the ‘Sunny side of life’ slogan that had been temporarily replaced under Nasheed’s tenure.

In order to celebrate the one million tourist milestone, the Ministry of Tourism together with Maldives Marketing & PR Corporation and the Airport Reps Association of Maldives will be holding a week of celebrations at Ibrahim Nasir International Airport between December 25 to December 31.

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Majlis accepts bill to criminalise tourism boycotts

With additional reporting by Daniel Bosley

The People’s Majlis has today accepted a bill prohibiting tourism boycotts, with 30 members voting for, 30 members voting against, and Maldivian Democratic Party (MDP) MP Abdulla Shahid casting the deciding vote as speaker of the house.

The tourism boycott bill would criminalize calls for a boycott, as well as the supporting or endorsing of a boycott, participating in a tourism boycott, or any act that would incite fear amongst tourists.

Amendments to the penal code were also introduced in the Majlis today, with MDP MP Imthiyaz Fahmy submitting amendments to a number of articles, including article 81 – under which MDP presidential candidate Mohamed Nasheed is currently being charged.

The boycott bill – submitted by the Progressive Party of the Maldives (PPM) MP Ali Arif – has now been sent to the Majlis Economic Committee.

Depending on the level of participation in the boycott, those found guilty could be fined MVR150,000 (US$9740), have their trade permits cancelled, or have any honors or privileges awarded by the state revoked.

Discussions of a tourism boycott have always been particularly sensitive in the Maldives, with the country reliant on the industry which contributes over 70 percent of the country’s GDP.

Government ministers have in the past described the industry as “sacred”.

A selective tourism boycott labelled the ‘Maldives Travel Advisory’ appeared in the months following the contested transfer of power in February 2012, although the website was soon taken down.

Similarly, Nasheed himself told the Financial Times in July last year that tourists planning to visit the Maldives should cancel their holidays.

This call was not repeated, however, with the party’s National Council never agreeing to adopt such a policy.

Removals from existing code

In addition to removing Penal Code’s Article 81, Imthiyaz Fahmy proposed removing Articles 75 and 87.

Article 81 of the penal code regards public servant using authority to arrest or detain innocent persons.

“It shall be an offense for any public servant by reason of the authority of office he is in to detain or arrest in a manner contrary to law. Person guilty of this offense shall be subjected to exile or imprisonment not exceeding 3 years or a fine not exceeding MRF 2,000,” reads the article.

Former President Nasheed is currently being charged under Article 81 for the arrest of Criminal Court Chief Judge Abdulla Mohamed – an incident that precipitated Nasheed’s ouster in February 2012.

The arrest followed the failure of parliament and the Judicial Services Commission to taken action over an extensive list of allegations against Mohamed.

The Nasheed trial subsequently stalled at the high court level after the legitimacy of the Hulhumale’ Magistrate Court – specially assembled for the case – was disputed.

The composition of the court and the conduct of the trial was also criticised by UN Special Rapporteur Gabriella Knaul as “arbitary” and of questionable legality.

The Progressive Party of Maldives called for the trial to be resumed earlier this month, though not further action has yet been taken in the courts.

Penal code article 75 concerns the making of false charges: “Whoever institutes a claim against another person with the intent to cause inconvenience, loss or injury to that person without lawful grounds shall be subjected to a fine not exceeding MRF 2000.”

Section 87 of the code relates to the failure to assist public servant in his duties, with offenders subject to exile, six months imprisonment, or a MVR500 fine.

The amendments come at a time when several MDP MPs, including Fahmy, are being investigated for contempt of court and for criticising the judiciary.

The current penal code was written in 1968. Work on a new penal code started in 2008, but it is still at committee stage.

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Introducing rival seaplane operators vital for tourism: MATATO

The Maldives Association for Travel Agents and Tour Operators (MATATO) feels it is imperative that competition be introduced to the country’s seaplane industry to assuage fears that the resulting monopoly has negatively hit tourism.

MATATO President Mohamed Khaleel has alleged that the sale of both Trans Maldivian Airways (TMA) and Maldivian Air Taxi (MAT) to US-based private equity fund Blackstone in February of this year has already led to increased prices for guests and tour operators.

“We need to find a competitor to [Blackstone],” said Khaleel.

The merged company now operates under the TMA brand.

Several major hospitality groups operating in the country wrote to the Maldives Association of Tourism Industry (MATI) in August claiming their “worst fears” were being realised regarding the monopoly on the country’s seaplane services.

“You are of course aware that ‘The Blackstone Group’s’ recent entry into the market has had the effect of eliminating competition and creating a monopoly in the charter seaplane market in the Maldives,” wrote the CEO of a major multinational operating in the Maldives.

“We were concerned from the outset about the potential disruptions this could cause in the market and have been monitoring the situation closely.”

In the letter, the company said it was particularly concerned at several contractual points it alleged were being “forced” upon operators by TMA as a result of the seaplane monopoly.

At time of press, Minivan News was awaiting a response from both Tourism Minister Ahmed Adheeb and TMA  to the allegations raised in the letter.

MATATO concerns

Aside from the impact of the increased costs being passed on to travel agents and consumers, MATATO President Khaleel alleged operators had not been receiving the same levels of support from the seaplane operator under Blackstone in order to promote the industry.

“For instance, we try to run [familiarisation] trips for journalists as part of promotion efforts for the country as a destination, every year in the past we used to get complimentary seaplane services [for promotional purposes],” he stated.

Pointing to key developments in the Maldives business sector in recent years, Khaleel said that introducing competition to the country’s communications and telecoms sector had helped lead to positive changes in price and services since the introduction of private competitors.

He expressed confidence that there was sufficient finance and know-how within the local aviation industry to try and establish a new seaplane operator locally.

Khaleel stressed that although the emergence of a growing number of domestic airports across the country was providing alternative transport options to using seaplanes, the best solution would be to encourage competitive pricing in the market by encouraging competing operators.

“There are multiple people around who can afford this to try and establish fair competition,” he added.

Blackstone “treated us well”: guesthouse operator

Meanwhile, one small hospitality group providing guesthouse accommodation in Noonu Atoll, which has recently renewed an agreement for seaplane services, confirmed it had faced successive rise in costs for the use of seaplane services over the last 12 months for a one way journey from the capital.

A one way seaplane flight to Noonu Atoll per traveller earlier this year rose to US$300 from US$260. The cost per head recently rose again to US$375 under its latest agreement signed within the last month, the operator added.

According to the guesthouse manager, the increased rates had not drastically impacted upon its operations as the property had worked with a specialist European tour operator to bring in groups of travellers – the costs therefore being absorbed into a wider package rate.

Outside of costs, the operator stressed that transport – particularly for the country’s fledgling independent travel market – was a “big issue” for their guesthouse, with the prospect of being priced out of using seaplanes potentially creating long-term difficulties for business.

“We were hoping that they would not raise the seaplane rates too much, and they didn’t,” the guesthouse manager added. “We would have otherwise had to use a recently opened domestic airport nearby, but this would be such a hassle requiring hiring a speedboat for further transportation. [The seaplane] is easy, smooth and elegant for us.”

The operator stressed that, owing to the costs already associated with using seaplanes compared to other forms of transport, its guests usually only took a one-way flight to the property itself with alternative transport arranged by sea as part of the experience.

The guesthouse manager added that seaplanes also gave an additional exotic appeal to the country as a destination, describing one tour operator as being “astonished” after their maiden flight across the country’s skies using the services.

This appeal, the operator argued, was a major additional selling point of the current package offered to guests visiting the Maldives.

“A monopoly makes it much tougher to do business, so in the long-run, I would say it could be a bit scary for the industry,” the manager stated.

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Manta rays lacking libido in empty blue seas around the Maldives: The Guardian

” ‘Mantas!’ shouts Guy Stevens from the top deck, pointing to huge bat-shaped shadows gliding under the rippling, turquoise water of Hanifaru bay in the Maldives,” writes Damien Carrington for the UK’s Guardian newspaper.

“Mantas are protected in the Maldives and had been faring relatively well,compared with populations in Sri Lanka, Indonesia and elsewhere, where thousands of the inquisitive creatures are slaughtered each year to supply the Chinese traditional medicine market.

But Stevens is worried by a new threat. Usually about a third of the females are pregnant every year, he says: ‘But then – boom – in 2009 reproduction just stopped.’

‘Is this part of long-term natural cycles or is it something more sinister, related to climate change and human impacts?’ asks Stevens, founder and chief executive of the Manta Trust, which runs its Maldives programme from the Four Seasons resort on Landaa Giraavaru island, with the company funding the Trust’s staff and operations.

‘I suspect it is not natural,’ he says. ‘The meteorological people say the monsoon is changing [from usual patterns], and the fishermen who have been out there for 50 years say it is definitely changing.’

Stevens has been tracking the Maldive mantas for eight years and has 15,000 sightings of 1,500 individuals from the last four years alone. Their feeding events correlate closely with the average speed of the winds, which have been blowing less strongly overall in the past four years.

Weaker winds are less effective at stirring up the seas, meaning the nutrients needed for plankton to bloom are missing. “If primary production is affected, that passes up through the food chain and affects the mantas,” he says, adding that mantas bring in about $20m a year in tourism revenue for the Maldives.”

Read more

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Maldives foreign travel advisories updated after recent protests

The UK, Australia, Canada and China have updated their travel advisories on the Maldives, warning of intensifying political instability and encouraging their nationals to take care, especially in the capital city of Male’.

“Demonstrations have already started in the capital, Malé and on some non-resort islands. Further demonstrations are likely. Previous political demonstrations have led to violence and arrests. Friday afternoons are traditionally potential flashpoints,” stated the September 27 notice on the UK Foreign and Commonwealth Service’s travel advisory service.

The guidance urged visitors to keep away from demonstrations: “There is no indication at present that any political unrest will affect tourist resorts or airports, but if you have any concerns you should check with your hotel or tour operator,” the statement read.

The Australian alert on the government’s Smart Traveller website flagged Male’ yellow and urged travellers to “exercise a high degree of caution” in the capital due to “unresolved political tensions and risk of further unrest and violence.”

“Since February 2012, there have been regular political protests in Male, some of which have turned violent. The political environment remains uncertain and further violent clashes could occur. You should avoid public gatherings and protests, particularly in Male, as they may turn violent. Extra care should be taken when moving around Male’ after dark,” stated the advisory.

The Canadian alert urged travellers to “exercise a high degree of caution” due to civil unrest, stating that “the political situation is volatile following the indefinite postponement of the second round of presidential elections by the Supreme Court. Demonstrations by political parties are likely to occur.”

The Chinese advisory, updated on September 27, noted that while the Maldivian social order “is generally stable”, “partisan conflicts around the presidential elections are intensifying.”

The Chinese Embassy in the Maldives urged Chinese visitors – who make up 25 percent of all tourism arrivals – to monitor the local security situation, contact and confirm the hotel booking before departure, and avoid non-essential travel to Male’.

Friday’s protests were also extensively reported by Chinese state-run press agency, Xinhua.

The US Embassy in Colombo previously issued a travel notice to US citizens planning to travel to the Maldives, stating that the run-off presidential election previously scheduled for September 28 “has been postponed.”

“The U.S. Embassy recommends that US citizens exercise caution, avoid large crowds, and monitor media coverage of local events,” the advice read.

Tourism dependency

The vast majority of tourism to the country is through package tours and holidays, with guests arriving on the airport island of Hulhule and being taken by boat, seaplane or domestic air transfer directly to their resort islands without stepping foot on Male’.

The tourism industry’s traditional market has been the UK, Italy, Germany and Russia, however following the 2008 recession this market has been displaced with a surge in Chinese arrivals. Smaller but growing markets include the Middle East and Eastern Europe.

The Maldives is indirectly dependent on this luxury tourism industry for over 70 percent of its GDP and up to 90 percent of its foreign currency exchange. As small island nation with scarce natural resources and very little agriculture, the Maldives also has near-total reliance on imports, particularly for tourism commodities.

The Tourism Employment Association of the Maldives (TEAM) last week indicated that it would encourage its 5000 members to strike should the election be delayed, while the Maldives Port Workers Union (MPWU) went on strike today “to send a message to the government”.

While the political situation in Male on Sunday remained tense ahead of an expected but unscheduled Supreme Court verdict on the fate of the run-off election, protests over the past several days were confined to just several intersections in the capital.

Yesterday’s protest near Male’s main tourist street attracted small crowds of passing Chinese and German tourists who took photos of the rally. A group of four Germans, asked what they thought was happening, said “I don’t know, something to do with the flags?”

Tourism Minister Ahmed Adheeb told Minivan News yesterday that international media coverage of proposed strike action predicting “travel misery” for UK tourists travelling to resort was “irresponsible”, and challenged the veracity of reports such as that in the Independent’s travel section.

“The scuba dive tanks will stay empty, the pool towels unchanged, and there will be nobody on hand to mix a cocktail [should the protests go ahead],” wrote the paper’s Whitehall editor, Oliver Wright.

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Nasheed calls for tourism workers to strike should election be delayed

Former President and Maldivian Democratic Party (MDP) presidential candidate Mohamed Nasheed has called on tourism workers to strike, should run-off elections scheduled for September 28 be delayed.

Following Nasheed’s appeal, the Maldives Association for Tourism Industries (MATI) issued a statement warning of “irreparable consequences” to the Maldivian economy unless the election is expedited.

“It is absolutely important to expedite the election and settle the issue or else there would be irreparable consequences to the Maldives, and especially to tourism which is the back bone of the economy. Therefore, it is important for everyone to see the importance of this in the interest of the country at large,” said MATI Chairman M.U. Manik, one of pioneers of the country’s 40 year-old tourism industry.

The Supreme Court ordered the Elections Commission (EC) on Monday to indefinitely postpone run-off polls until it issues a verdict in an ongoing case filed by the Jumhooree Party, which placed third and is now seeking to annul the vote.

Nasheed emerged as the front runner in the first round of the polls with 45.45 percent (95,224 votes), followed by Progressive Party of Maldives (PPM) candidate Abdulla Yameen who received 25.35 percent (53,099 votes). JP candidate and resort tycoon Gasim Ibrahim narrowly missed out on the run-off with 24.07 percent (50,422), and contested the results at the Supreme Court alleging electoral fraud despite unanimous positive assessments of polls by local and international election observers.

“I call on tourist workers to strike if there is no election on Saturday. For everyone to strike. There is an election scheduled on Saturday – whether that election happens or not is in one sense in your hands and mine,” Nasheed told tourism workers, at an event on Monday evening to explain the party’s manifesto.

Secretary General of the Tourism Employees Association of the Maldives (TEAM), Mauroof Zakir, told Minivan News the organisation was holding discussions on whether to endorse Nasheed’s call.

“We are discussing whether TEAM as an organisation will back [Nasheed’s] call or leave it up to individual resort workers. We have to think about the consequences on employees’ jobs. Many resort workers are calling us and are saying they are willing to go on strike, but in such a way that resorts continue to operate,” Mauroof said.

The tourism industry is indirectly responsible for upwards of 70 percent of the Maldives’ GDP, and a substantial majority of Maldivian resort workers support the MDP.

Results from resort ballot boxes in the first round revealed overwhelming support for the party, even at many properties owned by Nasheed’s political opponents such as Vice President Waheed Deen’s Bandos Island Resort (51 percent MDP).

The trend was particularly notable at prominent international chains in the luxury tourism sector, famous for providing relaxing and idyllic escapes for honeymooners, including Sheraton Maldives Full Moon Resort and Spa (58 percent MDP), Dusit Thaani Maldives (73 percent MDP), Conrad Maldives Rangali Island Resort (62 percent MDP), and One and Only Reethi Rah (75 percent MDP).

Tourism Minister Ahmed Adheeb has meanwhile told local media he will not allow politicians to sacrifice the tourism industry and its workers, and appealed to staff not to strike.

“They plan and involve the tourism industry every time there is political turmoil, every time things do not happen as they want. They called for a tourism boycott in international media. There were effects from that. We are seeing the same thing now. We cannot allow any politician to involve the tourism industry in politics. We cannot allow politicians to sacrifice the tourism industry and its workers every time things are politically turbulent,” he told newspaper Haveeru.

The Supreme Court will be hearing closing arguments this evening.

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Maldives must address “deteriorated” tourist services to protect industry: Chamber of Commerce

The Maldives National Chamber of Commerce and Industry (MNCCI) has warned that the “deteriorated” and “outdated” amenities used to support the Maldives’ lucrative resort industry will negatively impact growth across the tourism sector, if left unaddressed.

MNCCI Vice President Ismail Asif told Minivan News that despite the “seven star” reputation of the country’s exclusive island resorts, the group was receiving growing complaints that the service, amenities and treatment afforded to guests by the country’s public and private sector threatened to significantly damage the destination’s reputation.

The comments were raised after several multinational hospitality groups alleged earlier this month that the sale of the Maldives’ two main seaplane operators to US-based private equity fund Blackstone in February was having a “significant” negative impact on the wider tourism industry as a result of the monopoly created.

MNCCI Vice President Asif told Minivan News that the chamber had not received any “particular concerns” related to the Blackstone deal, but had instead noted growing criticisms of standards of service from state and private institutions vital to the country’s resort industry.

“We have had e-mails from foreign investors and business people about the general service and standards at the country’s airport as well as the quality of transportation [available to tourists],” he said. “We are not able to distinguish [whether the complaints] are about seaplanes or speedboats.

Airport condition

Asif also identified the current condition of Ibarahim Nasir International Airport (INIA), a general lack of amenities, and the attitude of customs and immigration officials towards foreigners visiting the country as major concerns needing to be addressed by the wider industry.

Late last year, the present government controversially scrapped a US$511 million contract signed under the previous administration with India-based infrastructure group GMR to develop and manage an entirely new airport terminal.

The state is subsequently facing a US$1.4 billion compensation claim from GMR for its decision to terminate the contract over allegations of corruption, claims ultimately rejected by the country’s Anti-Corruption Commission (ACC).

The MNCCI has nonetheless maintained that the government’s decision to abruptly terminate the GMR contract did not hurt foreign investor confidence, with Asif claiming that the existing airport structure could be modified to improve service standards. With the eviction of GMR construction of the new terminal is stalled at 25 percent complete, according to the government’s own engineering assessment.

“Foreign businesses don’t want to get into politics here. In the meetings we have had there are two major concerns raised. Internationals want the Maldives to remain as it is. The feedback we get is they want the airport as it is, but with improved services,” he said. “This doesn’t mean a new five story building is needed. For instance free wifi is not [at the airport at present]. Certainly not at the standards visitors would expect.”

Criticisms had also been raised over the conduct of customs officials and regulations banning tourists from bringing alcohol into the country to consume on the country’s resorts, according to the MNCCI.  Asif claimed there was minimal information provided to visitors about restrictions on alcohol and pork products outside of resorts.

“Expensive wine is often confiscated from guests, who are not getting it back. I understand visitors must act within local laws, but it is also important to correctly inform them as well,” he said. “Often these are very expensive gifts given to people while they are travelling, and I don’t see why they cannot bring such items to their resort.”

“It’s not like tourists will bring large amounts of liquor with them. Often the value of the goods they are holding is high, but a customs person will have no idea of the goods or the culture. Their response is ‘liquor is prohibited here’,” he claimed, accusing police and other state authorities of favouring restrictive laws on tourists to reduce their own levels of responsibility.

Asif argued that all national bodies needed to take greater responsibility to ensure treatment of tourists matched the services being provided by the resort industry.

“If it is too much hassle for tourists to visit, people will not come here [on holiday] and will look to other destinations,” he said. “Tourism is is based around trying to make clients happy. We are concerned about this and the need to make things easier here.”

Stability concerns

The MNCCI has also stressed the need for political stability, the lack of which he had alleged has had a considerable impact on investor confidence and business development since the controversial transfer of power on February 7, 2012.

With a run-off vote scheduled for September 28 expected to decide whether former President Mohamed Nasheed or MP Abdulla Yameen will take office over the next five years, Asif said it was important to have an elected and head of state – no matter the candidate.

He argued that a Commonwealth-backed Commission of National Inquiry (CoNI) last year dismissed Nasheed’s allegations that he was removed from office in a “coup d’etat” had led to an increase of larger-scale investment – particularly with resorts.

However, with a number of properties remaining under construction, stability within the country’s domestic politics and court system was a huge problem needing to be addressed, he said.

Tourism Minister Ahmed Adheeb was not responding to calls at time of press in response to the MNCCI’s concerns.

Meanwhile, the government earlier this month said it hoped to secure longer-term financing to plug a shortfall in annual revenue that has seen the number of 28-day Treasury Bills (T-bills) sold by the state almost double in July 2013, compared to the same period last year.

Finance Minister Abdulla Jihad told Minivan News at the time that the state’s increased reliance on short-term T-bills between July 2012 and July 2013 reflected the current difficulties faced by the government in trying to raise budgeted revenue during the period.

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Comment: Maafushi a shining example of guest-house tourism

President Nasheed’s references to guesthouse tourism on the local inhabited island of Maafushi in the recent televised presidential candidates’ debate has drawn comment from many in the tourism industry (not to mention the opposition parties and the various political affiliates whose only job seems to criticise Nasheed at every available opportunity).

Those references by Nasheed were made for a very good reason. Because Maafushi is a shining example of how successfully guesthouse tourism has been implemented on an inhabited island, and  illustrates how every employable person, every man or woman seeking a job on the island, has the opportunity to seek gainful employment.

Not only that, all the service-provision on the island has thrived on the commercial viability and need of the visitors coming to the island’s shores.

Cafés, restaurants, and water-sports businesses are thriving, as is the home gardening of local vegetables and fruits which can be sold to readily available buyers. All of these of course are what the guest-house policy is designed to achieve.

Occupancy of guest houses on the island is impressive with an average occupancy rate of over 70 percent – further demonstrating that demand is steady enough to support this newly emerging segment of the Maldives tourism product. In short, Maafushi demonstrates that guest-house tourism can indeed be successfully replicated across all the atolls of the Maldives.

MDP’s guest-house policy, like all of its policies, has been designed after extensive research, public consultation and with assistance and guidance of experts from the economic sector. During our public policy consultation process, which took the form workshops and repeated visits to local islands over several months, local entrepreneurs and concerned citizens alike consistently expressed their desire for an MDP policy “to bring tourism to our atoll”.

Without a doubt tourism, as it should, has remained the cornerstone of MDP’s vision for regenerating growth in the economy. The guest-house policy especially is aimed to kick-start local economies and more importantly to utilise the natural resources endowed on our beautiful islands. The competitive advantage of the Maldives as a tourist destination is the unique formation of the small islands, ringed as atolls, surrounded by reefs and ensconcing a breathtaking undersea marine life.

MDP’s policy team has asked all the right questions. What exactly is the Maldives tourism product? What are its components? At what point of maturity in the destination’s image should new components be introduced? Can occupancy rates be met if we introduced a different segment of tourism? What will guest-house tourism do to the existing resort tourism and safari-boats and dive-tours? Will budget tourism dilute the ability to market the destination successfully as a romantic island getaway on which exclusivity to guests is guaranteed?

These questions have been thoroughly discussed and scenarios considered before the policy was included in the MDP’s manifesto. The policy debates have produced many encouraging answers.

I believe the Maldives tourism industry and indeed local entrepreneurs in the country have reached a point in maturity in which new initiatives could be boldly introduced. The concern of the resort industry is that the current cache of 5 to 7 star island resorts built exclusively on uninhabited islands is emblematic of the destination’s image, with the view that any form of tourism on inhabited islands will create confusion and sully that image.

Looking at destination maturity across many other countries in the world, the timing is appropriate now to showcase what the rest of the country is about. Is there a single destination in the world without a network of guest-houses, youth hostels and locally based homestay arrangements? The existence of these facilities do not detract from the image portrayed by the destination marketing organisations, in fact they are seen as a necessary addition complementing the primary tourism product.

I am convinced such will be the case for the Maldives too. Forty years of tourism has created a specific image of the islands in the marketplace. And that is all about the islands’ natural beauty – such unique beauty not found in any other part of the world.

The guiding post for this policy is the answer to the question: Why do tourists come to the Maldives? The answer: to experience the spectacular natural beauty of its isles. Being on a resort or an inhabited island does not deprive a visitor or indeed any tourist of accessing such beauty.

To walk on a pristine white beach, snorkel in the azure seas or experience the breathtaking underwater world is entirely possible whether tourist facilities are provided on an inhabited island, or exclusive purpose built resort island.

Dr Mariyam Zulfa was former President Nasheed’s Tourism Minister at the time of the overthrow of his administration on 7 February 2012.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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“Worst fears” over Blackstone seaplane buyout now a reality, warns hotel group

Several multinational hospitality groups have alleged that the decision to sell the Maldives’ two main seaplane operators to US-based private equity fund Blackstone is having a “significant” negative impact on industry profitability – potentially compromising local jobs.

Blackstone announced back in February this year that it had purchased a controlling stake in both the Maldives’ seaplane operators, Trans Maldivian Airways (TMA) and Maldivian Air Taxi (MAT) for an undisclosed sum. Since the merger, the company has been operating under the TMA brand.

Major resort groups – speaking on condition of anonymity – have alleged that a number of properties were losing money on a monthly basis as a result of being reliant on services provided by the now-consolidated national seaplane operator.

“Worst fears”

In a letter addressed to the Secretary General of the Maldives Association of Tourism Industry (MATI) – obtained this week by Minivan News – one of the largest multinational companies operating in the country expressed concern that “our worst fears about the [seaplane] monopoly situation are becoming a reality.”

“You are of course aware that The Blackstone Group’s recent entry into the market has had the effect of eliminating competition and creating a monopoly in the charter seaplane market in the Maldives,” wrote the multinational’s CEO in a letter dated August 5, 2013.

“We were concerned from the outset about the potential disruptions this could cause in the market and have been monitoring the situation closely.”

The CEO added that, with discussions ongoing over securing a seaplane charter contract for its resort properties in the country, the company was particularly concerned at several contractual points being “forced” onto the group by TMA.

According to the letter, these concerns include:

  • A significant increase in prices from previous seaplane contracts
  • A reduction in services and benefits being offered to hospitality groups
  • An exclusivity clause forbidding any deals between the company and other seaplane operators
  • A “contractual link” to use landplane operations it alleges are set to be launched by TMA
  • Minimum contract term of three years for seaplane operations

“As you can see, the terms being forced upon hotel owners are highly anti-competitive and will have a significant negative impact on the market. We are being forced to accept unfavourable terms and TMA is trying to lock itself into a monopoly position by insisting on long-term exclusive contracts,” the multinational hospitality group’s CEO continued in his letter to MATI.

“Ultimately, these costs will be passed on to tourists, which will make the Maldives an even more expensive tourist destination and ultimately deter tourists from visiting , this will cost Maldivian jobs and damage the industry and economy.”

“Sensitive issue”

A senior official for another major multinational hotel group using TMA’s services said it had been experiencing a number of problems in recent months related to transporting clients by seaplane – describing the matter as a “sensitive issue”.

As well as general concerns about service costs, which it said were now “quite high”, the resort source claimed they had also noted issues with TMA cancelling flights without providing prior notification to the resort or its passengers.

In some cases, the resort official alleged that the resort had been given no choice but to provide customers with free meals and even additional nights stay on their property as a result of what it said were last minute cancellations by TMA.

“Although we have had no complaints from guests themselves, this has become quite expensive for the resort,” added the resort official. “I speak with many other resorts and many have said they are losing money monthly by having to provide these transfers [by seaplane].”

The source also noted what they believed was a decline in service in recent months, personally finding travelling with TMA a comparatively “unpleasant experience”.

“Right now, there is no competition as it is only TMA offering services,” the source said.

Domestic alternatives

Meanwhile, the general manger of a resort based in the north of the country, which is currently in negotiations with TMA to renew its contract, also raised concerns over the recent services being provided to guests since the takeover by Blackstone.

“We are not the only resort I know of who believes the services are not as good. There are less flights and more island hopping,” the source claimed.

The manager said that with the recent inauguration of a domestic airport in the country, the resort’s own reliance on TMA was no longer as strong, though they added that many guests preferred the opportunity to travel the country by seaplane where possible.

Despite the preference of many tourists to fly by seaplane, the general manager said that tour operators were now opting to use domestic air travel for customers travelling to the resort as “standard”.

“We are expecting more clients to travel by domestic flights, although some would rather pay to upgrade and fly by seaplane,” added the general manager.

Minivan News was awaiting responses from TMA, Blackstone, MATI Seceretary General Ahmed Nazeer, and Tourism Minister Ahmed Adheeb at time of press.

Investment climate

Speaking this week during a live question and answer session ahead of the upcoming election on September 7, President Dr Mohamed Waheed took full credit for securing Blackstone’s purchase of the country’s seaplane operators.

He cited the deal as an indication of the health of foreign investment under his administration, amidst criticism over his government’s termination of two high-profile foreign investment contracts, including a US$511 million valued agreement with India-based GMR to develop and manage Ibrahim Nasir International Airport (INIA).

“It is ridiculous to claim we are not getting foreign investments now. They are very eagerly coming, even more now. One example of a great investor that I brought in recently is Blackstone,” President Waheed said during the televised event.

Attorney General Azima Shukoor last month accused the previous government of failing to conduct sufficient research before signing several major foreign investment projects that have since been terminated by the present administration.

Speaking at the time of the sale back in February, former Minister of Economic Development Mahmood Razee, also former Minister of Civil Aviation, noted that the purchase of a controlling stake in the only two seaplane operators by a single company had effectively monopolised the market.

“This is a very exclusive market, and critical to the tourism industry. Even though both MAT and TMA operate the same aircraft, they have not previously been willing to cooperate,” Razee said, explaining that the Maldives did not have anti-monopoly laws which may have otherwise obstructed the sale.

Previously, resort managers could approach both companies seeking the better price for seaplane services, upon which they were reliant for the vast majority of their guest arrivals: “Now there is no effective competition, as the major shareholder is one and the same,” Razee said at the time.

He acknowledged that “in an ideal world” prices could come down, as the two companies have been operating identical aircraft but duplicating maintenance and other services.

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