Government revenue declines in May

Government revenue declined by MVR19.2 million (US$1.2 million) in May compared to the same period last year and reached MVR1.2 billion (US$77.8 million), the central bank has revealed in its monthly economic review.

Total expenditure during the month meanwhile rose by MVR104.9 million (US$6.8 million) and amounted to MVR1.5 billion (US$97 million).

“The decline in total revenue during May 2015 was mainly due to the decline in both tax and non-tax revenue which fell by MVR9.5 million and MVR1.7 million, respectively,” the review stated.

“The fall in tax revenue was mainly contributed by the decline in revenue from business profit tax and tourism tax, while non-tax revenues declined owing to a significant fall in revenue from resort lease rent. Meanwhile, the increase in expenditure was largely due to a growth in recurrent expenditure.”

In May, the government obtained US$20 million from Saudi Arabia for budget support. Finance minister Abdulla Jihad told Minivan News at the time that the funds were to be used to “manage cash flow” as revenue was lower than expected.

A large portion of forecast revenue is expected later in the year, he said, adding that shortfalls are currently plugged through sale of treasury bills (T-bills).

According to the Maldives Monetary Authority (MMA), the total outstanding stock of government securities, including T-bills and treasury bonds (T-bonds), reached MVR18.4 billion (US$1.1 billion) at the end of May, representing an annual increase of 36 percent.

The forecast for government income in this year’s record MVR24.3 billion (US$1.5 billion) budget is MVR21.5 billion (US$1.3 billion).

The projected revenue includes MVR3.4 billion (US$220 million) anticipated from new revenue raising measures, including revisions of import duty rates, the introduction of a “green tax”, acquisition fees from investments in special economic zones (SEZs), and leasing 10 islands for resort development.

The MMA’s monthly economic review meanwhile revealed that gross international reserves increased by 65 percent in May compared to the corresponding period in 2014 and stood at US$703.7 million, “of which usable reserves amounted to US$229.7 million.”

“During the review month usable reserves also registered increases in both monthly and annual terms by 12 percent and 41 percent, respectively. As for gross reserves in terms of months of imports, it rose both in monthly and annual terms and stood at 4.2 months at the end of May 2015.

Tourism and fisheries

The economic review noted that tourist arrivals declined by three percent in April compared to the same period in 2014, reaching a total of 102,242 guests.

“The annual decline in arrivals was contributed by the significant decline in tourist arrivals from Europe,” the MMA observed.

“In April 2015, total bednights registered a decline of 7 percent in annual terms, as the average duration of stay declined from 6.2 to 5.9 days. Partly reflecting the decrease in bednights, the occupancy rate of the industry declined to 73 percent in April 2015 from 80 percent in April 2014.”

In its quarterly economic bulletin, the central bank noted that despite a three percent growth in tourist arrivals in the first quarter of 2014, tourist bednights declined by three percent “owing to the fall in average stay of tourists from 6.3 days in Q1-2014 to 6.0 in the review quarter.”

Tourism receipts also decreased by four percent in the first quarter compared to the corresponding period in 2014.

“On the supply side, the operational capacity of the tourism industry increased by 3% when compared with Q1-2014 to reach an average of 27,827 beds. Reflecting this and the decline in tourist bednights, the occupancy rate of the industry fell to 79 percent in Q1- 2015 from 84 percent in Q1-2014,” the bulletin stated.

The volume of fish purchases meanwhile decreased to 6,134.6 metric tonnes in April, registering an annual decline of 11 percent.

“In May 2015, both the volume and earnings on fish exports declined in annual terms by 35 percent and 12 percent, respectively. This was mainly owing to the decrease in the volume and earnings of frozen skipjack and yellowfin tuna exports,” the economic review revealed.

In other sectors, the MMA noted that construction activity “continued to expand and remained robust as indicated by the annual increase in construction-related imports and increased bank credit to the sector during Q1-2015.”

“Activity in the wholesale and retail trade also grew, as indicated by increased imports by the private sector (excluding tourism) and bank credit to the sector.”

The rate of inflation in Malé meanwhile accelerated to 1.7 percent in April from 1.1 percent in March.

“The pick-up in inflation during the month was mostly contributed by the growth in fish prices and prices charged for housing rent,” the central ban explained.

“The monthly percentage change in the [Consumer Price Index] increased in April 2015. This was mainly due to the rise in fish and cigarett e prices. Cigarette prices rose during the month due to the increase in the import duty levied in April 2015.”


‘Visit Maldives Year 2016’ campaign seeks record tourist arrivals

President Abdulla Yameen has launched the Visit Maldives Year 2016 campaign in a bid to increase tourist arrivals to the Maldives to 1.5million in 2016.

The campaign, organized by the Maldives Marketing and Public Relations Corporation (MMPRC), will run until the end of June 2016.

The government plans to hold an underwater festival, an international surfing event, a tree-planting programme and photography exhibitions in the Maldives and global locations as part of the campaign.

The Maldives will also host the renowned tourism fair, ITB Berlin, in March 2016, as part of the Vist Maldives Year campaign.

“I am confident that through this global campaign we can look forward to welcoming record numbers of holidaymakers to our beautiful shores in the Maldives,” President Yameen said.

The president launched the campaign’s logo and website at an ongoing UN World Tourism Organization (UNWTO) conference at the Bandos Island Resort yesterday.

He highlighted the importance of tourism in job creation, raising standards of living and growth of the construction, agriculture and handicrafts industries.

“There is no doubt the tourism sector’s contribution to the creation of jobs is unparalleled with any other sector. In fact, the benefits of tourism as a catalyst for job creation go a long way from a mere creation of employment in hotels, resorts and restaurants. Many ancillary businesses throughout the economy gain from tourism, including the retail sector, entertainment arena and transportation industry.”

The government has earmarked three locations for community based tourism development, the president said.

The guesthouse island project aims to involve small and medium businesses in the lucrative tourism industry without encroaching on inhabited islands.

The project, launched in June 2014, envisioned the development of a 21,00 bed resort in Laamu Atoll Thumburi. The MMPRC changed the project to Baresdhoo in the same atoll last month.

He also pledged to provide sovereign guarantees for resort development loans with an interest rate less than four percent.

The policy is aimed at kick starting stalled development on some 60 islands leased for tourism, the government has previously said. The government has also cut import duty on construction materials for the resort development.

Speaking to the press yesterday, tourism minister Ahmed Adeeb said tourism growth is expected to slow this year due to a decline in Russian arrivals. However, he said the Maldives is on track to achieve the goal of 1.4million arrivals this year.

The Maldives marked the arrival of one million tourists in 2013.

In March, travel and tourism publication TTG Asia reported that Maldivian resorts were offering up to a 30 percent discount in prices to attract more arrivals.

Tour operators have also complained over ad-hoc increases in tourism sector taxes, including a hike in TGST from eight to 12 percent in November 2014 and a new green tax of US$6 per tourist in November 2014.

Airport service tax was also raised from US$18 to US$25 in July 2014 for visitors leaving the country.

Adeeb said there was room for more growth in the tourism sector, and said the parliament’s decision to increase resort lease periods to 99 years as an important step.

The UNWTO secretary general, Taleb Rifai, noted the growth in Chinese arrivals to the Maldives and spoke of the need to cater to Eastern tourists and older tourists.

The tourism ministry last month leased Thaa Atoll Kalhufahalafushi to China Machinery Engineering Corporation (CMEC) to develop a Chinese-friendly resort in the Maldives.

The number of Chinese tourists visiting the Maldives tripled from about 100,000 in 2010 to more than 300,000 last year.

With a total of 363,626 arrivals in 2014, Chinese tourists accounted for nearly one-third of arrivals with a 30 percent market share, representing the single biggest source market for tourists to the Maldives.

The Indian minister for tourism Dr Mahesh Sharma, meanwhile, pledged to increase arrivals from India to the Maldives.

The ruling Progressive Party of the Maldives (PPM) manifesto pledges to establish 50 resorts in the Maldives in its five-year term and award resort shares to Maldivians working in the tourism sector.

Adeeb has previously said the government will introduce a model for resort workers to obtain shares in resorts by the end of the year.

The government has also pledged to develop uninhabited island, Ismehelaareha in southern Addu atoll, as a resort to improve the southern economy.

Adeeb has also said he plans to transfer the authority to permit guesthouses from the tourism ministry to local councils


World Bank reiterates concern over unsustainable spending

The Maldives is spending beyond its means with government expenditure outstripping revenue for years, the World Bank has warned.

Contrary to the government’s estimate of 3.4 percent of GDP for the fiscal deficit in 2014, the World Bank said the deficit has been on “an upward trajectory since 2011” and reached an estimated 11.6 percent last year.

“Despite high revenue of 32.4 percent of GDP, Maldives is spending beyond its means reaching 44 percent of GDP, leading to persistent fiscal imbalances,” reads the South Asia Economic Focus 2015 report released last week.

“Subsidies, transfers and social welfare payments contributed substantially to the expansive spending,” the report stated.

The spike in expenditure resulted from President Abdulla Yameen’s decision to increase wages and an allowance to senior citizens from MVR 2300 to MVR 5000.

The World Bank meanwhile said the country’s risk of external debt distress has been reduced from high to moderate due to revised estimates of a lower current account deficit.

However, overall public debt is high at 74.6 percent of GDP in 2014, the report noted.

“Although the level of external public and publicly guaranteed debt remains below the policy-dependent thresholds under the baseline, a shock to tourism exports could make it difficult for the country to service its external debt,” the World Bank cautioned.

While imports and tourism receipts nearly balance each other out, the report explained that  “substantial outflows through interest payments, dividends and remittances keep the current account in a deficit at 8.0 percent of GDP.”

“The current account is more than fully financed by Foreign Direct Investment (FDI), and gross international reserves are estimated to have increased. Net FDI inflows are estimated at 13.3 percent of GDP,” it added.

Usable reserves are estimated at US$120 million, enough for less than half a months imports, but “the private sector is able to supply sufficient quantities of foreign exchange.”

“Faced with limited investment opportunities in the private sector, banks are parking their assets elsewhere; meanwhile financial soundness indicators have been improving,” it added.


While the government’s forecast for economic growth in 2015 is 10.5 percent, the World Bank said growth is projected at five percent and warned of a negative impact from spending cuts.

The International Monetary Fund has also welcomed the government’s cost-cutting and revenue raising measures for 2015, including imposing a green tax, acquiring fees from Special Economic Zones, raising import duties, a public employment freeze, and better targeting of subsidies.

The World Bank meanwhile suggested that state-owned enterprises may pose risks as “most are loss-making and depend on government support”.

Only nine companies have contributed dividends in the past four years, it noted.

“The immediate macroeconomic challenge is the fiscal and external imbalances driven by high and rising public spending,” the report advised.

“However, the economy also remains undiversified and sources of growth and employment remain misaligned. Besides, Maldives’ form of tourism- led growth has followed an enclave model, reliant on imported goods, labor and finance.”

Balancing the budget in two years is a campaign pledge of president Yameen, who said last year that the record MVR24.3 billion (US$1.5 billion) state budget for 2015 has a “primary balance surplus.”

The projected fiscal deficit for 2015 is MVR1.3 billion (US$84 million) or 2.5 percent of GDP, which president Yameen said was allocated for arrears or unpaid bills from recent years.


Tourist arrivals reach record high in February

Tourist arrivals reached an all-time record level for a single month with 120,468 visitors in February, the Ministry of Tourism has revealed.

Arrivals in February was 8.8 percent higher than the same period last year, which was “a significant improvement compared to the negative growth (-7.8 percent) registered in January 2015,” the tourism ministry observed in a statement on Thursday (March 19).

“With this boost, the total arrivals at end February 2015 was 217,541, an increase of +0.7 percent compared with the 216,001 tourists that visited during the same period of 2014,” the ministry noted.

The occupancy rate meanwhile declined by 4.8 percent this year, with an average occupancy rate of 80.8 percent. The average duration of stay was six days.

After falling 12.2 percent in December and 33.1 percent in January, Chinese arrivals bounced back in February with a 30.5 growth compared to February 2014.

A total of 43,349 Chinese tourists visited the Maldives last month.

At a press conference last week, Tourism Minister Ahmed Adeeb suggested that Chinese visitors increased sharply as the Chinese New Year was on February 13.

Adeeb noted that overall arrivals growth was at about one percent compared to the first two months of 2014.

“So our travel trends is not falling. The past month was a very profitable month,” he said.

However, the Maldives Inland Revenue Authority (MIRA) revealed earlier this month that revenue collection was 17.6 percent below forecasts due to “the decrease in tourism related revenues by 17 percent as tourist arrivals did not meet expectations.”

MIRA also revealed that US$2.2 million was collected last month as airport service charge, compared to US$2.3 million in February 2014.

However, Adeeb said income from Tourism Goods and Services Tax (T-GST) for February would be collected in March, and would reflect the arrivals hike.

Referring to travel alerts issued by the UK in the wake of political unrest sparked by the arrest of former President Mohamed Nasheed on February 22, Adeeb noted that tourists were only advised to avoid Malé due to demonstrations.

Asked if arrivals could decline in March due to the ongoing political crisis, Adeeb said the tourism ministry has been monitoring booking cancellations.

“Our monitoring shows there have been no booking cancelations in March,” he said, adding that he expected arrivals to remain unchanged from March 2014.

Condemning calls for tourism boycott, Adeeb said the government was countering the social media campaign by opposition supporters through marketing efforts by PR firms.

Adeeb suggested the tourism boycott campaign would not have “much of an impact.”

Regional markets

Europe retained top spot as the largest regional source market for tourist arrivals with a 49.3 percent market share in 2015.

However, with 107,263 visitors so far this year, total arrivals from Europe registered a marginal decline of 0.8 percent.

European arrivals in February declined by 1.9 percent compared to the same period last year on the back of a steep 53.4 percent decline in arrivals from Russia.

However, arrivals from the United Kingdom and Germany increased by 10.6 percent and 10.3 percent, respectively. The number of Italian tourists also grew by 10.3 percent compared to February 2014.

Total arrivals from Western Europe declined by 2.9 percent due to a fall of 15.5 percent in arrivals from France, which the tourism ministry said has been posting negative growth since July 2014.

In terms of individual markets, China remains the largest source market with a 29.3 percent market share, followed by Italy, the United Kingdom, and Germany.

Both the national carrier Maldivian Airlines and Mega Maldives launched direct weekly flights to Chinese cities during February.

The Maldives Marketing and Tourism Development Corporation (MMPRC) also conducted roadshows in three Indian cities last month to promote the Maldives as a destination for Indian tourists.

With 4,235 visitors, arrivals from India grew by 17.8 percent in February with a market share of 3.7 percent.

“During the last two months of 2015, while important markets such as Russia, and Japan registered declines of -43.9 percent and -0.6 percent respectively, significant increases were recorded from Denmark (+82.8 percent), United Arab Emirates (+47.9 percent), Brazil (+44.6 percent), Spain (+40 percent) and Romania (+33.9 percent) at the end of the period,” the ministry noted.

At the end of February, the Maldives had 308 registered establishments in operation with a bed capacity of 27,670.

“The operational capacity included 106 resorts with 23,247 beds, 15 hotels with 1,508 beds, 106 guest houses with 1,568 beds and 81 safari vessels with 1,367 beds,” the ministry revealed.

“The total tourist bed nights of these operational establishments at the end of the period was 1,313,259 which was a drop (-3.7 percent) compared with the same period of 2014.”

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Maldives participates in ITB Berlin fair

A total of 194 representatives from 75 tourism companies represented the Maldives this year at the InternationaleTourismus-Börse (ITB) travel trade show in Berlin.

The Maldives delegation was led by the Managing Director of Maldives Marketing and Public Relations Corporation (MMPRC) Mr. Abdulla Ziyath.

The MMPRC designed a new stand for the Maldives this year. The new design concept of the stand would allow for better business to business meetings in a modern setting with attractive imagery of the country.

“The stand has an interactive area for display of handicraft activity and cultural performances, and a more serene spa area to highlight on the relaxation and rejuvenation segment,” a statement by the MMPRC read.

“Furthermore, Maldivian gastronomy will be an added highlight at the stand through Maldivian made short eats.”


Tourist arrivals decline in January as Chinese arrivals slow down

Tourist arrivals to the Maldives in January 2015 declined by -7.8 percent compared to the same period last year, the Ministry of Tourism has revealed.

Arrivals in January stood at 97,073 visitors, down from 105,296 visitors in January 2014, according to monthly statistics from the tourism ministry.

“This was the fourth consecutive month where a negative growth was recorded in tourist arrivals to the country,” the ministry observed in a statement last week.

Consequently, the occupancy rate fell from 82.5 percent in January 2014 to 73.9 percent last month.

“However, the average duration of stay remained uniform at January 2014 level with 6.5 days, this however was an increase compared with the 6.1 days at the end of December 2014,” the ministry noted.

In contrast to the negative growth recorded last month, tourist arrivals grew by 18.5 percent in January 2014.

Tourist arrivals also registered negative growth in November (-5.1 percent) and December (-1.2 percent) last year on the back of a steep decline in arrivals from Russia and Western Europe as well as Asia and Pacific markets.

The number of Russian tourists declined by 44.7 percent in December 2014 compared to the same period the previous year.

Arrivals from China and Japan in December meanwhile dropped by 12.2 percent and 11.8 percent respectively.

Last month, industry insiders expressed concern that the Maldives could become an overpriced destination with the introduction of new taxes.

While the Tourism Goods and Services Tax (T-GST) was hiked from 8 to 12 percent in November 2014, the government announced that a US$6 per day ‘green tax’ would be imposed on tourists from November 2015 onward.

“The green tax will definitely have an impact. It is (already) becoming too expensive to go to the top resorts because of all the service charges and taxes,” Shafraz Fazley, managing director of Viluxur Holidays told travel website TTG Asia.

Chinese market

In a phenomenon that caught many industry experts by surprise, the number of Chinese tourists visiting the Maldives tripled from about 100,000 in 2010 to more than 300,000 last year.

In 2014, Chinese tourists accounted for nearly one-third of arrivals with a 30% market share, representing the single biggest source market for tourists to the Maldives.

A total of 363,626 Chinese tourists visited the Maldives in 2014, up 9.6 percent from the previous year, which saw 331,719 arrivals.

However, during 2014, the annual growth rate of Chinese tourist arrivals slowed from 20 percent at the end of June to 9 percent by the end of December.

“Arrivals to the Maldives from China started slowing down during mid-2014 and negative growths were registered since August that year,” the tourism ministry explained.

“January 2015 was recorded as the worst performed month for the Chinese market to the Maldives so far, with a strong negative growth of 33.1 percent. China being the number one market to the Maldives, the negative growth registered from the market was reflected in the total arrivals to the country.”

Meanwhile, according to the tourism ministry’s visitor survey for 2014, less than 10 percent of Chinese tourists were repeat visitors.

In contrast, the survey found that more than 25 percent of British, Italian and German tourists visited the Maldives between two to 10 times.


With the decline in arrivals from China, Europe has regained top spot as the largest regional source market for tourists, increasing its market share from 43.9 percent at the end of December to 54.1 percent in January.

A total of 52,545 visitors were recorded from European countries, representing a marginal growth rate of 0.5 percent compared to January 2014.

In 2014, the annual growth rate of tourist arrivals from Europe flatlined to 0.4 percent.

However, with Chinese arrivals representing more than a quarter of visitors, total arrivals during the year reached the government’s target of 1.2 million visitors.

In terms of individual markets in January 2015, Italy was the second largest source market with an 8.3 percent market share, followed by the UK with 7.4 percent, Germany with 7.3 percent, and Russia with 6 percent.

However, Russia was the worst performing market during January, the ministry noted, registering negative growth of 38 percent.

Registered establishments

In January, the Maldives had a total of 529 registered tourist facilities with a total bed capacity of 32,087, including 112 resorts (24,151 beds), 19 hotels (1,704 beds), 231 guesthouses (3,397 beds) and 167 safari vessels (2,835 beds), according to the tourism ministry.

However, a total of 302 establishments (27,520 beds) were operational during the month, the ministry revealed.

“Operational capacity included 106 resorts with 23,247 beds, 15 hotels with 1,468 beds, 107 guest houses with 1,569 beds and 74 safari vessels with 1,236 beds,” the ministry’s statistics showed.

“The total tourist bed nights of these operational establishments in January 2015 was 630,840 which was a drop (-7.8%) compared with that of January 2014.”

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Romanian tourists increase by 32 percent in 2014

The number of tourist arrivals from Romania to the Maldives has increased by 32 percent in 2014.

According to Romania-Insider, 3204 Romanians traveled to the Maldives in 2014 – an increase of 781 arrivals compared to the 2423 arrivals 2013.

The increase in arrivals was attributed to the commencement of chartered flights from Bucharest, Romania to Ibrahim Nasir International Airport (INIA).

“Most tourists went to the islands in December last year, namely about 678, almost double compared to December 2013, when only 371 traveled there,” read the Romanian insider.

Romanians only account for 0.3 percent of the market share of tourists arriving in Maldives.


President Yameen warns of adverse impacts on tourism from threats against guests

President Abdulla Yameen has warned of adverse impacts on tourism from threats against tourists and urged Maldivians to leave aside political differences to assure a safe and secure environment for investors and tourists alike.

Yameen’s statement comes in the aftermath of a death threat issued against Jamaican dancehall artist Sean Paul who is scheduled to perform in Malé on New Year’s Eve.

“Even if such incidences do not actually disrupt the peace, if [guests] believe there is any danger, if they believe there is a threat, we are in effect pouring water into a bottomless container,” Yameen said in a speech in Addu City last night.

The President’s Office yesterday said that the online death threat against Sean Paul was a “local hoax” aimed at damaging the country’s reputation.

An investigation has revealed the threat is “designed to dissuade visitors, create an atmosphere of fear” and aimed “at tarnishing the longstanding reputation of the Maldives as a destination of peace, security, and tranquility,” the President’s Office said.

The video, which has since been removed, promised Sean Paul that “the world will see your burnt and blood drenched dead body,” should he perform in the Maldives.

Representatives of the singer are reported to be undecided about whether the performance is to go ahead.

The tourism ministry’s statistics have meanwhile revealed a 5.1 percent decline in tourist arrivals in November compared to the same month last year.

However, the Maldives welcomed 1.1 million arrivals by November’s end due to a strong growth in arrivals in the first half of the year. The figure amounts to a 7.9 percent increase in arrivals compared to 2013.

President Yameen said the government aims to bring the world’s wealthy to the Maldives and said Maldivians must find common ground with the government despite differences in political ideologies.

“With utmost sincerity, I note it will not be the same leaders ruling the country. Today it is me. Tomorrow it will be someone else. But Maldivians will continue to live on this land. This land must be peaceful,” he said.

Maldivians must not allow foreigners the opportunity to influence the country’s internal affairs, he continued.

“We must not call on foreign militants to come to the Maldives claiming the situation is bad in the Maldives,” he said.

The opposition Maldivian Democratic Party (MDP) has expressed concern over declining tourist arrivals at the onset of the peak tourist season in the Maldives, blaming the government for lack of a clear policy on tourism and ad-hoc decisions to levy additional tourism taxes.

Noting a seven percent decline in arrivals from European Union, a 22 percent decline from Eastern Europe, four percent from the United Kingdom, 24 percent from France, three percent from Italy, and a 13 percent decline from India in November, opposition leader and former President Mohamed Nasheed in a tweet said “the government’s policy will damage the industry”.

Tourists from the European Union made up 43.3 percent of arrivals while Chinese tourists made up 31.4 percent of arrivals. Russian arrivals declined by 31 percent this year due to the economic downturn in the country.

Nasheed said the threat against Sean Paul is the latest threat to artists by extremists in the country, arguing that “Government support for and refusal to prosecute them [extremists] will affect tourism.”

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Expansion of economic activity in third quarter driven by tourism sector: MMA

Expansion of domestic economic activity in the third quarter of 2014 was “driven by the sustained growth of the tourism sector,” according to the Maldives Monetary Authority’s (MMA) quarterly economic bulletin.

“Total tourist arrivals to the country increased to 299,491 in Q3-2014, growing by 7 percent when compared to the corresponding quarter of last year while bednights grew by 5 percent,” the bulletin stated.

The central bank explained that the “difference in the growth rate of arrivals and bednights is explained by the fall in the average duration of a tourist visit from 6.0 days to 5.8 days during the period.”

Tourism receipts are meanwhile projected to reach US$594.9 million in the third quarter, an annual growth of 20 percent.

“In Q3-2014 the average operational bed capacity of the industry also increased by 4 percent when compared to Q3-2013 and rose to 26,921 beds, contributed by the opening of three resorts and thirty-three guesthouses during the period,” the bulletin revealed.

“Despite the increase in the operational bed capacity of the industry, the occupancy rate of tourism accommodation facilities remained relatively unchanged at 70 percent when compared to Q3-2013, owing to the higher increase in bednights.”

However, tourist arrivals in November declined by 5.1 percent compared to the same period last year, according to statistics from the tourism ministry.

While tourist arrivals reached 89,778 guests last month, 94,584 arrivals were recorded in November 2013, with arrivals from Europe and the Asia Pacific region down 6.8 percent and 4.6 percent, respectively.

Industry insiders had previously noted that a recent increase in T-GST alongside the continuation of Bed Tax in November had contributed to fewer bookings.

The Russian market meanwhile continued to decline due to the weakening of the Russian economy, with Russian arrivals declining by 31.3 percent to 5,273 arrivals in November from 7,675 arrivals in November 2013.

“Arrivals from the country declined at an annual rate of 7 percent in Q3-2014, compared to a decline of 5 percent in arrivals in Q2-2014,” the bulletin stated.

The number of Chinese tourists – representing the single largest market share with 27 percent – declined by 4.9 percent.

However, total tourist arrivals from January to November increased 7.9 percent from 1,020,190 guests in the corresponding period last year to 1,101,113 in 2014.

The MMA’s quarterly bulletin observed that the Chinese market was the “single major contributor to arrivals growth” in the third quarter of 2014, increasing by 8 percent compared to the previous quarter.

“Meanwhile, arrivals from Europe (which constitutes over half of total tourist arrivals) registered a marginal increase of 2 percent in Q3-2014 compared to a 6 percent growth in Q2-2014, contributed mainly by the increase in arrivals from Germany and Spain,” the bulletin noted.

“While the UK market (the largest market from Europe) posted a sluggish performance owing to weak economic conditions, the German market, being the second major source market from Europe, registered a 7 percent growth (12% growth in Q2-2014). Both Germany and UK each accounted for about one-fifth of European arrivals during Q3-2014.”

Other sectors

The central bank noted that the fisheries sector “continued to be adversely affected by falling tuna prices that deteriorated further in the international market during the review quarter.”

The volume of fish purchased from local fishermen by fish processing and exporting companies in the third quarter registered an annual decline of 24 percent, the MMA revealed.

“Additionally, the poor performance of the fisheries sector was also reflected by the fall in both the volume and earnings of fish exports in Q3-2014, by 31 percent and 21 percent, respectively,” the bulletin explained.

The construction industry “continued to strengthen, as indicated by the strong annual growth in construction-related imports and commercial bank credit to the sector.”

Reflecting a 17 percent annual increase in commercial bank credit to the wholesale and retail sector as well as a 13 percent annual growth in private sector imports, the bulletin noted that trade activity also improved in the third quarter.

The rate of inflation in the capital meanwhile decelerated from 3.1 percent in the second quarter to 2.5 percent in the third quarter, “contributed primarily by the slower growth in food prices.”

“Meanwhile, inflation excluding the volatile fish prices also decelerated during the quarter at the same rate as total inflation, explaining the relatively stable fish prices during the year as a whole,” the bulletin observed.

Overall inflation remained “steady and low” at 5.0 percent, the central bank noted.

“However, food inflation registered a much lower rate of 0.2 percent in the review quarter, compared to 3.2 percent in Q2-2014 and 7.4 percent in Q3-2013.

“A large decline in prices was noted for vegetables, particularly onions, and can be attributed to the significant decline in onion prices in India, where 89 percent of onions are imported from. The slowdown in domestic food prices also reflect the easing of global food prices, which have been declining for the most part of 2014.”

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