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.

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Roadmap talks stall as government parties contest legitimacy of MDP representatives

The India-sponsored all-party talks ground to a halt again yesterday, after parties affiliated with the ruling coalition challenged the legitimacy of the Maldivian Democratic Party (MDP)’s representation.

The ousted party’s President Dr Ibrahim Didi and Vice President Alhan Fahmy were removed from their posts last week in a near unanimous vote by the party’s national council. The pair are contesting their dismissal.

“The Progressive Party of the Maldives (PPM) delegate walked out questioning the legality of the MDP leadership,” explained Dr Mariyam Zulfa, who represented the MDP at the talks, together with party spokesperson Hamid Abdul Ghafoor.

“We are of the opinion that they had planned to derail the talks before they had begun. The PPM delegate said legitimacy of the [MDP’s] leadership was in question. I think it was not a matter for them to decide,” Dr Zulfa said.

“Our representatives went through the protocol and processes and were authorised to attend. This is a plan to stall the talks,” she added.

Dhivehi Rayithunge Party (DRP) Deputy Leader Ibrahim Shareef, of the new ruling coalition which the MDP contests came to power in a coup d’état on February 7, said the DRP was now waiting for the Elections Commission (EC) to make a decision on the legality of the MDP’s current leadership, and its authority to appoint representatives to the all party talks.

“[The representatives] must be properly endorsed by the party. Somebody with the authority to nominate the representative of the party, such as President or Vice President,” he said, noting that the DRP was “unhappily” not present during yesterday’s talks.”

Dr Zulfa described the roadmap talks as “a bit of a farce”.

“[President] Dr Mohamed Waheed is purporting to the international community that he is bringing all the parties to the table, but on the weekend he went out in public and said the earliest he would hold elections was July 2013. He is saying one thing and doing quite the opposite. It is very revealing to us,” she said.

“The PPM is behind the coup-led government, and the longer they can stay in power the better it is for them. They have not taken into account the people’s vote – our agenda is to restore the legitimacy of government,” Dr Zulfa said.

The talks previously stalled in March after parties were unable to agree on a priority for the five item agenda, which includes early elections.

“The MDP at first chose to not take part in the talks, and there was such a big outcry from the opposition parties that we were not acting in good faith,” Dr Zulfa said. “Now we are participating, early elections are on the agenda, and they are saying the talks are designed so that MDP will benefit the most from them. It is quite amazing.”


MATI concerned over “concerted international campaign” against several resort owners

The Maldives Association of Tourism Industry (MATI) has issued a statement expressing “serious concern” over what it describes as a “concerted international campaign” against several of the country’s resort operators.

MATI claimed that calls from the Maldives Tourism Advisory (MTA) for tourists to avoid certain properties on the basis of ownership were “libelous in the extreme”, as the allegations against the tourist resort operators “have not been proven either through an investigation or a court of law.”

The MTA website features a ‘traffic light’ system with “red” resorts recently appearing to have been expanded to include an assortment of 18 properties owned by Vice President Waheed Deen and senior figures associated with the new ruling coalition, including Jumhoree Party (JP) Leader Gasim Ibrahim, Progressive Party of the Maldives (PPM) MP Abdulla Jabir, and Hussain ‘Champa’ Afeef.

MATI claimed that “unsubstantiated charges directed at some resort operators [will] result not only in loss of business at their resorts, but in loss of reputation and standing in international markets and the global community.”

“A call to boycott the resorts could [also] lead to enormous loss of business and lay-off of resort staff and support workers, not to mention those several small businesses that cater to the tourism industry that will be affected.”

The resort body accused the campaigners of “not having the decency to come out in the open” and “hiding behind the safe veil of the internet.”

“It is our belief that the several accusations and charges directed at the operators of resort businesses must be proven in a court of law before these businesses are subject to industrial action or denunciation.”

The MTA yesterday released a statement in response to MATI, emphasising that it was not calling for a boycott but rather “supplementing” existing travel advice from the UK’s Foreign and Commonwealth Office (FCO).

“Visitors choosing to be selective and avoiding resorts tainted by the actions of their owners might lead to some loss of business to these resorts, but we are quite convinced that it would not have an overall impact on the economy of the Maldives,” the MTA said in a statement. “Nor would it seriously affect the prospects of employment for Maldivians. This is proven by the government’s own figures showing a healthy increase in tourism arrivals.”

“While MATI mentions investigations of resort owners in a “court of law” it can clearly be seen that the Maldivian judiciary would be an inappropriate institution for such an investigation, given that one of MATI’s senior members (and whose resorts we recommend avoiding) sits on the Judicial Services Commission (JSC), the body tasked with overseeing the judiciary,” the MTA noted.

“”The only ‘investigation’ that we are aware of at present is the Commission of National Inquiry (CNI). This is deemed to be neither serious, timely nor unbiased by international observers and most Maldivians. No serious efforts have been made to address the deficiencies in this investigation, and they do not involve the resort owners mentioned in the MTA.

“The MTA always carefully considers all the available facts from several sources when recommending resorts to be avoided. There is no necessity to await ‘investigations’ and “courts of law” (as the MATI statement suggests) as MTA recommendations are based on important information that serves to enable visitor choice.”

Quarterly tourism figures published by the Maldives Marketing and Public Relations Corporation (MMPRC) showed a 3.3 percent rise in visitor arrivals compared to the same period in 2011, however this was lower than the 12.6 percent growth seen in the first quarter of 2011 compared to 2010.

Growth in Chinese arrivals slowed dramatically due to cancelled charter flights, while several of the country’s mainstay markets declined – including Italy, France and the UK. Russian, German, Swiss and Middle Eastern arrivals showed strong increases.

Tourism Minister Ahmed Adheeb and former Tourism Minister Dr Mariyam Zulfa were not responding at time of press.


MDP supporters march through Male’, condemn Speaker’s inaction

The Maldivian Democratic Party (MDP) on Friday marched through the streets of Male’ in support of this week’s Commonwealth Ministerial Action Group (CMAG) statement.

Former Tourism Minister Mariyam Zulfa said the march was intended to show that the people of the Commonwealth are ‘standing shoulder to shoulder’ in support of CMAG. The march was intended to demonstrate that the government’s claims the CMAG did not truly represent the people of the Commonwealth was incorrect.

CMAG met last Monday, calling again for early elections and threatening stronger measures should the government fail to improve the impartiality Committee of National Inquiry (CNI) the body assigned to investigate February’s transfer of power.

Zulfa reported that a group of around 10,000 people left the Usfangandu area at around 4:30pm yesterday, picking up more supporters as it progressed. The marchers were said to have returned to the Usfangandu area at around 6:45pm. Zulfa also reported simultaneous protests across the country.

At the start of the march, the group is reported to have headed towards the residence of the Speaker of the House Abdullah Shahid, where there was a brief pause while the protesters called for Shahid’s resignation. The group then continued past the Majlis, also stopping outside the residence of the Minister of Defence, Mohamed Nazim.

The MDP representation in the Majlis submitted a no-confidence motion against the speaker this week, arguing that Shahid had failed to follow parliamentary regulations consistently, and also that he had made decisions without adequately consulting all of the parties in the Majlis.

Zulfa explained the MDP’s belief that the speaker should have taken a leading role in pushing for fresh elections, citing the recent example of the coup in Mali, after which the speaker of the country’s legislature Dioncounda Traore assumed power and promised new polls.

“We have been very patient [with Shahid]. Now, instead of asking him for his leadership, we are asking him to resign,” said Zulfa. Responding to the president’s claim this week that early elections could be held in July 2013, Zulfa said: “We don’t call that early at all.”

“From the examples of other coup governments, we know that this is a stalling tactic,” said Zulfa.

July represents the earliest point that the president can move the elections forward under the current rules of the constitution.


Q&A: Former Tourism Minister Dr Mariyam Zulfa

Dr Mariyam Zulfa is the former tourism minister of the Maldives, appointed by Mohamed Nasheed’s administration in November 2010. Prior to her appointment she was a Managing Partner with the law firm Duckham & Co, Lawyers. She holds a PhD from Curtin University in Australia, and in her thesis examined the competitiveness of small island tourism destinations. Dr Zulfa also holds a Bachelor of Arts in Urban & Regional Planning and a Masters of Business Administration (MBA), and has worked as a tourism law lecturer in Australia.

Daniel Bosley: What is the average resort owner thinking about the current political crisis in the Maldives and its impact on the economy?

Dr Mariyam Zulfa: I think everybody is in a state of shock at the moment because the turmoil in the country will definitely have an impact on the image of the destination. The [pro-government] forces are trying to paint the picture that there is a lot of violence in the country and that the violence is being instigated by the Maldivian Democratic Party (MDP), which is not true at all. All we are doing is holding peaceful demonstrations and calling for early elections in order to ensure the legitimacy of the government.

Our tourists come from developed countries and I think they have the maturity to understand that people have the right to freely express their views on political matters. In that sense I don’t think the resort owners should be very worried about tourists concerns as to whether the place is going to be safe or not. The resort owners like to say that the situation in the country is safe and I think it is so because the only thing we are doing here is expressing our views on the political situation, and that the current President has assumed his role after a coup.

DB: Have you had any questions from resort owners?

MZ: Not really no, because the government, as it should, has been spreading the message through its own PR machinery that the country is safe.

DB: How have different markets been reacting?

MZ: I am given to understand that many Germans, for example, and many people from the UK, are questioning the welfare of the people of Maldives and that is not necessarily a bad thing.

I have personally had a number of communications from interested persons, especially from Germany and the UK, asking what is happening in the country, and that is a good sign because the traveller is not a nameless faceless body that comes here. I think people who travel are also conscientious people who care about the well-being of the people of the countries that they visit. I would tend to think that the political concerns of a wide majority of the Maldivian people are indeed something worth listening to.

I’ve has quite an overwhelming number of emails and communications sent to me asking about what’s happening in the country and when a political resolution is going to be found, what they could do to help; because of course they will see on the media that a large number of people, including a large number of women,for the first time in the Maldives are demonstrating continuously about how unhappy they are with the coup-led government in the country.

I have also received many calls from the Maldives’ foreign investors who are concerned about the current situation.

The silly thing about what the government is trying to do is portray to the international media that there is violence in the country. Indeed, that is not the case, we are expressing our unhappiness about how undemocratic the coup is. A coup is a coup is a coup, and can never be accepted as something legal or legitimate. That is a message that I think needs to be understood by members of the travelling public who come to the Maldives.

DB: Do you think that there is a risk that resorts will trade their political support for short-term stability?

MZ: It’s not the MDP’s intention to interfere in any way with the economic gains that we have made in the tourist industry. Nevertheless, we say that some people in the resort industry were actually involved. We have information that could be used as evidence to say that some members in the resort industry were behind, for example, in financing the coup and so on. So, in that sense it is connected to the tourism industry. But it has never been the MDPs intention and it will never be the MDPs intention to obstruct the progress that we have made in the tourism industry.

But, having said that, I will say that it is our duty also to inform the travelling public that a wrong has been done unto the people of the Maldives and following from that, we provide the information about the political situation in the country so it is up to that traveller to either decide to do something about it or carry on with their decision to travel to the destination. It’s not in our agenda to affect the travellers decision to choose Maldives as a destination at all.

DB: Do you think the alleged involvement of some resort owners harms the image of all resorts?

MZ: Neither a formal nor an informal investigation has been completed so far but there is evidence to show – and material that can be used as evidence – that leads us to the conclusion that some people in the tourist industry have been behind at least the financing of some of the operations that led to the overthrow of President Nasheed [on February 7]. But I can’t categorically say exactly who was involved unless a formal investigation has been completed. Some in the industry were involved, not all. Amongst them were a couple of major players in the Maldives [tourism] industry.

DB: What did you think of the Friends of Maldives travel advisory, asking tourists to avoid particular resorts associated with these players?

MZ: I have actually not seen the Friends of Maldives advisory. I heard about it in the media to boycott the resorts of the alleged coup perpetrators, but my opinion is that it is not the MDP’s policy, it was something done by an organisation that wished us well and that their purpose would also have been to disseminate information about who were behind the activities that led to an illegitimate government coming into place. I would like to think it was done to spread information, not to deliberately harm the economy or hurt the industry in any way shape or form.

DB: What do you think of the government’s lease-extension and payment deferral decision?

MZ: The lease extension is about increasing the asset value of the properties. In the Maldives, all the islands actually belong to the government and when the second amendment to the tourism law came into place it gave the option for resorts to extend the existing 25 year leases to 50 years. A time period was given and there is a clause that stipulates that the payment must be done in completion before the lease period can be extended. So, the Nasheed government had interpreted that clause as the payment to be paid in full for the period extended. So, because the wording is such that the payment must be complete before the extension is granted, we interpreted it as the full payment.

But there is another clause which says the manner in which the payment is calculated is on an annual basis. This government has over-interpreted that clause and has said that the payment has to be made on an annual , but I have always insisted that the value of the government assets must not be allowed to decrease because the payments go to funding welfare services, housing projects, infrastructure projects, health services and so on that would benefit the local community.

The current government has not only allowed payment to be made  on an annual basis but for the payment to start at the end of the 25 year period, which is years away. It is a huge loss to the government treasury, about US$150 million, and I think as a result that a lot of people will be deprived of the many projects that we have started for the benefit of the communities across the atolls.

Furthermore, I have had news that the government has borrowed US$50 million on a sovereign bond. There is no need to resort to this kind of borrowing when resort investors could provide that money easily. The interesting thing about it is that many resort operators had actually agreed to lump-sum payments, and a lot of them had already done so, because people are very conscious of the fact that services have to be provided to the people and it is a way to support the government budget to do so.

I this noticed because some the influential people behind the coup perpetrators have been pressuring me for some time now to do this so, again, it’s not everybody in the industry but some who had a vested interest in deferring the payment.

Now of course they have the power to decide in any manner that they want and this was one of the first things that they did when they came into power.

DB: The government continues to emphasise the separation of tourism and politics. Is it a good idea to have such a divide between the politics/society and a country’s biggest source of income?

MZ: Tourism and politics have always been separate so I’m quite baffled as to why now they are saying this. It has never been the MDPs intention or any other political party’s intention to harm the economy in any way. So I’m surprised as to why this message is going out to separate tourism from politics. Even in my time at the ministry I have always maintained that Tourism Minister will never be colour coded and we have worked with all stakeholders who have come from all different parties. Even with the new projects we don’t look at anybody’s political background, it has always been very robust in this sense.

DB: With Nasheed’s interest in mid-market tourism as an example, is bringing broader societal issues into tourism something the MDP is interested in?

MZ: Yes, it cannot be any other way because the Nasheed government is about the people and with tourism and every other economic policy, we have strived to put in place a fair go for all. For example the small and medium loan schemes encouraged middle-scale businesses to go into fruitful operation and we tried in every way to encourage the small business owner and the medium SME owners to get ahead in life. Because our philosophy is to do things for the people as opposed to making the rich richer, so in that sense even in tourism we came up with the mid-market policy and the policy to develop guest houses and city hotels across the country especially as a source for more people from the community to participate in the tourist industry – that is our aim. It not anything political at all.

The only way this can be viewed as political would be now people who are already successful, multi-millionaires in the industry, will tend to think that if you spread it around too much their businesses might become shaky. But the way we designed it is not to disrupt the apple cart in any way.

We were always going to emphasise the fact that Maldives is a luxury destination. People who seek that sense of luxury actually come, that was always going to be our main theme when promoting the Maldives yet at the same time we had wanted for more people to be participating directly not only in the business side but from the benefits of tourism in the communities. And also of course we wanted more tourists to see more of Maldives at a value for money price.

The former tourism masterplan, which was effective until 2011, said that islands specifically selected by the government have to be put on tender. But the way the Nasheed government did it was to open up all the islands in the country again to deviate from making the rich richer kind of philosophy to opening up the country to whoever has the ability, ambition and drive to apply for a tourism development to do so.

It was perfectly legally-allowable because the tourism law states that you can do a joint development with the government, so for example the government owned five percent and the developer 95 percent, which was legally permissible. But the interesting thing is that the current administration is saying we were doing that in contravention of tourism law – that is not the case.

Article 5 of the tourism law actually says that a joint venture can be allowed with the government as a shareholder. That is what we were doing instead of making the already rich richer, we were opening the islands to everybody who wanted to apply and with the means to do so.

In the past when you put something on tender, the process is so complicated and costly you have to know the right people in the right places, so the average person who was desirous of joining the tourism industry was very far-removed from anything to do with moving towards successful application.

Equity is what the Nasheed government was about and providing more opportunities for the able person, not necessarily the well-connected person. I don’t think there’s anything wrong with that approach so I don’t find it surprising at all when some of the already established enterprises in tourism are saying that these kinds of policies have been perpetrated by the Nasheed government for political reasons. It’s not for political reasons, it’s for reasons of equity.

DB: How do you see the political instability affecting tourism in the long run?

MZ: I don’t think that the political situation is actually affecting the tourism industry as such because Maldives is a well-established destination. The Maldives is a unique destination. You don’t find this kind of geographical competitive advantage in any other country. 1200 islands ringed into atolls, unique lagoons and beaches, the various shades of blue that make the islands so attractive. I have seen many tourists actually cry in amazement, it’s so beautiful.

The political situation is not going to affect the beauty that we have in the islands that we offer to the tourists. But I think the tourist industry has a responsibility to provide correct information about Maldivian life in general because I have had interaction from my experience as tourism minister that even the wealthiest tourists who come here are genuinely concerned about the well-being of the average person, they want to contribute financially and to better the life of the average citizen, and that is what the government was doing.

I think the tourism industry has the responsibility to provide information on the great wrong that had been done unto the average person of the Maldives which is denying them the government that has been legitimately installed through their vote.


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