President Solih pledges small business loans for guesthouses

President Ibrahim Mohamed Solih pledged Saturday night to open a new bank to provide loans to aspiring guesthouse operators.

The announcement came at the closing ceremony of a guesthouse symposium organised by the tourism ministry. More than 340 operators, atoll and island councillors, top government officials and tourism industry heavyweights were in attendance.

Organising the symposium and promoting guesthouse tourism through the government’s destination marketing were part of the first 100-day action plan of Solih’s administration.

“The biggest worry for guesthouse businesses and aspiring businesses is not having money to invest,” Solih said.

“In February, we will start work to open an SME bank. At first, we will open a financial institution, which will start to provide loans to build guesthouses and homes by end of February.”

A state-owned institute called SME Financing and Development Corporation would be set up and later upgraded to a depositary company. The bank’s shares will be held by the councils of the three cities – the capital Malé and the southernmost Fuvahmulah and Addu.

Island development and local tourism are inter-dependent, Solih observed, calling for an all-encompassing system for decentralisation and local tourism.

The first guesthouse on an inhabited island opened on Maafushi in 2010, an island hailed by the World Bank for its inclusive wealth creation. The country’s lucrative tourism industry was previously built on the one-island, one-resort model with hotels developed on uninhabited islands.

At present, there are 515 guesthouses, 145 resorts, 148 tourist vessels, 12 hotels, 212 dive centres, and 312 tour operators in operation, according to a presentation given at the event.

The theme of the symposium was ‘Towards Sustainable Tourism.’

President Solih said the guesthouse tourism experiment has shown that the Maldives must not be marketed only as a high-end, luxury destination, but as a mid-market and budget-friendly holiday destination as well.

He went on to criticise resorts that refuse to distribute service charges to employees and fail to employ the legally mandated quota of local workers.

The tourism ministry is working on ensuring that all resorts abide by the law, he said.

The government is also considering offering tax incentives to resorts that employ more Maldivians than required, he announced.

Speaking at the ceremony, Thoyyib Mohamed, the managing director of the Maldives Marketing and Public Relations Company, announced plans to host an international travel writers conference and hold guesthouse marketing seminars in 11 regions across the country next year.

Tourism Minister Ali Waheed said the government would formulate a strategic master plan for guesthouse tourism before the end of the first 100 days. The ministry is also working on revising regulations for decentralisation, tax rules, and waste management to facilitate guesthouse tourism.

He launched two hotline numbers to file complaints with the ministry.

According to the tourism ministry, the main objective of the symposium was “to create a platform for guesthouse operators and relevant government authorities to come together and discuss issues and constraints.”