Op-ed: How to stop unscrupulous businessmen charging obscene fines for late payments
The CEO of Soneva resorts calls for a cap on penalty interest.
09 Nov 2019, 9:00 AM
The Maldives is one of the world’s best places to operate a resort. And yet, the cost of borrowing the money to build one is eye-wateringly high. How do we explain this paradox?
My wife Eva and I opened our first resort, Soneva Fushi, in 1995. We continue to invest in the country, and remain enthusiasts because the economic fundamentals of the Maldivian tourism industry are so strong.
The Maldives commands some of the world’s best hotel returns. The country’s REVenue Per Available Room (REVPAR) rate, currently standing at US$434, is around four times higher than in competing tourism destinations such as Barbados, Bali, or Phuket. Last year, the Maldives’ clocked up an average daily room rate of US$648, with an occupancy of 66.9% — not far off what a top London hotel earns.
The Maldives also benefits from low operating costs. The country’s free labour market means labour costs are reasonable for South Asia. All in all, operating margins are very healthy.
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