Tourism decline due to negligence in promoting destination: ‘Sun’ Shiyam

The MDA allied with the Progressive Party of the Maldives (PPM) for the recent election, in which PPM candidate Abdulla Yameen was declared President.

“Tourist arrivals from European markets have gone down more than ever before. Maldivians are not able to enjoy the real benefits, because of negligence in promoting tourism,” Shiyam alleged in local media.

Tourism marketing is overseen by the Maldives Marketing and PR Corporation (MMPRC) and Tourism Ministry, the minister of which, Ahmed Adheeb, was last week reappointed to the same post in Yameen’s government. The MMPRC’s former head, Mohamed Maleeh Jamal, was appointed Minister of Youth and Sports.

Shiyam warned of a deteriorating economic situation that could leave the government no other option than cost cutting.

According to a recent report by the Finance Ministry, tourism growth flat-lined in 2012 as a result of two years of political turmoil.

The tourism industry’s Gross Domestic Product (GDP) growth in 2012 declined by 0.1 percent following 15.8 percent growth in 2010 and 9.2 percent in 2011, the Finance Ministry revealed in a “Fiscal and Economic Outlook: 2012 to 2016″ statement included in the 2014 budget (Dhivehi) submitted to parliament.

“The main reason for this was the political turmoil the country faced in February 2012 and the decline in the number of days tourists spent in the country,” the report explained.

Tourism growth is measured in bed nights, as arrival figures – predicted to top one million in 2013 – do not necessarily give a clear picture of the industry’s performance.

“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,” noted the Finance Ministry’s report.

The Maldivian economy is largely dependent on tourism, which accounted for 28 percent of GDP on average in the past five years, and generated 38 percent of government revenue in 2012. Indirectly the industry is thought to contribute up to 70 percent of GDP, and 90 percent of all foreign exchange.

Much of that revenue is generated through the tourism GST, introduced during the Nasheed government amid resistance from many of the country’s resort tycoons. It is currently set at 8 percent, however the new government has warned it may increase it to 12 percent in an attempt to match its high levels of expenditure.