Maldives to cut land rent to boost tourism in least explored atolls

Tourism officials in Maldives have proposed cuts to rent levied from islands and land in outer atolls for tourism development, in a bid to boost tourism in atolls with low concentration of tourist facilities.

Economic minister Fayyaz Ismail, who is overseeing the tourism ministry after the portfolio became vacant earlier this month, said Monday that rent charged for islands and land leased from the northernmost and southernmost atolls will be reduced

For uninhabited islands leased for resort development, the government is proposing:

  • Addu and Fuvahmulah: $2 per square metre (capped at $800,000)
  • Haa Alif and Haa Dhaal atolls: $4 per square metre (capped at $1 million)
  • Shaviyani, Gaaf Alif, Gaaf Dhaal, Thaa, and Laamu atolls: $6 per square metre (capped at $1.5 million)

To boost local tourism, land rent charged on built-up area in inhabited islands will also be reduced:

  • Addu and Fuvahmulah: $1 per square metre (capped at $400,000)
  • Haa Alif and Haa Dhaal atolls: $2 per square metre (capped at $500,000)
  • Shaviyani, Gaaf Alif, Gaaf Dhaal, Thaa, and Laamu atolls: $3 per square metre (capped at $800,000)
  • Other atolls: $4 per square metre (capped at $1 million)

“This will definitely boost investment in these atolls,” Fayyaz said, on Twitter.

The announcement comes less than a month after the tourism ministry revealed plans to allocate more uninhabited islands for resort development and open bids at the end of the year and early next year.

Local laws allow tourism leases of up to 100 years.

Maldives, known world over for its upmarket tourism industry, has resorts in the hundreds spread across the archipelago. The industry has in recent years expanded to introduce more affordable segments, including guesthouses and liveaboards.

Official figures show that 166 resorts, 13 hotels, 618 guesthouses and 158 liveaboard vessels are registered in the Maldives.

The Government had earlier said that a total of 132 tourism projects involving 140 islands are being carried out across the Maldives.

The government had also ramped up tourism promotion with new initiatives and more funding.

Despite several new resort developments and a boom in guesthouse tourism, several atolls in the northernmost and southernmost regions of the country are still struggling to attract tourism investments.

The southernmost Addu atoll has only three resorts, while the northernmost Haa Alif, Haa Dhaal and Shaviyani atolls are home to just one each.

The coronavirus outbreak has hit the Maldivian economy hard, as travel restrictions and other preventive measures affect the country’s lucrative tourism industry, which contributes the bulk of the island nation’s state revenue and foreign reserves.

Before the pandemic, the government had been bullish about tourism prospects, targeting two million, high-spending holidaymakers this year after last year’s record 1.7 million.

However, only 382,760 tourists visited the Maldives before the country closed its borders on March 27. It was a 40.8 per cent decline over the 646,092 that visited the Maldives from January to March last year.

With arrival numbers falling, several resorts across the Maldives had been closed.

Tourism has been the bedrock of the Maldives’ economic success. The $5 billion-dollar economy grew by 6.7 per cent in 2018 with tourism generating 60 per cent of foreign income.

However, the government is at present projecting a possible 13 per cent economic contraction this year — an estimated $778 million hit.

On March 8, Maldives reported its first cases of the novel coronavirus, as two hotel employees tested positive for Covid-19 at a luxury resort in the archipelago.

Eighteen more cases — all foreigners working or staying resorts and liveaboard vessels except five Maldivians who had returned from abroad — were later identified.

A six-case cluster of locals, detected in capital Male on April 15, confirmed community transmission of the coronavirus. Several more clusters have since been identified, bringing the total number of confirmed case in the Maldives to 2,999.

Fifteen deaths have been reported and 2,369 have made full recoveries.

The Maldives announced a state of public health emergency on March 12, the first such declaration under a recent public health protection law.

The public health emergency declaration allowed the government to introduce a series of unprecedented restrictive and social distancing measures, including stay-at-home orders in capital Male and its suburbs, a ban on inter-island transport and public gatherings across the country, and a nationwide closing of government offices, schools, colleges and universities.

Non-essential services and public places in the capital such as gyms, cinemas and parks were also shut.

Restaurants and cafes in the capital were asked to stop dine-in service and switch to takeaway and delivery.

A nationwide shutdown of all guesthouses, city hotels and spa facilities located on inhabited islands was also ordered.

These measures allowed authorities to contain the outbreak.

The restrictions are now being eased in phases, with the third phase measures now active. Borders have also reopened.

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