Champa Central Hotel closes down over fixed USD exchange requirement

Resort chain Crown and Champa Resorts closed down its Champa Central Hotel in Male’ City on Thursday, following the enforcement of new foreign exchange regulations that require a mandatory surrender of USD for each tourist.

The new regulations require ‘Category A’ tourist establishments - tourist resorts, integrated tourist resorts and resort hotels – to exchange USD from a local bank at the rate of USD 500 per tourist for all monthly arrivals before the 28th day of the third month following each respective month.

Meanwhile, ‘Category B’ tourist establishments – tourist guesthouses and hotels in residential islands with registered rooms of 50 or under - must exchange USD in the same manner, but at the rate of USD 25 per tourist.

Champa Central Hotel falls under ‘Category A.’

The Champa Central Hotel operates a transit hotel, with tourists usually staying one night. The room charge ranges from USD 50-60 per night.

 Under the new regulations, the Champa Central Hotel would need to exchange around USD 200,000 per month, which is more than its monthly revenue.

The Champa Central Hotel, which has been running for at least a decade, employs around 80 workers, 50 of them locals.

On Wednesday, the Maldives Monetary Authority (MMA) announced that 173 out of 174 resorts operating in the Maldives had registered for USD exchange by the October 30 deadline. However, many resort operators have expressed concern over the new requirements.

Tourism stakeholders argue that the fixed USD exchange requirement, regardless of room rate, duration of stay, the age of guests or special offers, is unfair to tourism establishments with varied market segments.

It also disregards the fact that many of the expenses are paid in USD.

Industry experts have warned that tourism establishments, especially guesthouses and lower-tier resorts, may face operational challenges complying with the regulations, resulting in detrimental impacts on the entire tourism industry.