Siyam: USD 500 exchange impossible, it may destroy Maldives’ tourism

Exchanging USD 500 for each tourist that visit resorts is impossible, and forcing resort operators to comply with the requirement will destroy the Maldivian tourism industry, says Ahmed Siyam Mohamed, the president of the Maldives Development Alliance (MDA) and head of the resort chain Sun Siyam Resorts.

 The foreign exchange regulation that took effect on October 1 requires tourist establishments to exchange a fixed amount of USD per tourist in local banks. Resorts are required to exchange USD 500 per tourist while guesthouses are required to exchange USD 25 per tourist. The government is currently working on making this a law.

In an interview to ‘RaajjeTV’ that aired on Monday morning, Siyam said that exchanging USD 500 per tourist is an impossible task even for resorts.

He believes that forcing resorts to comply with the exchange requirement may destroy the tourism industry.

“Exchanging USD 500 per head is impossible. We can only do what is asked of us where it is possible. But if its mandatory then we will be forced to comply… It will only destroy my company, right?” he said.

Siyam, who operates five resorts in the Maldives, said that he pays all his staff in USD – something that he said benefits thousands of families.

He said that the USD exchange requirement will make this impossible.

“In the future, all these dollars that is going to the staff will need to be diverted to the office. This will adversely affect the people,” he said.

Siyam, who also serves as the parliamentary representative for the Meedhoo constituency, does not believe it right for the state to take legitimately earned USD revenue from business that pay taxes and fees to the government.

“Its this money that we earned legitimately? Why would you take this from us? This can only be described as robbery. You should not rob us like this,” he said.

Siyam said that his biggest resort, Siyam World, does not charge children in order to attract families.

He said that forcing a blanket USD exchange, including for children, will result in massive losses for the tourism industry.

“If the exchange is mandatory, it will result in massive losses to this industry. This may even destroy the industry. This cannot be implemented without amendments,” he said.

Resort operators 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.

But despite the criticism, President Dr. Mohamed Muizzu announced in a function on November 17 that he will not change the regulation, and that resorts will need to surrender USD 500 per tourist.

On November 26, the Maldives Monetary Authority (MMA) announced the formulation of a Foreign Currency Bill. This draft bill, which has been shared with tourist establishments for comment, maintains the USD 500 requirement for resorts, but also offers certain concessions in foreign currency exchange.

As per the draft bill, tourist establishments will not be required to exchange USD for tourists who spend less than 24 hours at the establishment, tourists under the age of two years, and tourists hosted by establishments on a complimentary basis.