Over 50 Maldives resorts urge MMA to revise forex rules
The letters further highlight potential impacts on staff, noting that mandatory dollar conversion may necessitate changes to employee wages.
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More than 50 resorts in the Maldives have formally expressed opposition to a new Maldives Monetary Authority (MMA) rule that requires tourism businesses like resorts to exchange $500 per tourist.
The resort operators argue that the policy could impose severe financial and operational challenges on the industry.
Since yesterday, heads of the largest number of resort operators in the Maldives have signed and submitted a separate letter addressed to the MMA Governor Ahmed Munawar. According to information obtained by Atoll Times, 52 resorts have already sent individual letters to the MMA, emphasising their collective concerns over the new regulation.
The letters highlight a series of concerns regarding the rule:
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Imposing a uniform $500 exchange per tourist disregards variations in guest spending, which resorts contend will lead to financial difficulties. This requirement may exceed the actual dollar revenue generated by some resorts, especially those with differing guest profiles and spending capacities.
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The rule mandates that all resorts convert foreign currency at a fixed rate, overlooking differences in room rates and average daily rates (ADRs) across varying classes of resorts. Resort operators argue that this approach could result in financial losses, particularly impacting mid-range and budget resorts.
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The requirement does not account for visitors who do not incur charges, such as children on complimentary packages or other promotional stays. However, the rule currently requires even such guests to contribute to the dollar deposit at the MMA.
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Resorts depend heavily on foreign currency for operations, particularly for managing loans and international transactions. Many resort projects are financed by foreign loans, requiring transactions to be made in dollars, a currency not readily available through the Maldivian banking system.
The letters further highlight potential impacts on staff, noting that mandatory dollar conversion may necessitate changes to employee wages and benefits. Specifically, the rule could complicate the payment of service charges and salaries that are traditionally issued in dollars.
Additionally, three companies owned by Champa Mohamed Moosa, a prominent business figure in the Maldives, have joined the appeal, submitting a letter to the MMA on Tuesday. Mohamed Moosa companies called the rule impractical and have requested the government to reconsider its implementation. They propose that any new regulations should address foreign exchange challenges in a sustainable manner.
