USD 400 yearly via 10 resorts not possible: Faisal

Former Vice President Faisal Naseem has stated that his calculations did not determine the feasibility of giving USD 400 every year to all Maldivian citizens from the profits of 10 resorts which would be developed within the next three years by a government company.

While giving this year's Presidential Address at Parliament, President Muizzu said that a government company is set to develop 10 islands into resorts within the next three years, with USD 400 to be given to all Maldivian citizens each year from the resorts profits.

President Muizzu said that after the resorts finish development, yearly deposits of at least USD 400 will be made to each citizen's account from 2030 onward. 

"When taking a look at the calculations, at least USD 400 will be deposited yearly into the accounts of citizens. Take a family of five as an example, where each member will be a shareholder of 10 resorts at the minimum, with the family receiving at least USD 2,000," said the President during his Presidential Address.

However, former Vice President Faisal Naseem, who has years of experience in the tourism industry, drew up the calculations himself and said that Maldives' population will be higher than 500,000 by 2030, and that because of that his calculations do not show that 10 resorts would have the capability to generate USD 200 million in order to deposit USD 400 into the accounts of Maldivian citizens. 

As per Faisal, an investment of around USD 80 million is needed to construct a five-star 150-room resort near Male' when taking into consideration the Dollar rates, the price of goods and construction expenses.

"We are talking about putting together USD 800 million to construct 10 resorts, when we cannot even get the necessary funding for social housing. The government did not take the acquisition of funds into consideration when they thought of building a five-star resort," said Faisal via a Facebook post.

One of the things Faisal questioned was whether a room can be sold daily at USD 500 on average within the competitive sphere of the tourism industry and the economic challenges that are plaguing the world currently.

While referring to the calculations, Faisal said that at a rate of USD 500 and 65 percent occupancy, the "room revenue" will only reach between USD 17 to USD 20 million at the most.

"Do you know how much would be left after taxes, salaries and other expenses are paid in running a resort? A five-star resort can barely hold on while maintaining a 50 percent occupancy throughout the year," said Faisal.

"And what about the loan payments? This alone would require eight years at the very least."

There are no further details regarding the resort development plan via the government, other than the details that were shared during the Presidential Address. 

During the Presidential Address, President Muizzu said that even as Maldives' tourism sector had reached 50 years, there still is no path where Maldivians can directly benefit from it.

As one of the most important industries in Maldives is the tourism sector, President Muizzu said that private companies are running resorts by renting natural assets for long stretches of time. However, President Muizzu said that Maldives are supposed to get direct benefits from the resort business.