Universal Enterprises has also announced that they will not comply with the changes brought to the foreign currency regulation by the Maldives Monetary Authority (MMA).
The newly introduced forex regulation targets tourist facilities in the Maldives, requiring them to keep dollars received in an account as specified by MMA, and mandating the conversion of USD 500 for each arriving tourist in resorts.
Universal Enterprises notified MMA of this on November 14.
This comes at a time Champa Resorts, the most famous brand in the Maldivian tourism sector, had also informed MMA that they cannot comply with the new regulation.
Mohamed Umar Manik, Chairman of Universal Enterprises signed the letter sent to the central bank’s governor Ahmed Munawar which highlighted that the resorts operated by Universal Enterprises cannot comply with the regulation.
The letter addressed by Universal reads that when formulating the regulation requiring USD 500 to be converted for each guest, this amount was set without considering necessary factors, suggesting that the decision was poorly considered.
The letter also stressed that this was not fair for resorts operating in different market segments, and that the decision was not made considering the fundamental principles of resort operations.
Stressing that 90 percent of a resort's expenses are in U.S. dollars including several operating supplies, spare parts procurement, fuel purchases, staff salaries, marketing expenses, online operator and credit card commission-related expenses, management fees, financing costs and debt repayment, rent, TGST and Green Tax payments, Universal claimed that it was absolutely not possible for a resort that receives a total of USD 1,000 from a family of four staying four nights at a rate of USD 250 to convert USD 2,000 to Maldivian rufiyaa.
Universal has asserted that this regulation has been formulated based on a misunderstanding about the amount of U.S. dollars the country receives.
The letter goes on to note that as a group, Universal has always maintained all accounts in the Maldives, and with recent changes to tax regulations, Universal has been paying all taxes to Maldives Inland Revenue Authority (MIRA) in U.S. dollars.
It also mentioned that the total tax amount is estimated to be over 30 percent of a resort’s total revenue.
Mohamed Umar Manik stressed that they cannot comply with the condition of converting USD 500 for each tourist.
The letter also expresses belief that implementing this regulation will force decisions that could harm the industry.
The company has urged the government to reconsider the policy and develop a system that is appropriate and practically feasible for all market segments.
In conclusion, the group added that as an industry, they are ready to assist in achieving the government's objectives, but any policy should be formulated considering the reality of how the industry operates, and in a sustainable manner that does not cause significant damage to the country's economy.
