The Crown and Champa Resorts group has closed the doors of Champa Central Hotel in Malé, citing unsustainable financial pressure from a new government-imposed foreign exchange regulation. The policy mandates that “Category A” tourism businesses, which include high-traffic transit hotels like Champa Central, exchange a fixed amount of USD 500 per tourist at local banks each month, regardless of individual room rates or length of stay.
As a transit hotel, Champa Central typically accommodates short-term guests with room rates ranging from USD 50-60 per night. With the new regulation, the hotel would be required to exchange nearly USD 200,000 monthly—an amount far exceeding its average monthly income. This financial burden has led the company to halt operations after a decade in business, leaving around 80 employees, most of them local, unemployed.
The Maldives Monetary Authority (MMA) recently announced that nearly all resorts had met the compliance registration deadline, but tourism stakeholders are voicing concerns. Many argue that the regulation unfairly impacts smaller or more budget-friendly establishments by imposing a one-size-fits-all exchange rate, disregarding differences in guest profiles, room rates, or operational budgets. Some industry experts warn that smaller guesthouses and budget hotels, already operating with narrower profit margins, could face severe financial strain under this policy.
Critics argue that while the regulation aims to stabilize the local USD supply, it could unintentionally lead to closures among small-scale tourism operators, creating challenges in maintaining diversity in the tourism industry. The broader impact on Maldivian tourism remains uncertain, with operators calling for policy revisions to consider the financial health of all tourism sectors.
