The Government decides to sell stake in Shangri-La Villingili Resort
Following the pandemic, the resort remained closed and heavy costs were borne by the Maldives Government.
It’s not always sunshine and roses for resorts in the Maldives. Even as one of the most thriving tourist destinations known worldwide, the aftermath of the COVID-19 pandemic proved to be extremely hard on some of the resorts in the country. And even after two years following the pandemic, resorts are still trying to overcome the losses that occurred during this period. The impact is worse, for those properties that were operating in more challenging conditions even before the pandemic, such as the Shangri-la Resort at Villingili in Addu Atoll.
When pandemics or natural disasters hit, it does not matter the brand or the luxury, losses are hard to overcome. And this is precisely what Shangri-La Villingili Resort and Spa located in the southern most Addu Atoll is currently facing.
The resort which opened up in 2009, was developed in Addu Atoll as a joint-venture between the Government of Maldives and Shangri-La Group – one of the largest hotel companies in Hong Kong that have well-known hotels and resorts all over the world.
Tourism in Addu Atoll has been non-existence and under-developed for the most part of last 50 years. As there has always been political pressure from the people to Addu Atoll, to have tourism investments in the atoll, Maldives Government had decided to have a 30 percent stake in the Villingili Resort.
Trouble started for the resort, just like most in the tourism industry, when the COVID-19 pandemic hit the world forcing the closure of borders and bringing a halt to travel all around the globe. Just like a lot of businesses, Shangri-La Villingili Resort and Spa was hit hard, being forced to close down in 2020 as they were unable to carry out their operations any longer.
And while it is a major step back for the brand, it was also a step back for the citizens of the Atoll as hundreds of people lost their jobs amidst a pandemic due to the resort’s inability to continue their operations. As Addu Atoll now holds a handful of resorts, Shangri-La Villingili Resort and Spa was one of the more well-known ones and the closure of the resort was also seen as a major step back for the development of tourism in the area.
Just like all the businesses had lay-offs and even closed down during the pandemic due to the situation that was created globally, everyone expected Shangri-La Villingili Resort and Spa to open back up after the economy finally started recovering. However, the resort remains closed and heavy costs were borne by the Maldivian Government as they had to pay USD 68 million for the loans that were taken and as the resort was non-operational since 2020.
“The company has been running at a loss in the past. When you look at the government's share, it is negative. If we release the stakes, we have to pay USD 70 million. The company's financial statements have been submitted to the government,"
After attempting to get the resort to re-open and be operational since its closure, the Government has finally decided to cut their losses, hiring a US-based consulting firm the CBR Group to sell the resort.
The Tourism Minister Mausoom has said that the government has done the best it can, with reducing the lease rent of the resort as well.
