Canareef resort incurs over USD 21 million in losses, closes down operations

Canareef Resort Maldives.

Canareef, a tourist resort located in Herathera Island of Addu City, has made the decision to close its operations for two years in face of millions in losses.

An official from Canareef, who spoke to Sun on condition of anonymity, confirmed the decision this Saturday.

The official said the resort had been running at a loss for the past five years. He said the losses incurred by the resort amounted to over USD 21 million, and that the management had made the decision to close down the resort for two years in order to recuperate from the losses.

The official highlighted the low volume of flights and the lack of competitiveness in the market as some of the reasons which had contributed to the continued losses.

He said that the resort had been doing better at the beginning of this year, but the coronavirus pandemic which hit the world soon after served to exacerbate the financial situation of the resort, resulting in the management being left with no choice but to close its operations.

Canareef is at present being used as a transit quarantine facility.

Maldives, with its limited natural resources, is heavily dependent on tourism as a source of income. The coronavirus pandemic has hit the country’s economic hard, resulting in a rise in unemployment, a severe depletion of the State’s income sources - casting a shadow over previously positive economic forecasts.

Maldives identified its first coronavirus case on March 7, and declared a state of public health emergency over the pandemic four days later on March 11. It ceased the issuance of on-arrival visas and closed its borders on March 27.

While coronavirus cases had initially been restricted to resorts and safaris, and later quarantine facilities holding inbound travelers, Male’ City identified its first coronavirus case on April 15, prompting a city-wide lockdown and a nationwide ban on nonessential travel.

Maldives has 2,003 confirmed coronavirus cases, out of which 1,193 patients have recovered and eight have died from complications.

The country began easing its lockdown in late May, and has announced plans to reopen its borders to tourists in July.