ECO Tourism Development Projects

NORTH – MALE’ ATOLL MEGA REEF Luxury ECO Tourism Development Projects

Project Information Pack Directors’ Version

Latitude: 4°41’19.96”N Longitude: 73°31’17.60″E

Capital City, Male’ and Maldives main International Airport

CONTENTS

PROJECT TITLE
PROJECT OBJECTIVES
EXECUTIVE SUMMARY
COMPANY PROFILE IMPLEMENTING AGENCY
START DATE / END DATE

FINANCE PLAN

– PROJECT COST & FUNDING MODALITY
– DETAILS OF THE CAPITAL COST OF THE PROJECT
ANALYZED BETWEEN HARD COST & SOFT COST
– DETAILS OF ESTIMATED PROFIT AND LOSS STATEMENT
– INVESTMENT SUMMARY

HUMAN RESOURCE PLAN

– STAFFING POLICY
– STAFFING RETENTION POLICIES AND PROGRAM – STAFF BENEFITS
– TRAINING AND DEVELOPMENT

CORPORATE SOCIAL RESPONSIBILITY MARKETING PLAN

– MALDIVES TOURISM OVERVIEW – COMPETITION ANALYSIS
– POWER OF BUYERS
– POWER OF SUPPLIERS

– THREAT OF SUBSTITUTION
– THREAT OF NEW ENTRANTS

CONCEPT DRAWING
LOCATION / GEOGRAPHIC COVERAGE

PROJECT TITLE

Development of four luxury resorts and a Yacht Marina with a water park on the Maavaru Lagoon, North Male Atoll

PROJECT OBJECTIVES

The project is formulated in line with key government policies and strategies to form the key objectives. Therefore, the project will contribute to achieving the following measures taken by the government, including;

a) Contribute to Ensuring Employment opportunities in the community through the establishment. This project will also ensure that the people of nearby islands are provided employment opportunities as well as increase their economic well-being
b) Implement the project in such a way that will contribute towards achieving development and economic growth in North Male Atoll

Maavaru Lagoon, located in north of Male’ Atoll, (Latitude: 4°41’19.96”N Longitude: 73°31’17.60”E), an area of 344 hectares stretch in length of 9km. Three luxury class individual islands are being reclaimed on the lagoon, 8 hectare each as separate resort island hotels.

Good Catch Pvt Ltd owned Maavaru Lagoon being located in central Maldives (Male’ Atoll) near Male’ International airport, is believed to be one of the best locations in the Maldives to invest in luxury tourism developments.

The design and location of the islands allow to develop 110 water villas and on-land beach front AND on lagoon (combined) positioned at 5 to 7-star category.

The location..

The formula behind the success of world’s top hospitality brands, that are established in the Maldives, consist of few key stones. The travel logistics inside Maldives, hence the precise location of the development / property, that surrounds a naturally rich marine life.

Good Catch Maavaru Lagoon is logistics-wise located at one of the best locations in the Maldives (approximately one our from Main international airport by speed boat) and where marine life richness is concerned, it is right next to B.Atoll (UNESCO Biosphere Reserve http://www.unesco.org/new/en/natural-sciences/environment/ecological- sciences/biosphere-reserves/asia-and-the-pacific/maldives/baa-atoll)

IMPLEMENTING AGENCY

Logistics – Seaero Pvt Ltd
Tour operators – Travellers Maldives Pvt Ltd.

 Building and Construction –

START DATE/ END DATE

The overall project is proposed for a period of 50 years; however, the construction period of the project is estimated to last 24 months. Upon confirmation of the project, necessary approvals from the Government agencies will be initially sought. The Environmental Impact Assessment has already been prepared and approved on 3rd June 2018 and environmental clearance has been obtained from the Environmental Protection Agency. Therefore, the project is expected to start around January 2018 and construction is expected to be completed by January 2021.

FINANCE PLAN

PROJECT AND FUNDING MODALITY

The total project cost estimate is USD 353,250,000 (Three hundred and fifty Million Two Hundred and Fifty Thousand US Dollars). The total project will be financed by the investor with 33.33% own financing (equity) and 66.67% bank loan, which will be taken for a period of 10 years at 7% interest.

Hence the financing requirement of the project will be met in the following manner; 33.33% Equity – USD 117,738,225
66.67% Loan – USD 235,511,775 Total – USD 353,250,000

DETAILS OF THE CAPITAL COST OF THE PROJECT ANALYZED BETWEEN HARD COST & SOFT COST

DETAIL OF ESTIMATED PROFIT AND LOSS STATEMENT Estimated profit and loss for One Island of 60 rooms

Estimated profit and loss for One Island of 120 rooms

GOOD CATCH PVT LTD, Maldives – Maavaru Lagoon Tourism Development Summary

Estimated profit and loss for Total project (4 islands and 420 rooms)

Page 12 of 31

INVESTMENT SUMMARY

HUMAN RESOURCE PLAN

STAFFING POLICY

Maavaru Lagoon recruitment and selection of staff will be in accordance with the Employment Rules and Regulations of the Maldives and the Tourism Regulations. In order to maintain the highest level of integrity regarding all aspects of recruitment Maavaru Lagoon will adopt a zero tolerance policy in matters such as bribes, kickbacks and falsification. The Human resource Department will oversee all the job applications throughout the process of staff recruitment. The staffs recruited to jobs in Maavaru Lagoon will be selected through a process of interviews and selected individuals will be notified by the Company. Job descriptions will be handed over to all the successful individuals before they join as a staff of the resort.

Pre operational recruiting

During the construction phase, the Human Resource Director will start recruiting his team which would include positions such as Executive Chef, Executive House Keeper, and Director of F&B, Human resource Managers, Sales and Chief Engineers. Twelve months prior to the opening of the resort, a residential Doctor will be appointed hence completing the pre-operational Management team. The Finance Director, Managers and sales Coordinator will be hired 6 (six) months prior to opening of the resort.

Operational Period
Recruitment Policies and Procedures
While in the operational phase, required job vacancies will be advertised in the local and international (neighboring) newspapers.
Positions such as supervisory jobs of Maavaru Lagoon can we filled by recruiting GCE A level graduates. Each year the number of “A” level graduates increases and acts as an advantage for Companies that want to recruit those graduates. However, this will be highly dependent on the availability of such personnel in adequate numbers, who are willing to work away from home in Maavaru Lagoon. Priority will be given to those graduates and locals who are from the nearby islands. Challenges such as unavailability of locals will leave no choice for Maavaru Lagoon, but to

recruit expatriate labor to certain jobs. Project will ensure 80 percent of the employees are Maldivians.

Stakeholders that need to be satisfied

Company.
Government Agencies
Environmental Lobbies
Regional Community
Customer
Social Conscious of the Nation

Needs/ Objective of the Stakeholders

Company

To gain maximum profit from the resource invested
To have the potential for future growth
To gain competitive advantage/ and sustainability.
Customer retention.

Environmental Lobbies

Preservation of the bio diversity of the region
Un interruption of the fragile ecosystem of the region.
Use of renewable resources (sustainable)

Social conscious of the Nation

Doing something for our own environment
Acquiring the Goodwill of foreign Nationals
Being Proud and Independent as a Nation
Being empowered in a Global competitive market.
RNR POWER OF SUPPLIERS

MAAVARU LAGOON islands will have distinctive brand image. Only very few resorts stands out as unique brands offering a distinctive character. Majority of the resorts fall under the umbrella of the brand, “Maldives”, which has a very narrow identity in itself. Supplier power therefore is very limited. The distribution channels are very homogenous catering for very limited market segments, i.e. high reliance on Western European Markets. New entrances from big hotel chains are encouraging the extinction of any unique character, by providing a standardized product offering globally.

RNS THREAT OF SUBSTITUTION

As the players within the industry has little or no distinctive identity, and are therefore more prone to competition from other geographical destinations, e.g. Caribbean, Indonesia and more recently the South Pacific. Due to high reliance on price as the only major differentiating factor in the resort island tourism the substitution effect is far greater. This was evident after September 11th as tourist found it easy to find alternative destinations offering similar product offerings. Maldives image of exclusivity is in danger as products get cheaper and people started realizing through increase media attention there is very little distinction between alternative resort island destinations. This has caused a decline in repeat purchase, as people are increasingly looking for novelty experiences.

RNT THREAT OF NEW ENTRANTS

There is an increase in foreign chains entering the industry, with the advantage of economies of scale. The playing field is therefore uneven in respect to small Maldivian firms, who are unable to gain such advantages. The only limitation and barrier to entrance is the level of initial investment and the extensive overheads that has to incur, to be able to compete in the tourist industry

Consumer needs

Quality experience
A sense of Customer empowerment (through involvement in the
social wellbeing of the region)

Regional Communities:

Gain economic independence –
Preservation of Culture/ Tradition and Heritage of the region
Community pride in the region

Government needs

1. Sustainable tourism industry

Utilizing and Developing regional resources
Resources allocation and development, regionally and Nationally

Staffing and Staff Distribution

The beginning of the operation, Maavaru Lagoon will have total staff strength of 520 (Five hundred and twenty). The core management team during operational phase will consist of the General Manager, directors of Front Office, F&B, Human Resources, Sales and Finance, Chief Engineer, Executive Housekeeper and Executive Chef.

Maavaru Lagoon regards staff orientation programs as an absolute requirement for the development of employee performance and also for the formation of positive attitude towards their work and the environment. Within 10 days of appointment, all employees will receive an orientation with respect to their duties, work environment, and terms and conditions of employment. They will also receive detailed duties of their position and mandates of their respective Department. Furthermore, they will also be given detailed information on their rights, responsibilities and opportunities for career development.

Employment Contract

Staff will be given the opportunity to enter into an initial employment contract of 5 (five) years for top managerial staff and 3 (three) years for middle management and line staff, renewable for the next 5 (five) years depending on their performance appraisal and service records.

Staff Meetings

Maavaru Lagoon will institutionalize a process whereby regular staff meetings will be held. These meetings will be aimed to provide the employers to communicate Resorts rules, regulations, policies, objectives and procedures and other matters related to staff welfare in an interactive manner. These meetings will also be used as a medium to get feedbacks from the staff regarding the challenges in the workplace and working standards. This will both improve their efficiency and increase morale and the job satisfaction, all of our factors that influence staff retention. Department Heads, Managers and Supervisors will be given autonomy to take necessary measures within the guidelines of their supervisors to manage and improve the quality of the service provided by their department. Main purpose of such flexibility is to ensure loyalty of the key personnel to the Resort. General Meetings will also be held to improve staff

relationships as well as boost communication among general staffs and their supervisors.

In addition to preceding measures, Maavaru Lagoon will also offer incentives and benefits to the staffs aiming to retain them such as:

 High salaries
 Multitude of paid leaves
 Loan facilities for staff
 Provident fund
 Extensive medical coverage
 Health and accidents insurance scheme
 Travel expenses Staff recreational facilities and;
 Recognition awards
Maavaru Lagoon will offer competitive salaries to attract and retain qualified and experienced personnel.
Salary increase
The salary of staff who qualifies in an annual performance appraisal would be granted a salary increase of 5% per annum, adjusted to inflation. The Performance Appraisal will be carried out by the respective Head of each of the Department in consultation with the HR Manager.
Paid Leave
Maavaru Lagoon will offer to its staff all rights and privileges specified in the Employment Regulations of the Maldives. In accordance to the Regulation the following leaves will be eligible for the staffs of Maavaru Lagoon
Annual Leave
All employees working in Maavaru Lagoon will be granted 30 (thirty) days of paid leave annually.
Emergency Leave
This leave will be granted under special circumstances and when applied by a Doctors certificate.
Compassionate leave
There will be provision in the resorts’ Human Resource regulations for its staff to get a maximum of two days paid leave in those unfortunate cases of serious illness or death of an immediate family member.

No pay leave

Leave without pay will be granted to employees for medical reasons in circumstances where their paid sick leave have exhausted and / or for serious personal reasons.

Rest and Recuperation

All the employees of MAAVARU LAGOON be granted 4 (four) days off monthly. These leaves off days cannot be accumulated and should be used as they occur.

Personal Injury Coverage

MAAVARU LAGOON will purchase an insurance package to cover against personnel injury of staff of the resort for a total of US$ 0.5 million.

Medical Coverage

All the employees of MAAVARU LAGOON will get medical coverage for accidents, emergencies and hospitalization through the medical coverage. A residential full time Doctor will be present at all times in the premises of the Resort. In case a staff requires further treatment that is unavailable, he/she will be taken to Male’

TRAINING AND DEVELOPMENT

Training Objectives

The policy of MAAVARU LAGOON will focus on short and long term training programs for its employees. The short term training programs will emphasize on providing immediate training to bring the skill level of the new recruits to the standards set by the Resort. However, long term trainings will be based on the training requirements identified by the Human Resource Department.

Corporate Social Responsibility

Build recreational parks for children in islands allocated by the government.
Construct recreational centers for Youths
Construct futsal grounds in islands allocated by the
government.

MARKETING PLAN

Maldives as a country consists of approximately 1200 island, with hundreds of independent resort developments catering solely for the purpose of Tourism. Initially most of the resorts were developed in island near proximity to the airport. However, with the expansion and improvement of transport infrastructure resorts were developed all around the country.

2.1 POWER OF BUYERS

Bargaining power of the consumer is increased, due to the increasing number of similar choices available. Due to the homogenous nature of the product offered in the Maldivian tourism Industry, i.e. the sun sand and sea periphery, there is little to distinct one resort from another.

With consumers having increased access to information from various different medias, they have more power in the decision making process. Consumers are also becoming more involved in the purchasing decision, and motivated to search for information before making the final choice.

After September 11th the tourist industry in the Maldives and rest of the resort destinations globally, became very cautious and reduced their rates to increase and stabilize volume. Such tactics has made the consumers more “price sensitive”, and more prone to seeing price as the differentiating factor within the industry. Maldives tourism is very young and still in the initial growth stage, meaning many of the players in the industry are still concentrating on volume and quantity, on the expense of quality and character. Resorts are pressured to fill their beds, to cover the large initial investment and overheads incurred. This is one of the reasons for the continued reliance on economies of scale and concentration on volume.

APPROVED LAGOON DEVELOPMENT PLAN

LOCATION/GEOGRAPHIC SIGNIFICANCE