Maldives’ pursuit of tourism growth stumbles on delays in airport expansion

Investor confidence closely tied to completion of airport expansion

The Maldives’ arrivals target could be hampered by delays in the expansion of the Velana International Airport to accommodate 7.5 million passenger annually by 2022.

This year, the Maldives revised its arrivals target to 1.5 million from 1.4 million, after the destination saw a 36.3 per cent surge in arrivals in April from the same 2018 month.

The country is aiming for 2-2.5 million arrivals in 2022-2023, largely dependent on the completion of the airport expansion. The current airport can accommodate two to three million passengers annually.

Industry sentiment riding on the completion of Maldives’ airport expansion

“The airport expansion delays worry us, a lot of things are in the pipeline (because of the delays). A lot of airlines want to fly and increase the airlift from here but the delay is the issue,” said Thoyyib Mohamed, managing director of the Maldives Marketing and PR Corporation (MMPRC), the country’s main tourism promotion agency.

Describing the slow expansion of the airport, Mohamed Nihaj, general manager at Rahaa, a four-star, 100-villa resort due to open next month, pointed out that while the new runway is ready, other infrastructure like the relocated seaplane terminal and new terminal building are not ready yet.

“When this all is ready, there will be more flights. One of the problems now is that the airport cannot cope with the demand and planes have to sometimes circle the airport till the runway is clear for landing,” he said.

These developments are part of a US$800 million project to expand and upgrade the country’s main international airport. The project involves building a brand-new runway, a new passenger terminal and a seaplane terminal, as well as other support facilities.

While the new runway was completed in September 2018, it cannot be operated as the old seaplane terminal, near the same land, has to first be moved. The new passenger terminal will not be ready until 2022.

Speaking in February this year, the nation’s president Ibrahim Mohamed Solih, acknowledged concerns over the slow progress of the development vis-à-vis the rapid expansion of the tourism industry and room stock.

“Without the completion of a new terminal, the full potential of the new runway at the airport cannot be realised and more tourists cannot be brought in,” he said.

Echoing how investor confidence is entwined with the airport expansion,
Afrah Abdulla, reservations manager at Waldorp Astoria Maldives Ithaafushi – opening in July with 122 rooms – said: “Airport expansion will help enhance traffic and increase the number of first class and business class capacity, for which there is an (existing shortage).”

At least 162 new resorts – largely in the five-star category – have opened in 2016 to 2018, bringing the inventory up 7,152 beds to 43,770 in 2018. Another 20 resorts are opening or have opened this year, adding another 2,000 beds.

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