As 137 registered resorts set up paradise on Maldivian shores, experts in the industry conclude that Velana International Airport must be developed further in order to maintain occupancy rates of over 60 percent.
Already offering more than 42 800 beds, more and more resorts are cropping up across the Maldives.
With the number of resorts continually increasing, the empty beds left 'ghosted' in these multi-million dollar financed hotels, are proving to be quite the headache for investors.
According to observations made by a multiple resort-owning businessman in the Maldives,although the future remains bright for resort investments, as more resorts open, that the number of incoming tourists will increase only with a corresponding expansion of Velana International Airport (VIA).
"Even as more resorts open doors, we can only bring in more tourists after the airport has been further developed. Once it has been expanded, the number of visitors will also subsequently increase, followed by a demand for more resorts. Therefore, we must come to a decision about whether our immediate need is to build a better airport, or to build more resorts" he said.
Another prominent businessmen added that, the amount of incoming tourists has not increased with the rising bed capacity in the Maldives, citing the limitations of VIA as a primary reason.
Describing hoteliers in the Maldives as eagerly anticipating the completion of various airport development projects, he said, "The airport is currently operating at its maximum capacity. If the runway and terminal are not further developed, we will not be able to welcome more tourists. "
Although there was once a time when investments could be recovered in as early as 10 years, field experts currently report investment recovery periods to be between 20 - 25 years on average, adding that if bed occupancy rates do not inflate, it would be difficult to return investments in due time.
In a recent interview given to TT Asia, Suresh Dissanayake, assistant vice president of Sri Lankan-owned Adaaran Heritance Resorts, said that, problems caused by increasing numbers of luxury resorts was only temporary, insisting that once the airport was further developed, flights would increase and that resorts would resume working at full occupancy throughout the year.
Based on the number of beds in the Maldives, for the tourism industry to run at full capacity, more than two million tourists must find their way to the country.
As the runway development draws to a close next month, plans are underway to garner an annual 7 million tourists in the coming four years. Meanwhile, the government predicts the development of its new terminal to conclude within the following two years.
In 2017, the Airport Development Fee (ADF), a special bill ratified into last year’s budget in order to ease repayment of the costly on-loan developments accumulated 21.4 million dollars and generated a revenue of 45.8 million dollars as Airport Service Charge.
Funded with a loan of USD 400 million from China’s Exim Bank, VIA’s new runway is developed by Beijing Urban Construction Group (BUCG). The new runway measures 3,400 metres in length and 60 metres in width. Under the airport development and expansion project, a cargo terminal with a capacity of 120,000 tonnes and a fuel farm with a capacity of 45 million litres will also be established.
The estimated budget for the new terminal building, which would cater to over seven million passengers, is USD 350 million.
This year, Maldives Airports Company Limited (MACL) announced that the new terminal would be located north of the existing International terminal. Under the airport development master plan, once the new terminal is completed, the old one would be converted to part of the domestic terminal.