Vital role of Velana International Airport in developing Maldives’ tourism

In his presentation at the Hotelier Maldives GM Forum 2024, Mohamed Mihad, Chief Commercial Officer at Maldives Airports Company Limited (MACL), highlighted the critical role of Velana International Airport (VIA) in supporting and driving tourism in the Maldives. His speech, titled “Velana International Airport (VIA) and Tourism Development,” provided valuable insights into how the airport’s infrastructure and operations are closely intertwined with the growth and development of the tourism sector, and how future collaborations between the two sectors can enhance the Maldives’ position as a global tourist destination.

Mihad began by reflecting on the historical developments of VIA, providing a timeline of the airport’s growth alongside the evolution of tourism in the Maldives. He recalled the establishment of the first runway in 1964 and the arrival of the first tourist in 1972, marking the beginning of a new era for the Maldives. The construction of the first significant runway in 1976 enabled the Maldives to cater to growing international demand, a trend that has continued in tandem with the development of tourism.

The Maldives has seen substantial infrastructure development at VIA over the years, particularly since the 2008 introduction of a master plan, which laid out the foundations for ongoing airport expansions. This includes the development of a new terminal, which is set to accommodate increasing passenger volumes and cater to the modern needs of the tourism industry.

Mihad emphasised that the growth of VIA is directly related to the demands and shifts in the tourism industry. “The airport was built to cater to the tourism sector,” he explained, illustrating how every major development at the airport has been in response to the growth and changes in tourism. For instance, as tourism demand increased, VIA adapted with new infrastructure to meet these demands, ensuring that the airport could handle higher passenger volumes and the evolving needs of international travellers.

One of the key challenges discussed by Mihad was the balancing act between managing airport revenue streams and maintaining competitive pricing for travellers. VIA generates revenue through both aeronautical (airlines and flight operations) and non-aeronautical activities (retail, duty-free, and food and beverage outlets). However, increasing fees for airlines can lead to higher ticket prices, which could negatively impact the price-sensitive tourism industry in the Maldives. He highlighted the need for a creative approach to increase non-aeronautical revenue, improving passenger spending while keeping flight costs reasonable.

VIA’s operations are notably different from many other airports around the world, largely due to the unique geography and tourism patterns of the Maldives. Upon arrival, travellers to the Maldives do not simply take a taxi to their destination. Instead, a large proportion of passengers—around 40%—take speedboats to their resorts, while others transfer to seaplanes or domestic flights to reach more remote locations. The Maldives boasts the largest seaplane operation in the world, an integral part of its tourism infrastructure.

Mihad pointed out that 65% of VIA’s traffic occurs within a six-hour window during daylight hours, as seaplanes cannot operate at night. This concentrated flight schedule poses operational challenges, requiring the airport to handle large volumes of passengers and aircraft in short time frames. These dynamics drive up infrastructure costs and complicate operational efficiency, leading to higher overall costs for airlines and tourists alike.

Mihad highlighted the importance of maintaining a sustainable development strategy for VIA that aligns with the broader objectives of the tourism industry. One key area of focus is expanding and diversifying routes. The Maldives has long maintained an open skies policy, allowing airlines from any destination to operate freely within its airspace. However, Mihad raised concerns about the increasing dominance of a few Middle Eastern carriers, which account for 35% of VIA’s traffic. He urged industry leaders to consider the potential impact of monopolisation on airfares and tourist accessibility.

Collaboration between the airport and the tourism sector is crucial for future growth, Mihad argued. He called for joint efforts in developing new routes and markets, as well as attracting more airlines to the Maldives. He cited the example of Malaysian Airlines, which invested in promoting the Maldives as a destination to Australian travellers after launching a route to the islands. Such partnerships can bring valuable exposure and investment, benefiting both the airport and the tourism industry.

Mihad concluded by emphasising that VIA’s role extends beyond traditional airport operations. “We are not running an airport,” he said, “we are running a hotel where passengers happen to come by plane.” This shift in mindset reflects a commitment to elevating the passenger experience, ensuring that every visitor to the Maldives receives exceptional service from the moment they land. This service-oriented approach is essential for maintaining the Maldives’ reputation as a world-class destination.

This year’s GM Forum, now in its eighth edition, focused on ‘The Evolving Luxury Landscape’ in the Maldives. Industry leaders discussed the future of luxury travel, including the new luxury traveller’s psyche, digital marketing, and sustainable practices. The forum featured diverse panels and interactive sessions, emphasising personalised guest experiences and local cultural integration. It aimed to foster active participation and share innovative case studies from the luxury travel industry.

Sponsors and partners of GM Forum 2024, the largest gathering of hospitality leaders, include:

• Ooredoo Maldives: Digital Partner (Title Sponsor)
• Bestbuy Maldives (BBM): Silver Sponsor
• Dhivehi Insurance: Silver Sponsor
• Fuel Supplies Maldives: Silver Sponsor
• Maldives Airports Company Limited (MACL): Silver Sponsor
• Manta Air: Aviation Partner
• Male’ Aerated Water Company: Beverage Partner
• Atmosphere Wellness: Wellness Partner
• Souvenir Marine: Transport Partner
• Printlab: Printing Partner
• CROSSROADS Maldives: Venue Partner
• Lights Out: Coverage Partner
• Associate Sponsors: Alia Investments, Villa Hakatha, GAGE, Wyntronix, Uniforms Unlimited and Spa Ceylon Maldives