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Panel situation review: Tourism in Seychelles

BY JUERGEN T STEINMETZ, ETN

Tourism in Seychelles was discussed with the press as part of a review of the region’s tourism industry.

Alain St.Ange, the Seychelles Minister responsible for Tourism and Culture, took part in a conference call discussion panel as part of this review of the region’s tourism Industry.

The Seychelles Minister emphasized in the panel discussion that Seychelles remains a tourism destination known for offering personalized tourism. “This is because we are not after the millions in tourism arrivals, but more because we remain a niche tourism destination and one conscious that we are a destination of choice because we are not a mass market destination,” Minister Alain St.Ange said.

The discussions started with the topic of Dubai hotels that are today barely able to break even as occupancy levels plummeted to 50.3 percent.

A tourism expert on the discussion panel said that the Dubai hotel market saw their occupancy levels fall to 50.3 percent in July as overall demand within the city reduced due to the summer heat and because of the impact of Ramadan, according to the latest HotStats survey of full-service four- and five-star hotels by TRI Consulting.

It was already widely reported that occupancy in Dubai hotels was down 4.6 percentage points compared to the same period last year and their gross operating profit per available room (GOPPAR) plummeted by 99.5 percent to US$0.07, resulting in hotels barely covering operational expenses.

“Dubai hotels were impacted from the collective effect of the annual summer slowdown and the occurrence of the holy month of Ramadan throughout the entire month of July, resulting in occupancy levels falling to 50.3 percent. This had a trickledown effect on the profitability of hotels especially with significantly lower food and beverage revenues during the month. Hotels only marginally broke even as high fixed operating costs resulted in GOPPAR dropping to US$0.07. Although performance was down in July, the overall market remains strong with year-to-date occupancy levels averaging 79.4 percent and profit margins at 46.4 percent,” commented a panelist who quoted Peter Goddard, the Managing Director of TRI Consulting in Dubai.

When the Seychelles Minister was questioned on the August updated visitor statistics that is showing a 1% drop over the same period as 2013, Minister St.Ange said that Seychelles remained a long-haul tourism destination vulnerable to the economic situation of its main source markets. “When France, for example, sneezes, we immediately catch a bad cold. Our Tourism Board diversified our country’s tourism markets when it was evident that Europe was undergoing a difficult economic moment. Europe remains our biggest source market, and today all the islands of the Indian Ocean region are following the same trend in stagnant figures out of Europe or even recording a slight drop in numbers. The only exception for Seychelles is Germany which has remained a solid source market with German holidaymakers choosing Seychelles over other destinations,” the Seychelles Minister responsible for Tourism and Culture said.

The Seychelles Minister took time to discuss forward statistics available to the Seychelles Tourism Board based on one-to-one discussions with main tour operators and booking engine operators and said that he remained satisfied that the Seychelles Tourism Board, the body mandated to market the Seychelles, was doing a good job. The Minister emphasized that he believed that the success of Seychelles rested on a working public/private sector partnership in the marketing of the islands. “We have a Tourism Board of Directors controlled by the private sector where they hold four board members versus three government officials. We did this to allow the private sector, those sitting in the frontline of our tourism industry, to guide our marketing. They need the industry to work, and they are proactive with ideas, because they depend on a buoyant industry for the survival of their own businesses. We even appointed as our Director of Marketing the professional they, the private sector, nominated, because we wanted them to have their very own person in the chair working with them for the marketing of Seychelles,” Minister St.Ange said.

“The Seychelles Tourism Board organizes an annual marketing meeting where all the islands’ representatives in their overseas offices join their marketing team in Seychelles to sit with the private sector and airlines to plan the work ahead. Their plan of action is then further analyzed in their mid-year marketing meeting where they review together again trends, challenges, and successes,” Minister St.Ange said. “The Department of Tourism in the Ministry of Tourism and Culture on the other end only look at policy matters, and as a government department falls under the Minister’s Office, but the Tourism Board falls under their private-sector-controlled Board of Directors in what is seen as a perfect separation of responsibilities approach,” the Minister added.

The Seychelles Minister tabled for discussion forward booking figures compiled by the CEO of the island’s Tourism Board based on her one-to-one discussions with tour operators and booking engine operators who are big suppliers for Seychelles. Minister St.Ange said that for the period September to December, France and Italy would remain at -11% respectively when compared to 2013, whereas from Germany an increase of +19 is being expected. South Africa would see a +2, Austria a +38, Russia a +26, Hong Kong a +100, the UAE a +1.5, and La Reunion a +100% over the same period as 2013.

Comparative forward trends for the Indian Ocean region compiled through information from suppliers were tabled for forward booking September to December and Mauritius is seen to be recording a no growth from France but a minus 16% from Italy; Maldives on its part is showing a -4 from France and a -15 from Italy, and Zanzibar is showing a -19 from France and a -17 from Italy.

Air Access was also discussed and the challenges of the destinations analyzed. “At our peak periods, when we should be full, we cannot get booking from our main source markets because the airlines serving Seychelles through the two Middle East hubs are running on a very high load factor. We have the hotel rooms, but cannot get the passengers to Seychelles,” Minister St.Ange said.

Mauritius and Maldives are benefiting from a direct flight to China which has opened that market for them whereas Seychelles is seen to be stagnating in opening China as a source market, because air access is only available through the Middle East hubs.

Minister St.Ange spoke about the importance of direct non-stop flights working alongside the hubs and cited the successful CONDOR weekly flight as an example where the destination benefits directly at the same time. The Minister was questioned about the business case for more flights to Seychelles when airlines serving the destination were today averaging but a 60% average load factor, and in reply the Minister said that if that analysis is an applicable golden rule, then Seychelles should not be building any more hotels, resorts, or self-catering apartments, because the average annual occupancy level of the islands is no greater to what the airlines were recording as load factor. “But we are still receptive to building new hotels. We need the FDI, we need a solid updated hospitality network, and we need a comprehensive air access network to support the hospitality network,” Minister St.Ange said. “Tourism is the pillar of the Seychelles economy. Visitor arrival numbers are today sitting at 3 times the total population of Seychelles and at over 5 times the working population of the islands. Tourism accounts for 25% of GDP, 25% of employment, and 70% of foreign exchange earnings. Tourism is important, and tourism in Seychelles is 100% for Seychelles,” Minister St.Ange pointed out.

The Seychelles Tourism Board has Ambassador Barry Faure (Secretary of State at the Ministry of Foreign Affairs) as Chairman, and as board members Captain David Savy (Airline Consultant and Chairman of the Seychelles Civil Aviation Authority), Steve Fanny (PS at the Ministry of Finance and Industries), Brijesh Jivan representing the Seychelles Chamber of Commerce and Industries (SCCI), Alan Mason (head of Mason’s Travel and the Mason’s Group of Hotels) representing the Seychelles Hospitality & Tourism Association (SHTA), Paul Hodoul (a car hire operator and owner of a small homegrown hotel establishment) representing the Seychelles Hospitality & Tourism Association (SHTA), and Philippe Guitton (the Group General Manager of the Constance Hotels Ephelia and Lemuria) representing the Seychelles Hospitality & Tourism Association (SHTA) until his working contract in Seychelles ended recently (a replacement for Mr. Guitton is expected to be named soon).

Sherin Naiken, the CEO of the Tourism Board, sits as an ex-officio member, and Jenifer Sinon is the Board Secretary.

Seychelles President James Michel and Alain St.Ange, his Minister of Tourism & Culture
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