- As the main countries of origin of tourist arrivals to Seychelles now risk recession, the archipelago's tourism industry demands the government to act. In particular, an announced 1 November increase in tourism related taxes are seen as damaging to the already expensive destination.
In mid-September, before the global finance crisis was a fact, Seychellois authorities printed a notice for tourism operators to announce that from 1 November, the Goods and Services Tax (GST) on receipts will increase from 7 to 10 percent. The tax increase was to have been implemented in 2006, but difficult economic conditions in the industry at that time caused authorities to delay the increase.
Now, the industry urges the government to rethink its September announcement, holding that prospects for the Seychellois tourism sector currently are bleak, given a foreseen recession in Europe and America. It would be a wrong signal to send, increasing the price level of the Seychellois destination at a time when tourists are expected to become more price conscious, the industry holds.
Alain St Ange of the Seychelles Hospitality and Tourism Association (SHTA) today notes that "Seychelles is dependant primarily on the success of its tourism industry," thus urging the government to assure better framework conditions. "Some of our competitors, we have seen, have been fast in issuing special packages to try to remain an attractive destination even in difficult times," Mr St Ange reminds local politicians.
The tourism association asks government not to implement the GST increase in times of crisis, and to address the soaring electricity prices in Seychelles, which have contributed to higher prices within the sector. "The electricity burden on every accommodation establishment is high and we are again appealing for a relook at the applicable rates being charged," Mr St Ange tells government.
Meanwhile, Seychellois stakeholders are trying to adapt to the new situation as best as they can. Air Seychelles have come up with some few advantageous airfares on some routes to attract more travellers. But most hotels, remaining the major cost factor for tourists in rather expensive Seychelles, claim they are not in a position to lower rates before framework conditions are improved by government. Stakeholders urge for a crisis package to address the situation.
The Tourism Association's CEO, Jenifer Sinon, says it should be enough to "let the figures do the talking" to understand that a crisis is in the coming. So far in 2008, tourist arrivals to Seychelles have increased by 1 percent compared to the same period last year. But a shift has been noted. During September, a decrease of 11 percent of visitors on holiday is noted compared to September 2007.
The fear is that Seychelles is about to lose its middle and upper middle class visitors as those are noting a tighter economy in their home countries - principally being France, Italy, Germany, the UK, South Africa and Russia, in that order.
Meanwhile, the richest segment of tourists visiting Seychelles - which is of importance - is not likely to change its Indian Ocean luxury holiday plans due to the crisis. And the archipelago can celebrate a recent prestigious visit, by nobody else than Senator Barack Obama and his wife Michelle. The prominent couple "took a break from their busy schedule" at Seychelles' isolated Fregate Island, according to the SHTA.
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