Saint Ange Tourism Report – 18th June 2018

Victoria, Mahe (Seychelles) – June 20, 2018 (travelindex.com) – Today is the 18th of June and the celebrations of our Constitution Day. It is a day that each and every Seychellois should use for reflecting on where we have come from to better appreciate where we are today. It is also a good day to plan the way forward based on a vision that suits you as a Seychellois. By planning for you and your family first, you will be planning for a Seychelles that will be your country. The recent discussions and talks on the Constitution were a good move, as understanding one’s constitution is essential. It demonstrates that we have rights, but that my rights cannot infringe on your rights as a Seychellois. This is key to understanding we are all equal with three branches of Government (Executive, Legislative and the Judiciary) working independently from each other for the good of every Seychellois. Happy Constitution Day to everyone.

President Danny Faure of Seychelles at G7 in Charlevoix in Canada

President Danny Faure was one of the Heads of State who were invited to Canada at the time the G7 were meeting in Charlevoix. When planning this meeting The Rt. Hon. Justin Trudeau, Prime Minister of Canada said:- “Our oceans and coasts are under considerable threat – from increases in plastic pollution, more frequent and severe weather events, and illegal, unreported and unregulated fishing. Resilient coastal communities and healthy oceans are vital to growing economies that work for everyone and that is why we are committed to working with others to protect the world’s oceans.” Seychelles has already, 15 percent of Seychelles’ 1.4 million-square-kilometre exclusive economic zone (EEZ), some 200,000 square kilometres listed as protected zones.

Vertical Integration Policy coming to Seychelles?

A lot of discussion has been taking place in the tourism industry on the announced Vertical Integration Policy that is meant to be implemented soon. The big question is whether this policy will touch foreign businesses or just Seychellois ones. The Seychelles Constitution provides for the Right to Work and it is debatable if this comes with caveats to stop expansion and growth in only one industry, whilst the business community in the other industries can do as they like.

This new policy is set to touch on the formal channels of the tourism industry (Hotels, DMCs, TO and Travel Agents) at a time when airlines encourage direct bookings and kill off the commissions practice of the past. DMCs are today said to be recording 30 to 35% of arrivals of Seychelles tourism. The Online Booking Engines have grown and eaten on what was the larger chunk of the market in the past. Out of the 30 to 35% of the DMC Numbers, it is noted that only about 50% of DMC clients buy excursions from them.

The tourism industry has moved from the 80s and 90s. Today, hotels operate a lot on direct contracts and are controlling their own destiny. Branded properties such as Starwood and Hilton for example, operate their fidelity point system or honours clients points, and Seychelles receives a lot of clients using their points system. This is not new, but more effort has been placed on these such targeting sales pitch in recent years.

Cruise Ship business is also set to be touched, in what is being called ‘quota of passengers being handled’. Understanding this business is essential if Seychelles wishes to not only maintain what has been achieved, but to also grow it. Cruise Ship Operators receive rates for contracted services over 24 months ahead of the ship’s arrival, and local operators need to guarantee Class A insurance of the US. Normal tourism pricing is 12 months ahead, but for cruise ships it is known to be 24 months, to ensure the ships’ itinerary takes in the destination in its programming. No local DMCs have enough staff to cope with cruise ship business and guides are subcontracted on each and every occasion.

Today in Seychelles the role of DMCs in the formal sector is known to help the informal sector. Small hotels and guest houses provide their own transfers to their guests and local DMCs as a maximum own less than 15% of the island’s bed stock. This will grow with difficulty, bearing in mind that a million US Dollars per key is the budget for an upmarket villa or $500,000 per key in a lower category establishment.

Mauritius has worked with their operators and today have Beachcomber, Constance and Sun among others as big regional players. Seychellois operators are yet to venture beyond our shores.

Desroches Four Seasons has a resort island hotel and a Mahe Resort and it is known that they want their own plane service to ensure that quality and flexibility exists. Hilton Seychelles has three properties, Constance with two of the largest resorts and Club Med is set to open the island’s biggest unit. Seychelles has 60% of its bed stock in the hands of small hoteliers (24 rooms or under), and some local hoteliers with 28 to 30 rooms at L’Archipel, 40 at Carana Beach and 26 at Val Mer are considered large hotels, even though they sit firmly in the small hotel side of the industry. It is potentially time to raise the definition to 60 rooms.

Tour Operators cannot any longer allocate pages in their brochures to small establishments because of costs. This has been on the horizon for years which is why Online Businesses have exploded as service providers for the smaller operators.

The issue is rather complex and cannot be simplified by new rules or regulations. Seychellois companies should be protected because they are the economic insurance of the islands.

Air Seychelles increases rates on its domestic flights

The proposed increases in airfares between Mahe and Praslin have happened, even though the increases previously announced have been scaled back and finally given the go-ahead by the Seychelles National Assembly. Praslinois and Diguois will feel the increase even tough it is but a fraction of the previously announced ones, and the business community of the islands will see this as a further disadvantage, or just as another challenge for their businesses.

Air Seychelles made its case for the increase and Seychelles will reap the consequences from this latest increase.