Small Islands Voice Global Forum
The advantages of up-market tourism
Seychelles’ current tourism policy with its emphasis on five-star resorts has been questioned in two previous articles. This article presents another side of the picture – the benefits of tourism focusing on an up-market clientele.
Paul Chow writes: the criticism of the current tourism strategy in Seychelles is too simplistic. There are many unique direct benefits from a tourism product pitched at higher end of the market which must not be ignored. These include the following: (1) all these people generally travel at the front of the aircraft (the first class section) which pays for many of the seats at the back of the aircraft, and therefore ensures the viability of the regular airline connections; (2) five-star hotels in Seychelles are smallish establishments and this limits their impact on the environment; (3) in general these resorts pay higher wages to attract the best staff; (4) the tourists they attract expect and pay for a number of services that might not necessarily be commercially viable such as helicopter services, luxurious yachts, etc.
Destinations like Seychelles will not be able to develop mass tourism similar to that of Spanish resorts because the cost of getting to the Seychelles from Europe, which provides 80% of our tourists, is quite high. A charter operator will not be able to charge anything close to the fares being quoted for Spanish resorts.
There is a misconception that the foreign ownership of tourism assets means that money goes out of the country. However, generally speaking we do not have adequate domestic capital for such large investments here in Seychelles. So because capital is not available locally, we would have to borrow money on the foreign market to build tourism properties here. This would involve not only using profits to repay the foreign debt but also exposing the country to sovereign risks associated with large-scale foreign borrowing.
Local interests do not have to own the assets outright for us to benefit. We can also profit by being share holders. This will be possible if the capital market is developed and the currency is convertible.
High class tourism should not be ignored but neither should it be at the expense of existing tourism. I agree that we should not use all our beach fronts to place hotels. What we are doing wrong at present in my view, is putting too many restrictions on the creation of family accommodations to cater to the lower end of the market. These types of establishments spread more of the tourism benefits. There is a need for a balanced tourism product that caters to both the high and lower ends of the market.
However, the wisdom of a small island concentrating so heavily on the tourism industry can also be open to question. Kuulei Maunupau writes: Coming from Hawaii, with over 4 million visitors a year, I recommend you try and look at expanding into other industries besides depending on tourism. Since the bombing of the World Trade Center in September 2001, Hawaii’s economy has been hard hit with over 10,000 jobs lost. The majority of our hotels are never at full capacity; in fact they fluctuate between 20% to 80% capacity, with the 80% usually falling on major holidays and events. The rental car companies sold off much of their car fleets due to the decrease in visitors. Stores are closing, beaches are empty, and companies are losing money. With war on the brink, the tourism industry again is suffering. Are you ready for the roller-coaster ride?
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