Seychelles Hospitality and Tourism Association (SHTA) Statement on the 2015 Budget

Seychelles Hospitality and Tourism Association

Friday 19th December 2014


We must express, on behalf of our members, our overall disappointment with the 2015 Budget
which fails to deliver on the fiscal measures necessary to oxygenate the tourism sector.
We have spent an inordinate amount of time over the last six months in discussion with
government. The motor of the economy is faltering, we asked for oxygen through fiscal respite.
Our request was not irresponsible or extravagant. The figures speak for themselves. A 5 percent
decline in tourism earnings, the 14 percent decline in fisheries confirms that Seychelles is too
expensive, unproductive, and a hard sell with high rates, high fuel bills, high VAT.
The government’s response has been to slam a struggling private sector with more taxes, which
will drive up costs even higher and make it even more difficult to do business in Seychelles. It does
not reflect the spirit of collaboration with which we as the private sector engaged with the
government in at the four Cross Sectorial Ministerial Meetings and in the various technical working
groups. These much publicised Public Private Sector meetings promised much at the outset but
delivered nothing in the end. As the SHTA, we feel that the Government has failed the Nation at
this critical moment.
The 2015 Budget is lacking in substance, it contains no stimulus to encourage growth of businesses
or for the private sector to reinvest to ensure the continuity of their businesses. It glosses over the
poor performance of 2014 and promotes business as usual as an ever shaky base crumbles from
inside. For our industry in particular it contains nothing material to ease the operational and
systemic challenges faced by our distressed operators. With over capacity of bed stock, reduced
earnings and low occupancy levels, severe international competition, an intra-country price war,
lack of access from our high yield source markets, the government has opted to disregard and
ignore the plight of an industry in trouble and the existing operators of 12,000 bed stock and other
tourism related operators.
Contrary to the Minister, we must express caution ahead due to disappointing forward bookings
and signs of early discounting for the early part of 2015. Due to overcapacity, we expect the intracountry
price war to continue, thus driving rates further down. The opening of the Bel Ombre
hotel and re-opening of Avani Seychelles Barbarons Resort & Spa will exacerbate the trend. With
escalating costs the new taxes will entail, those businesses who are able to will have no option but
to cut down on quality and standards just to keep afloat. This budget will make our industry even more uncompetitive and risks rendering it ultimately irrelevant