The winter is harsh in Europe. The Dunabe River has frozen. One would tend to believe, Seychelles is packed with tourist from Europe. She is not.
In Seychelles, the load factor on inbound flights has dropped drastically. As Europe sneezes, Seychelles will catch a cold, the stage is set for a first quarter under performance as Tourism remains in limbo, without any firm footed direction after the surprise resignation of Mr. Alain St. Ange.
30% Hike Input Production Costs
The New Year brings insurmountable hurdles to the Tourism Industry. The sudden increase in cost for the 13 th month salary not only increases cost of employment subtitles for companies, but these costs, from operational input sectors increase cost of goods and services that support the Industry.
For example, PUC has increased rates by 10% to cope with heavy salary demands. Yet no proposal has been presented to make inefficient PUC more efficient. The 13 month salary money could have gone to buying underground cables, to remove poles, make PUC more efficient. Instead, we will be stuck with same bad service at a higher cost.
Insurance charges for hotels will increase this ear as well, adversely affecting heir bottom line, and to cope, hotels will be left with no alternative then to hike, already high rates for the new season.
Online Rate Hikes
Online booking agents are indicating that as much as a 40% hike in hotel rates in Seychelles. Four star and Five star properties represent the highest hikes. Smaller hotels register average a 20% hike in rates. Unless government takes action to drop the input costs in Tourism, increased rates for rooms will translate into lower load factors for inbound flights. Eventually, airlines will cut flights, use smaller planes, finally abandon the route if the input costs are not addressed.
Why Snow but Europe No Go?
Mauritius just registered a 11% increase in Tourism, and arrivals blew the 1.3 million mark. This means Europeans go to Mauritius. But not to Seychelles. Why? Cost! A Mauritius five star hotel week stay with meals is the same cost as one night in a Seychelles Five (5) star. With the increase in input costs, the same Tourist money that is spent for one week in Mauritius, will get you a Day Room in Seychelles.
As the snow falls, the river of Danube freezes, planes come in empty,I trust the leaders of Seychelles will ask: " what did we do wrong"? Then try to undo it, before the second quarter turns to mayhem in the economy.
Sesel Pou Seselwa!
May God Bless All Freedom Loving Seychellois!
15 comments:
These increases would definitively cause visitors demand to fall which means reduction in tourism sectors economic output and employment.As consequences ,these reductions would have a flow-on impact on the overall economy such as GDP and employment would both fall.
Governemnt has announce no specifics to deal with the issue .....and it seems the minister is lost.
Some recommandations:I donot know if PL/LDS really understand the fact that by putting a poltical motivating policy called 13th mothnly salary in palce the inpact it would have on the Torism industry the heart of our economy....I donot know if the government understand that the tourism industry,has a cascading effects economic impact on other asscoaited industry segments.E.g DIRECT travel and tourism contribution:(Commodities)accommodation ,transport,entertainemnt,attractions....INDUSTIRES:-accommodation,servcies ,Food and Beverage,cultural ,recreational services ,retails...SOURCES of SPENDING:___residents domestic T&T spending ,business domestic travel spednings,vistors export,Individual government T&t spending .......INDRECT TRAVEL AND TOURISM CONTRIBUTION:_-travel and toruism investment,impacts of purchase from suppliers ......INDCUED CONTRIBUTION (spending on direct or indirect employmees)housing ,clothings ,etc,,,TOTOAL TRAVEL AND TOURSIMCONTRIBUTION:_to GDP ,to Emplyoment
-Governemnt should consider measures ,including tax policies ,thatin using Taxation to support Travel and Tourism.(not the case today)
-Using DATA collection to establish Economy-specific price elasticities-
-This Data should be incorporated in National travel and tourism policies ,particularly as it will enable better targeting potential visitors.
-In fact ,when government was deciding on its Tax increase etc.....should had carefully considered to ensure that cost from reductions in economic output and employment would not overweigh the benefits of higher direct revenues.
Creating and expanding economic opportunities could rightly be considered a responsibility of government towards its citizens.Toursism industry ,,with its multipliers is the industry that create a<nd expand opportunity ,,,screwing the industry will bad economic measures do not help the industry providing the multipliers its should ........In other qwords ,the impacts on tourism is a result of demand and supply in the industry ..hence the demand/supply factors influence the number of visitors,their length of stay,and their expenditure patterns.Higher cost of input ,,,higher tax ,,,,etc would bring the industry while the economic structural characteristics determine its propensity to re-circulate those expneditures internally.The more round s of circulation generates within the economy,the greater the multipliers effect of the initial stimulus.
The government proposed economic polcies would have a devastating effect on our tourism industry thus our economy---stagnation is on the way should pl does not revise its damaging higherc cost inputs on tourism industry and side effects it would have on the long term......
St Ange has put the toursin industry on the rial and right track ,it seems pl is going to derail it with its tax increase ,,and fianancial burdens imposed on industry in genral.....
Hard time ahead for Seychellois .....and the culprit is pl/LDS of your coming suffering .......they must be made accountable .
Load factors of 52%, as Mr Gill mentioned the other day are disastrous for the airline industry. According to IATA the average break-even load factor for the industry in recent years has been approximately 66 percent. For some airlines up to 75%
Last weekend my wife and I returned to Seychelles from Paris via Air Seychelles and I doubt if the aircraft was half full. Apart from the added cost to all employers the main effect of the 13th cheque will be lower employment. It is probably the daftest government measure I have ever come across in any country. However, I must say that from my experience I find many hotels very much over staffed at the managerial level, they seem to have a manager for everything. I sometimes wonder what general managers actually ever do as they seem to have under managers for every facet of the hotels operation. Too many chiefs and not enough Indians perhaps?
5:02 your point is highly valid.
International hotels have a established operational staff structure they apply to all their hotels around the World.
Once they apply these structures to a hotel in Seychelles, it causes over staffing.
Quite simply put, no hotel in Seychelles operates at 80% occupancy for 12 months.
The reality is most hotels operate at 45% to 50% in peak periods,
This makes it look inefficient and over staffed.
Similarly, the lack of high occupancy makes a 13 month salary seem a bit orbital as measure.
Thank you for you positive input.
Christopher Gill
most of hotels arund the round are dropping down the prices or are offering promotions..n sey they just continue to put the price up and the taxes etc....the day they will realise it will be very late......we are not the only country with nices beaches.....thnk!!!
7:14 - unfortunately, the Tourism Industry in Seychelles is dealing with a irresponsible political leadership from Le Pep and LDS on this subject.
The composite increase in operational costs, leave hotels and other operators no option but to increase prices by 20% to 40%.
The alternative is to keep prices as they are and go bankrupt.
Hence, price adjustment is a risk they must take.
The unfortunate issue is the already low load factor, which we hope sheikh Khalifa will resolve by just sending empty planes to Seychelles, as one Le Pep supporter told me.
Sesel Pou Seselwa!
CGill
7.14
The tourism indsutry has no choice than increase their price to cope with pl&LDS irresponsible decision....else they wouls simply desaspear as business...Of course increase price creates more defection nad make sezchlles less attractive and competitive .......A GIll puts it ...the fact is no single hotle in sezchelles can fill up their rooms anz time during the zear ,,and with Pl&LDs decision things would just get worse....
PL and LDs is creating a vicious circle ..which makes our economy poise for loss.How could a government shot itself in the foot by passing such stupid policy _Seychelles after we have been in a long in recession and economic stagnation........Instead of leaving things as it is now so that things continue to improve ,,they implement policies that are going to strangle the economy and bring us back into recession...
Seyhellois must say No..to such destructive polcies?/Prendre a la legere.Grow up Pl&LDS
Higher tax ,fuel price etc ...will create inflation and make life tougher.
Fuel,has gone up one rupee per liter.
Farmers have been told animal feed prices will increase.
This means chicken and pork, beef will increase.
Fishermen say while they have fuel concession they too must pay PUC and buy chicken and pork vegetables.
All slated for increase.
Food for thought -
1 kilo tomato SCR. 140.00 per kilo ( ISPC)
2. Kilo cucumber SCR. 104.00 per kilo ( ISPC)
3. Chicken whole broiler SCR. 78.00 per kilo ( local farmer)
4. Fish 140.00 per kilo on Praslin
5. So yo sauce. 140.00 per 750 ml.
Nuts!
I confirm from shopping today most items are not up 10% in all stores. As an avid shopper for my business, I see the increase.
The school children are also shopping for school supplies and are finding their money to be short of change.
This situation left unabated, will result in hyper inflation, given that 13 th month salary affects all products, all producers, and all inputs into a production cycle.
On shopping ---we allow wanted that government allow Victoria City to open until alte at night .let us say ,2 in the morning ..so that to provide Night attractions ,activites for toursists ...and would allow new busienses creation ....
nb PL IS MOVING IN THIS DIRECTION --- HOWEVER ,,,PL IS TALKING ABOUT OPENING offices UNTI L ALTER .......iN MY OPINION offices SHOULD OR MAYBE OPEN UNTIL ..OR oNE HOUR LONGER .......NOT MORE ...FOR IT WOULD MEAN EXTRA PAID FOR EMPLOYEES ....CANNOT AFFORD WITH THIS 123TH MOTNHLY SALARY TO PAY EXTA TIMES
however ..VICTORIA CITYSHOULD BE OPEND UNTIL 2 OCLOCK ......not super markets ...BUT SOUVENIR SHOP.BARS .RESNTAURANTS ,,,CLTHOING SHOPS ,,MAYBE A nIGHT MARKET ...PIANO BAR ,BOWLING SALON ,KARAOKE CAFE HARDRCOK CAFE ,..TAKE AWAYS ,,,,,ETC..ETC..ETC..
not offices OR super markets.....
Seychelles ÊSPICALLY mAHE BADLY NEED nIGHT ATTRACTIONS ....officies OPNING IN NOT A NIGHT ATTRACTION ...........OR SERIVCES ,,,,,,,,MAYBE OPEN AN HOUR LONGER BUT NOT AS IF IT IS A JUWLERY ,SOUVENIR SHOP OR RESTAURANT UNTI L2 IN THE MORNING ......NOWHERE THIS IN DONE IN MODERN SOCIETIES ECCPET IN AISA ,,,,,,
IMF confirmed inflation is coming
Most people have ideas on how to spend money.
Few have ideas on how to make money.
Fewer have ideas on how to cut cost.
Inflation is already here, thanks to PL and LDS.
They have basically taken the Farrari and run it into a electric pole.
Sesel Pou Seselwa!
Christopher Gill
Billion of rupee missing in public coffers ...at the top of the list Pl govenremnt borrowing.
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