‘Seychelles’ economic progress stays dynamic’ |14 October 2014

Seychelles’ economic development remains dynamic and like all countries we have our ups and downs as the economy is not cast in stone.

President James Michel said depending on international and local factors, a country’s economy grows or slows down, and this is particularly true in an open economy which depends a lot on the realities of the international economic situation.
 
“When Europe is in recession, the Seychelles economy is badly affected as most of our tourists come from Europe. As a result there is a decrease in the number of tourists who come to Seychelles and those who do come do not have the same spending power. This is why we have to be vigilant to see what is causing the negative impact and take measures to remedy the situation and at the same time strengthen and harmonise the existing laws to stop the situation from getting out of hand,” President Michel said in the En Moman Avek Prezidan programme.

He noted that there has been a decrease in the country’s revenue because our level of importation has increased while revenue collected did not match the target set. The main reason is because revenue from tourism did not increase as expected and at the same time there was a salary increase for all Seychellois workers.

“Right now we have almost the same tourism figures as last year, but our import has increased. There has also been a decrease in the export rate of the Indian Ocean Tuna and Seychelles Breweries, leading to a drop in our Gross Domestic Products (GDP).

“We now have to work on giving a new impetus to the tourism industry so as to increase our revenue. For a small country like ours which depends on tourism for its revenue and at the same time imports a lot, it is normal to experience these kinds of fluctuation,” explained Mr Michel.

Asked if it was the right time for a salary increase which has helped to increase the purchasing power of Seychellois who are also now feeling the pressure as prices of commodities have gone up, President Michel replied:

“It is good for a country to have a good financial reserve. But at the same time you have to improve the lives of your people. This is our policy. It was not irresponsible on our part to give a salary increase to improve the standard of living of our people. There is nothing wrong about that, but as explained earlier, we did not achieve the forecasted revenue from tourism. It is not our fault as Europe is in recession. The European Central Bank has given itself a negative interest to try to boost up economic activities in Europe. Because we depend a lot on tourism, it affects our total revenue. What we must do is to be more aggressive in marketing Seychelles in other parts of the world, like Russia and China. Diversification is very important,” explained the President.

Commenting on the non-availability of direct flights to Europe which many believe have contributed to a decrease in the number of tourists coming from the main and traditional markets, President Michel said he partly agrees, but more should be done to market Seychelles as a destination.

“To a certain extent direct flights help and are a plus, but not the solution. We have three direct flights to South Africa per week and the seat occupancy is 60%. Why isn’t it at 80% or even 90%? It means that direct flight to South Africa is not the real problem. The problem is we have to market Seychelles as a destination even more in South Africa in order to sell more seats,” explained President Michel.

He noted that there are at least two direct flights to the Gulf countries every day and people from these countries have a lot of money, but still the seat occupancy for the carriers – Etihad Airways/Air Seychelles and Emirates Airlines – is 60%.

“The problem is we are not marketing Seychelles as we should to make the people become interested to come to visit our country. We have Condor flying directly from Germany to Seychelles and Air Seychelles makes a short stop in Abu Dhabi on its way to Paris. Another factor is that people from some of these European countries do not have the right kind of money to come to Seychelles for their holidays,” explained President Michel.

The President added that he is in favour of direct flights, but no airline will fly to a destination which is not viable, with many empty seats.

“The decrease in the number of visitors from Europe is not only linked to direct flights. Like I’ve said earlier we have to do some aggressive marketing, show our presence in these destinations. People in these countries should know about Seychelles – which is a beautiful country and is worth visiting. We must create an interest in the people for them to come to Seychelles and at the same time offer them a product which is good. If Mauritius has a better product, tourists will go to Mauritius even though there are direct flights from European countries to Seychelles. The price of the product is also important.
Overpricing is not good and tourists will go where they can get the same thing for less. Selling Seychelles does not only depend on the Ministry of Tourism and Culture, the Seychelles Tourism Board but the trade in general.  This is why I am backing the multi-sectoral meeting involving trade, STB, government and airlines,” said Mr Michel.

The President added that repeated visitors have also said Seychellois are losing their charm and smile, and that the level of service they receive here does not match that of Mauritius or the Far East.

“We have to look at improving our hospitality, stop aggressing and stealing against visitors. Sometimes we lose sight that we are responsible for tourists not coming to Seychelles. We are the most beautiful country in the region and in the world, but we have to make visitors want to come to Seychelles at an affordable price,” noted the President.

On the other hand, President Michel believes we should work on the Chinese market as the Chinese have the ability to spend.

“Having direct flights to China, in my opinion, will be a big boost and at the same time we can have Chinese carriers flying to Seychelles. We know for example that Chinese visitors who come to Seychelles like to enjoy typical Chinese food, but do we have enough Chinese restaurants here or other things Chinese like to do?” he exclaimed.

Reacting to the United Nations human development index and others, President Michel said the fact that the country’s position has dropped compared to previous years is not good for our image.

He explained that this is mostly due to the international organisations that work on these indexes changing their modalities quite often without letting us know.

“For example, if we take the human development index, if the organisation had used the same parameters and information as last year, we would have lost just one point, but because of the changes which we were not aware of, we have dropped further behind. We also have to understand that we cannot be complacent after having achieved good scores as other countries want to topple us. We need to strive to be better. It depends on all of us to work hard and develop the right conditions for Seychelles to continue moving forward in its development,” said Mr Michel.

He also explained that Seychelles is a small country with not enough resources to work on producing the required data for these organisations and when they change their format without any warning, it helps to lower our scores.

“We have asked these organisations to inform us of the right parameters they will be using for us to prepare our data. This does not only imply for Seychelles but for other small island developing states. We also need their help in capacity building to develop the right statistics and to be ready to provide them with the information they require,” he concluded.