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Saint Ange on Seychelles Tourism Report #11

I am starting the 11th edition of the Saint Ange on Seychelles Tourism Report with a quote from the respected Mahatma Gandhi: “Your beliefs become your thoughts, your thoughts become your words, your words become your actions, your actions become your habits, your habits become your values, your values become your destiny.”

The world has experienced so much of the opposite to what Mahatma Gandhi speaks about. Bitterness, anger, hate and vindictiveness cannot, and should not, be the habit and values of any leader today, tomorrow, or at any time in the future. We need more unity and respect and this includes us in the Seychelles. Many are blaming others only to avoid some truth about themselves. As the country suffers from deep division, we are embracing the culture of hate and vengeance. It is little wonder then that Seychelles is facing unprecedented uncertainty where the people are first in line to feel the hardship of economic challenges.

In my 10th Report last week, I proposed a relook at the Seychelles VAT system to benefit the tourism industry at a time when a boost for this industry is indeed a necessity. Recently, Dr Sanjay Modak from the Daily Kashmir Images made a detailed analysis of the Tourism Multiplier effect and what cities can learn from Dubai’s model.

An extract from Dr Sanjay Modak analysis reads: “If we consider Dubai, its leaders and Government clearly understood the far-reaching effects of organised tourism.When John Maynard Keynes turned conventional economic thinking on its head in 1936, he not only laid the foundation for present day macroeconomic theory and policy, but he also introduced the concept of the multiplier. Any spending injection into the economy, such as the Quantitative Easing (QE) policy undertaken in recent years by the US and the Eurozone to revive their recession-hit economies, results in an increase in effective demand or GDP via a repeated sequence of consumer spending. While this is not an instantaneous process, GDP in an economy rises by a multiple of the original injection over a period of time.”

Little did Keynes imagine then, in an era when the jet age and mass tourism did not exist, that one of the most powerful (and rarely mentioned) of all multipliers would be the tourism multiplier. One reason for this is that unlike sporadic government injections into distressed economies, the tourism multiplier works 24/7 and all year round. And Keynes, writing during the Great Depression, when millions were out of work, would not have known that 80 years later tourism would become the largest employer on earth. Today, one in 11 people in the world work in tourism or travel related industry. The industry generated some $8 trillion in turnover in 2016, according to the UN World Tourism Organisation (UNWTO).

The tourism multiplier is centred on infrastructure and works something like this. Once the essentials are in place – roads, transportation, communications and so on – an entire ecosystem of hotels, restaurants, and entertainment and leisure hubs quickly develops. This investment, on the part of both the government and the private sector, gives rise to a rippling effect via consumption spending trickling down through the economy. With the fundamentals in place, the tourists arrive and spend money and the multiplier kicks into operation once again, affecting yet another large swathe of the local population.

If we consider Dubai, its leaders and government clearly understood the far-reaching effects of organised tourism, perhaps not necessarily as an end in itself but as another, important, way of diversifying the economy. Dubai, lacking natural tourist attractions, recognised fairly early on that its geographical juxtaposition – within eight hours flying time of approximately six billion people – was an asset. It succeeded due to a visionary, deliberate and proactive approach, working hard to invest initially in world-class infrastructures such as roads, airports, airlines and communications. This gave rise to ancillary infrastructure centred around hotels, restaurants, entertainment, shopping and leisure.

The infrastructure thus created has benefited residents and visitors alike, and allowed Dubai to attract not just leisure tourists but business visitors as well. Dubai is now the premier trade show hub for a vast panoply of products and services in a region covering not only the greater Middle East but Africa and other areas as well. One does not need to understand the mathematics of the multiplier to realise the add-on effects that this investment in infrastructure created. The results are palpable.

As the UNWTO figures show, 15 million visitors to the UAE pumped in some $16 billion directly into the economy in 2016. The vision for 2020, with the Expo expected to draw around five million visitors on its own, is set to attract 20 million tourists – not an unreasonable scenario given the remarkable growth in tourism that has been witnessed so far.

Dr Sanjay Modak went on to explain that the multiplier cannot work without investment in infrastructure. Wonderful advertising slogans and e-visas without investments on the ground do not do the trick. Word of mouth does, and we take it for granted that people will continue to recommend a destination even though the service left much to be desired, the value for money is lacking, and the population made the tourists feel unwelcome.

More importantly, Dr Modak explained that tourism is a highly labour intensive industry. IT and other ‘glamour’ sectors do not have the capacity to absorb even a fraction of the fast-growing workforce. Tourism and its ancillaries, on the other hand, do.

This is exactly why I started this week’s Report with a discussion on the need for everyone to really appreciate tourism. This is not an option but a necessity today for the Government and for the people of the country. It is time for everyone to be part of the solution. Hotel Staff must work in unity together with the management for saving their employment and Government must continue to work with the private sector trade to consolidate the island’s tourism industry.

Today I can proudly confirm that I have recently been appointed as Deputy Secretary-General of ‘Forum of Small Medium Economic AFRICA ASEAN’ (FORSEAA).

FORSEAA is an intergovernmental forum founded by Seychelles and Indonesia with members from Africa and ASEAN countries, with its permanent secretariat in Jakarta, Indonesia.

One of the FORSEAA programs is to achieve small medium enterprises (SME) in Culture & Tourism by playing an active role in encouraging the host community to develop a compassionate destination based on the diversity of cultures within Indonesia. Specifically for small islands’ eco-tourism, FORSEAA will accelerate the cooperation between Africa and ASEAN countries, especially Seychelles and Indonesia, by pairing the brand image of Seychelles in the eco-marine tourism. I am working to see how we can assist the many small pristine islands in Indonesia to contribute economically to Seychelles.

Until next time, I bid you Bon Voyage.

Alain St.Ange
alain@saintange.com.au

Saint Ange Consultancywww.alainstange.net

Read more: Saint Ange Tourism Newsletter – 11th Edition

Topics featured in the 11th edition of my newsletter include:

  • Constance Ephelia, Seychelles – A Leader in Sustainability
  • A Vallee de Mai painting from the 1950s may soon return to Seychelles
  • Seychelles – a socio-economic snapshot
  • Villa Roscia at Beau Vallon has opened its doors
  • Flying the Seychelles flag proudly
  • Travel for Science
  • The Indian Ocean Lodge: Where Service Stands Out
  • Second Terminal for Mauritius Airport
  • Reunion Island records outstanding tourist arrival numbers
  • Events benefit the local population as it brings visibility to the country
  • Africa and MICE still driving Kenya’s Tourism growth
  • Mauritius claims it is the land of Big Game Fishing.