Product, Prizing and Profitability to oxygenate tourism industry

Tourism multi task force meeting
Tourism multi task force meeting
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Written by Linda Hohnholz

Seychelles focuses on three P’s – Product, Prizing and Profitability to oxygenate its tourism industry.

Seychelles focuses on three P’s – Product, Prizing and Profitability to oxygenate its tourism industry.

Seychelles third multi-sectorial meeting openly discussed matters seen as challenging for the tourism trade partners and key government ministries in a bid to present a comprehensive formula to achieve growth in tourism industry.

Under the leadership of Danny Faure, Vice President, the multi-sectorial meeting came out with frank and open discussions to find out plausible solutions why Seychelles’ visitor arrival figures had stagnated.

Committee members unanimously agreed that there is a problem which needed to be addressed with comprehensive strategies to achieve high profitability during high season, new products to meet diversification and market demands and reasonable pricing throughout the value chain.

The three P’s of Seychelles Tourism Industry:- Profitability, Products and Pricing presented by Vice President Faure, wrapping up the discussion session were presented to committee members as food for thought to formulate comprehensive strategies and increase the country’s tourism yield.

The strategic report should be submitted to the committee and presented to cabinet before 10th October. Alain St Ange Minister for Tourism and Culture said the third multi-sectorial meeting was of strategic importance.

“Today, we have moved the multi sectorial meeting to a new level. The first two meetings took care of the pennies because there were so many loss ends which needed to be tightened. Now we’ve moved into the three P’s, pricing, products and profitability to ensure tourism growth,’’ Minister St.Ange said.

At the first two sessions of the multi-sectorial meetings tourism trade partners and Chamber of Commerce and Industries Members tabled what they saw as matters that were hampering Seychelles as a tourism product. They tabled their concerns on issues and shortfalls they saw as having a negative effect on the Tourism industry of the islands. In the third meeting the private sector came out more strongly recognising the industry’s common problems and made clear the urgency with which to tackle them.

Freddy Karkaria of the SHTA welcomed the three P’s adopted in third multi-sectorial meeting.

He said that the open discussions on the three P’s of tourism will put on the everyone’s agenda where the industry is going wrong and what measures should be implemented to redress the situation.

“ The 3rd Task Force meeting was skillfully presided by Vice-President Faure, and the outcome is generally quite satisfactory.

The highlight was that this meeting permitted for the first time that we can recall, an official and open exchange of ideas between the public and the private sectors regarding the essential links between regular air transport accessibility and the success of our tourism industry for the Seychelles economy.

Given our small population, Seychelles can never offer reciprocity in terms of outbound air travel passengers as do other countries with larger population bases. Thus, successful international airline operations are almost entirely dependent on leisure passenger traffic in and out of Seychelles. We have seen the economics of the airline business has seen dramatic shifts over the last fifteen years – privatisation and profitability being the key drivers. At the same time, we have a small volume of tourism arrivals, less than 250,000 in 2013. To put this in perspective, that is more or less the similar number of Chinese visitors who went to Maldives in 2013. We are today experiencing a 6% drop year on year from our primary source market, Europe. Today, Seychelles no longer enjoys regular weekly non-stop services from our key source markets in Europe as we used to when Government and Air Seychelles guaranteed these frequent and direct routes. This has evidently impacted on air access for leisure travel to Seychelles. Therein lies perhaps the economic challenge for profitable, regular non-stop airline operations to and from Seychelles across the 12 months of a year given the seasonality of our various source markets.

As a small volume destination, we are dependent on overseas tour operators and their sales distribution networks for generating around 90% of our incoming visitors. However, tour operators need access to seat blocks on a weekly or even daily basis. But, we are now almost entirely dependent on air access via the Gulf hubs. The arrival of the Gulf carriers, Emirates & Qatar Airways in 2005 and latterly Etihad, has been very good for the Seychelles and their brand power has vastly boosted Seychelles’ image and reputation on the global markets. One can today fly to Seychelles every day from almost any major population centre of the world. Air Seychelles is primarily a regional carrier and depends on code shares with its equity partner, Etihad, to access our source markets. But for European tour operators selling Seychelles, these changes have presented various constraints and challenges in terms of seat pricing, seat availability, and consumer appeal and satisfaction. Similar constraints have been felt by the DMC’s, hotels and the STB because regular seats previously offered for tour operator and travel agency educational trips to Seychelles by airlines flying direct has been grossly reduced over the last few years. This has impacted on our ability to constantly maintain awareness and visibility in the market place and update and increase destination and product knowledge of the Seychelles in the minds of overseas travel agents.

There is no policy document on air transport for Seychelles in the public domain. Given our deliberations, the 3rd Task Force Meeting resolved that the Minister responsible for Transport will engage with the Minister of Tourism and the Seychelles Hospitality & Tourism Association, to craft an air transport policy proposal that will ensure the long term success and profitability of Seychelles tourism industry from now into the very distant future. That is a very important and most welcomed step by government. The SHTA stands ready to participate fully in this and it is our fervent hope that at the very least an progressive outline report can be presented by the next Task Force meeting in October.

The SHTA’s request for temporary relief from VAT on tourism services plus the removal of Withholding Tax on Marketing activities will be finally reported on by the Minister of Finance at the October Task Force meeting.

On behalf of the SHTA, I salute Vice-President Faure for his patience, skill and openness in managing the deliberations of these complex and sensitive subjects. We are encouraged by the progress thus far. We look forward to moving into the more concrete implementation and action phases in the not too distant future.” said Freddy Karkaria, the Chairperson of the SHTA.

About the author

Avatar of Linda Hohnholz

Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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