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SHTA reacts to 2015 Budget speech |20 December 2014

The Seychelles Hospitality and Tourism Association (SHTA) has issued a statement expressing the members’ “overall disappointment” with the 2015 Budget presented by Finance, Trade and Investment Minister Pierre Laporte earlier this week.

According to the statement, the Budget 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,” says the SHTA statement.

“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,” adds the statement.

The statement says the Budget does not reflect the spirit of collaboration with which the private sector engaged with the government 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,” says the statement.

According to the SHTA statement 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,” laments the statement.

“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 over capacity, 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,” concludes the statement.

 

 

 

 

 

 

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