Cultural and Creative Tourism Development
Business Model Description
Develop cultural infrastructure for creative tourism services, such as by re-developing and operating tangible heritage sites (e.g., museums and historical places). Integrate intangible heritage, including oral traditions, festivals, music, traditional crafts, and community-based tourism activities based on the shared Creole and African culture, plantation history (such as cinnamon, copra, and coconut) and nature in Seychelles.
Expected Impact
Safeguard national heritage and shared prosperity from services sector by improving access to resources and generate higher tourism income by diversifying offerings and promoting longer stays.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Seychelles: Greater Victoria
- Seychelles: Rural Mahé
- Seychelles: Praslin
- Seychelles: La Digue
- Seychelles: Outer Islands
Sector Classification
Services
Development need
As per the Travel and Tourism Competitiveness Index, Seychelles lags in cultural resources and price competitiveness (4). Industries compete for scarce land and marine resources (4). External developments such as war and pandemic create a need to expand the market beyond Europe (1, 11). Adapting the sector to environmental and economic shocks contributes to SDGs 8 and 13 (5).
Policy priority
The Vision 2033 & National Development Strategy 2019-2023 aim to strengthen the tourism sector and improve sustainable practices (3, 6). Voluntary National Review (VNR) aims to implement sustainable tourism policies by 2030 (5).
Gender inequalities and marginalization issues
As the majority of the population is involved in the services sector, war in Ukraine may affect many low-income households (1). Gender disparity among the young labour force, with 54.3% of males and 45.7% of females in 2019 (5).
Investment opportunities Introduction
The government allocated about USD 220 million or 10.9 per cent of its GDP to Goods and Services (excluding tourism) for the 2022 fiscal year (9). In 2021, 182,849 tourists visited Seychelles, with a 59.2% rise year-on-year (18). Following the trend, the accommodation and food sector is projected to grow by 46% in 2022 (9).
Key bottlenecks Introduction
High youth unemployment (3) while the sector accounts for a major part of the employment. The country has a particular shortage and mismatch of skilled labour that is not addressed through available training options (4). Additionally, the sector is highly vulnerable to climate change effects (12).
Hospitality and Recreation
Development need
External factors such as the war in Europe, the largest tourism market for Seychelles, risk the recovery in tourism sector (1, 2). Many expatriates are engaged in the sector, with 22,997 Gainful Occupational Permits as of 2019 (3). The market remains traditionally-oriented (11). Only 21 out of 600 hotels are certified for Seychelles Sustainable Tourism Label (SSTL) (5).
Policy priority
Seychelles’ Marine Spatial Plan (SMSP) aims to designate 30% of her Exclusive Economic Zone (EEZ) of 1.35 million km² as marine protected areas (MPAs), empowering sustainable coastal and marine tourism activities, including nautical tourism and PPP models for co-management of MPAs. Seychelles Tourism Master Plan sets a goal to increase the targeting of emerging source markets such as from Asia (7,11, 31) .
Gender inequalities and marginalization issues
The tourism sector is dominated by big operators restricting local community involvement, including minority and disadvantaged groups. Locals are employed in menial jobs, while expatriates occupy top positions (26).
Investment opportunities introduction
The government provides marketing & promotion deductions, special rates for accelerated depreciation, and excise tax concessions for some categories (8). At the same time, the tourism sector brought in USD 228 million in revenue by the end of October 2021 (9). Moreover, 16.3% of total employment was in the "Accommodation and Food Service Activities industry" (10).
Key bottlenecks introduction
In 2019, the government imposed a moratorium on new hotel development in La Digue until 2023 (20). High cost of electricity, which comes from Praslin (21). Sustaining repeated guest rate, which increased to 17% in 4Q of 2017. Unsustainable airline capacity: out of 2,100 seats available per day, there are 1,000 international arrivals (11).
Hotels and Lodging
Pipeline Opportunity
Cultural and Creative Tourism Development
Develop cultural infrastructure for creative tourism services, such as by re-developing and operating tangible heritage sites (e.g., museums and historical places). Integrate intangible heritage, including oral traditions, festivals, music, traditional crafts, and community-based tourism activities based on the shared Creole and African culture, plantation history (such as cinnamon, copra, and coconut) and nature in Seychelles.
Business Case
Market Size and Environment
< USD 50 million
Between January and May 2022, 87.3% of tourists' spending went to accommodation, and the remaining 12.7% was spent on other services, mainly restaurants, travel agents, and car rentals, therefore hinting at a cultural tourism market that could achieve size but currently at a nascent stage (29).
Demand for cultural activities is increasing for diversifying Seychelles' tourism offering. On average, 350-400 visitors per day visit a prime cultural site, generating some USD 70.000. A handful of such establishments populate the Seychellois creative tourism market (15).
Despite the impact of COVID-19 on the tourism sector, by October 2021, Seychelles received USD 228 million in revenue (9). In 2022, 332,068 tourists visited Seychelles with a remarkable 82% increase year-on-year. The figure practically caught up with the pre-pandemic level as the total visitors numbered 384,204 in 2019 (30).
Indicative Return
> 25%
UNDP stakeholder consultations with public agencies and state-owned-enterprises that develop and operate heritage sites in Seychelles reveal that creative tourism in Seychelles may generate positive returns within a year based on an entrance fee of USD 11 and 350-400 visitors per day (14, 28).
Investment Timeframe
Short Term (0–5 years)
UNDP stakeholder consultations with public agencies and state-owned-enterprises that develop and operate heritage sites in Seychelles reveal that creative tourism in Seychelles may generate positive returns within a year based on an entrance fee of USD 11 and 350-400 visitors per day (14, 28).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
With limited tourism offerings beyond the "sand, sea and sun", Seychelles has been underperforming in translating shifting global tourist tastes for an experience-based visit to increase economic and community value addition from the industry (17).
Seychelles relies heavily on tourist arrivals as the main catalyst of the economy and tourism industry for employment, economic growth, and value generation. In 2018, Seychelles' service industry accounted for 84% of the GDP and 64% of export revenues (5).
Although tourist arrivals increased steadily in the 2010s, Seychelles faced a downturn in spending per tourist. The spending decreased from about USD 2000 in 2012 to below USD 1500 after 2015. As of May 2022, 87% of tourist spending goes to accommodation (17, 18)
Gender & Marginalisation
Seychelles' local communities remain at risk of being overlooked by resort-based tourism initiatives.
Expected Development Outcome
Cultural and creative tourism development enhances visitors' experience in Seychelles, effectively improving customer satisfaction and value generation from different tourism products, promoting and safeguarding Seychelles' national heritage and repeated tourist rate by improving customer satisfaction.
Cultural and creative tourism experiences increase spending per visitor and length of stay, diversify tourism products, and improve the tourism value chain, effectively mitigating the economic vulnerability created by overreliance on tourist arrivals as the main catalyst of the economy.
New tourism channels, such as creative tourism, offer authentic experiences that increase per capita tourist spending and sustain value streams from tourism-related businesses.
Gender & Marginalisation
Cultural and creative tourism initiatives will include local handicrafts and creole culture, improving local communities' inclusion in the tourism value chain.
Primary SDGs addressed
8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate
23.15% in 2018 (5).
N/A
11.4.1 Total per capita expenditure on the preservation, protection and conservation of all cultural and natural heritage, by source of funding (public, private), type of heritage (cultural, natural) and level of government (national, regional, and local/
1,151,861 in 2019 (5).
N/A
12.b.1 Implementation of standard accounting tools to monitor the economic and environmental aspects of tourism sustainability
N/A
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Outcome Risks
Improper handling or commercialization of tangible heritage sites or artefacts may cause damage or impede their preservation.
Increased tourist inflows may indirectly bring about higher local prices for the domestic population, restraining their access to services.
Impact Risks
The endurance of the positive impact of cultural and creative tourism development depends on the participation of the youth, who may continue local traditions and national heritage.
Firms' capacity to align culture and creative arts into the business model may fail to reach the expected level of positive impact.
The positive impact of cultural and creative tourism development might be impaired by climate change and external environmental pressures.
If creative experiences are geared towards international tourism, thereby increasing pricing and rates, the local population's access might be curbed.
Impact Classification
What
Cultural and creative tourism development safeguards national heritage and improves visitor experience, generating higher tourism yield and repeated guest rates.
Who
Local communities that benefit from increased visibility and inclusion in the tourism value chain, tourism establishments, and cultural enterprises, including museums and marine ecosystems.
Risk
Cultural and creative tourism development may increase tourist inflows to the effect of high prices for the local population, thereby curbing their access to such experiences.
Contribution
Cultural and creative tourism improves tourist yield, otherwise achievable through other services such as an electronic vehicle (EV) car rentals, restaurants, and digital tourism applications.
How Much
Improving visitor experience opportunities for a targeted 400,000 visitors annually in Seychelles. Spending per tourist has decreased from about USD 2,000 to 1500 (17).
Impact Thesis
Safeguard national heritage and shared prosperity from services sector by improving access to resources and generate higher tourism income by diversifying offerings and promoting longer stays.
Enabling Environment
Policy Environment
Seychelles National Development Strategy, 2019-2023: Sets tourism as one of the key intervention areas and targets the promotion of creative industries and cultural tourism for preserving and creating value from Creole culture (2).
Victoria Masterplan 2040, 2015: Sets out the vision and strategy for the development of Victoria and aims to position the city as the cultural and creative hub of Seychelles, embracing Creole heritage and culture (18).
Creative Industries Policy, 2012: Aims to promote cultural tourism in Seychelles, including creative industries and authentic Seychellois cultural experience for tourists (14).
Reserved Economic Activities Policy, April 2020: ensures that certain economic activities that are doable and affordable to the Seychellois investors and businesses shall remain reserved for them; the list includes accommodation of 1 to 15 rooms (26).
Financial Environment
Financial incentives: In 2020, the Government of Seychelles made available a new SCR 100 million Covid Relief Scheme carrying 1.5% interest via the Development Bank of Seychelles to assist MSMEs in sectors adversely impacted by the crisis with 70% unsecured loans of up to SCR 100,000 (25).
Fiscal incentives: Seychelles offers marketing and promotion deductions for the tourism sector up to 5% of the taxable income or the actual expenditure and special rates for accelerated depreciation (8).
Other incentives: There is a deduction allowance for the training certified by the Department of Tourism in 150% of the actual expenditure incurred (8).
Regulatory Environment
Tourism Development Act, 2019: Facilitates the planning and implementing of policies relating to the tourism industry in Seychelles (20).
Tourism (Incentives) Act, 2003: Aims to attract private investment in the tourism sector, targeting high-standard projects to enhance the marketing image of Seychelles. Provides incentives for licenced accommodation, tour operators, fuel concessions, etc. (22).
Licences Regulations, 2010: Provides more transparent procedures for issuing and renewing licenses. The act facilitates yachting tourism, boat charters, tour operators and travel agents, car hire, tourist guides and others (23).
Seychelles Heritage Foundation Act, 2006: Provide for establishing the Seychelles Heritage Foundation and connected matters. This Act establishes the Seychelles Heritage Foundation, defines its objectives, and provides for its internal organization (24).
S.I. 76. - Seychelles Investment (Economic Activities) Regulations, 2022: lists entertainment services, including theatre, live bands and circus services, as an activity a non-Seychellois may invest in with the requirement to conduct an Economic Needs Test (ENT) (27).
Marketplace Participants
Private Sector
Only individual enterpreneurs are currently involved in developing heritage sites and extending creative offerings in Seychelles.
Government
Ministry of Foreign Affairs and Tourism, Ministry of Finance, National Planning and Trade, Seychelles National Institute of Culture Heritage & the Arts, Seychelles Planning Authority, Office of the Mayor of Victoria, Creative Seychelles Agency, National Arts Council (NAC), L'Union Estate.
Multilaterals
Multilaterals: United Nations Development Programme (UNDP), United Nations Educational, Scientific and Cultural Organization (UNESCO), International Federation of Arts Councils and Cultural Agencies (IFACCA), IKI, Critical Ecosystem Partnership Fund (CEPF).
Non-Profit
Vanilla Islands Association, Seychelles Hospitality & Tourism Association (SHTA), Cooperatives des Artisans, Seychelles Music Association (SeyMas).
Target Locations
Seychelles: Greater Victoria
Seychelles: Rural Mahé
Seychelles: Praslin
Seychelles: La Digue
Seychelles: Outer Islands
References
- (1) UNDP. 2022. The impact of the war in Ukraine on sustainable development in Africa. https://www.undp.org/africa/publications/impact-war-ukraine-sustainable-development-africa
- (2) UNDP. 2020. An Assessment of the Socio-Economic Impact of COVID-19 in Seychelles. https://www.undp.org/africa/publications/assessment-socio-economic-impact-covid-19-seychelles
- (3) Department of Economic Planning Ministry of Finance, Trade, Investment and Economic Planning. Seychelles National Development Strategy. 2019-2023. http://www.finance.gov.sc/uploads/files/Seychelles_National_Development_Strategy_2019_2023.pdf
- (4) World Economic Forum. 2019. The Travel & Tourism Competitiveness Report 2019. https://www3.weforum.org/docs/WEF_TTCR_2019.pdf
- (5) Ministry of Finance, Trade, Investment & Economic Planning. Voluntary National Review. 2020. Republic of Seychelles. https://sustainabledevelopment.un.org/content/documents/26382VNR_2020_Seychelles_Report.pdf
- (6) Department of Economic Planning Ministry of Finance, Trade, Investment and Economic Planning. Seychelles Vision 2023: Towards Sustainable and Inclusive Future. http://www.finance.gov.sc/uploads/files/Vision_2033.pdf
- (7) Government of Seychelles. 2019. Seychelles Tourism Master Plan II. Destination 2023: A Strategy for Sustainable Tourism Growth. http://www.tourism.gov.sc/lib/TOURISM_MASTER_PLAN_PART_2_TOURISM_SECTOR_STRATEGY_DESTINATION_2023.pdf
- (8) Seychelles Investment Board. 2022. Tourism - Taxes and Incentives. https://investinseychelles.com/investors-guide/investor-resources/seychelles-tax-guide/tourism-taxes-and-incentives
- (9) Government of Seychelles. 2022. Budget 2022. https://www.statehouse.gov.sc/uploads/cabinet_downloads/126_SXUXuA3m.pdf
- (10) National Bureau of Statistics. 2020. Employment earnings 2020. https://www.nbs.gov.sc/downloads/economic-statistics/employment-earnings/2020
- (11) Government of Seychelles. 2018. Seychelles Tourism Master Plan. Part 1: Situational Analysis for a Sustainable and Responsible Tourism. http://tourism.gov.sc/wp-content/uploads/2019/07/SEYCHELLES-TOURISM-MASTER-PLAN_PART1-SITUATIONAL-ANALYSIS.pdf
- (12) Ministry of Fisheries and Blue Economy. 2018. Seychelles Blue Economy: Strategic Policy Framework and Roadmap Charting the future (2018-2030). http://www.seychellesconsulate.org.hk/download/Blue_Economy_Road_Map.pdf
- (13) Malbrook, Julia. 2018. After a modern facelift, Seychelles National Museum of History reopens to public. Seychelles News Agency: Victoria. http://www.seychellesnewsagency.com/articles/10141/After+a+modern+facelift%2C+Seychelles+National+Museum+of+History+reopens+to+public
- (14) UNDP Project Team stakeholder consultation undertaken with a public department and an agency in May 2022.
- (15) UNDP Project Team stakeholder consultation undertaken with a cultural tourism enterpise in June 2022.
- (16) CAPA Centre for Aviation. 2022. Seychelles tourist arrivals decline 37% in Dec-2021 compared to Dec-2019, 182,849 tourists in 2021. https://centreforaviation.com/news/seychelles-tourist-arrivals-decline-37-in-dec-2021-compared-to-dec-2019-182849-tourists-in-2021-1113804
- (17) World Bank. 2017. The Republic of Seychelles Systematic Country Diagnostic. Washington, DC: World Bank. https://openknowledge.worldbank.org/handle/10986/27559
- (18) Karapetyan, Salifa. 2022. Seychelles' tourism minister calls for more opportunities for cultural tourism spending. http://www.seychellesnewsagency.com/articles/17032/Seychelles%27+tourism+minister+calls+for+more+opportunities+for+cultural+tourism+spending
- (19) Seychelles Planning Authority. 2015. Victoria Masterplan 2040. http://www.spa.gov.sc/sites/default/files/documents/Victoria%20Masterplan%20-%20Chapter%200%20to%202.pdf
- (20) Republic of Seychelles. 2019. Tourism Development Act. http://tourism.gov.sc/wp-content/uploads/2016/07/Tourism-Development-Act_2019.pdf
- (21) World Tourism Organization (UNWTO). 2018. Tourism and Culture Synergies. UNWTO, Madrid, DOI: https://doi.org/10.18111/9789284418978
- (22) SeyLII. Tourism (Incentives) Act 2003. https://seylii.org/sc/legislation/act/2003/7
- (23) WIPO Lex. 2014. Licences Act, 2010. https://wipolex-res.wipo.int/edocs/lexdocs/laws/en/sc/sc020en.html
- (24) FAOLEX. 2022. Seychelles Heritage Foundation Act, 2006. https://www.fao.org/faolex/results/details/en/c/LEX-FAOC071756/#:~:text=Seychelles%20Heritage%20Foundation%20Act%2C%202006,provides%20for%20its%20internal%20organization
- (25) Development Bank of Seychelles. 2020. COVID-19 Relief Scheme. http://www.dbs.sc/product-loans/covid-19-relief-scheme
- (26) The Ministry of Finance, Trade, Investment and Economic Planning. 2020. Policy Paper on Economic Activities Reserved for Seychellois. https://www.investinseychelles.com/component/edocman/reserved-economic-activities-policy-reap-_april-2020/download?Itemid=0
- (27) Ministry of Investment, Entrepreneurship, and Industry. 2022. Seychelles Investment (Economic Activities) Regulations, 2022. https://www.gazette.sc/sites/default/files/2022-07/SI%2076%202022%20-%20Seychelles%20Investment%20%28Economic%20Activities%29%20Regulations%202022.pdf
- (28) Bhanderi & Co Chartered Certified Accountants. 2019. Report of the Directors and Financial Statements for the Year Ended 31 December 2019 for L'Union Estate Company Limited. https://www.pemc.sc/_files/ugd/e104cb_4260a1c5795f443da03b1251b185b121.pdf
- (29) Bonnelame, Betymie. 2022. Seychelles' tourism minister calls for more opportunities for cultural tourism spending. http://www.seychellesnewsagency.com/articles/17032/Seychelles%27+tourism+minister+calls+for+more+opportunities+for+cultural+tourism+spending.
- (30) National Bureau of Statistics. 2023. Statistical Bulletin December 2022. https://www.nbs.gov.sc/downloads/dec-2022-tourism/viewdocument.
- (31) UNDP Project Team stakeholder consultation undertaken with Seychelles MSP Initiative in July 2022.