Cultural and Creative Tourism Development

Cultural and Creative Tourism Development

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Cultural and Creative Tourism Development

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Services
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Hospitality and Recreation
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in GPM)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
< USD 50 million
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Sustainable Cities and Communities (SDG 11) Responsible Consumption and Production (SDG 12)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Quality Education (SDG 4) Reduced Inequalities (SDG 10) Partnerships For the Goals (SDG 17)

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

Explore the country and target locations of the investment opportunity.
Country
Region
  • Seychelles: Greater Victoria
  • Seychelles: Rural Mahé
  • Seychelles: Praslin
  • Seychelles: La Digue
  • Seychelles: Outer Islands
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

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).

Sub Sector

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).

Industry

Hotels and Lodging

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Cultural and Creative Tourism Development

Business Model

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

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

< 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

GPM
Describes an expected percentage of revenue (that is actual profit before adjusting for operating cost) from the IOA investment.

> 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

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

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

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

< USD 500,000

Market Risks & Scale Obstacles

Capital - Limited Investor Interest

Limited interest in creative tourism developments is characterised by overreliance on beach tourism investments. In addition there is cultural indifference, and a lack of concessional financing and funding alternatives, including rebate schemes.

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

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

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate

Current Value

23.15% in 2018 (5).

Target Value

N/A

Sustainable Cities and Communities (SDG 11)
11 - Sustainable Cities and Communities

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/

Current Value

1,151,861 in 2019 (5).

Target Value

N/A

Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

12.b.1 Implementation of standard accounting tools to monitor the economic and environmental aspects of tourism sustainability

Current Value

N/A

Target Value

N/A

Secondary SDGs addressed

4 - Quality Education
10 - Reduced Inequalities
17 - Partnerships For the Goals

Directly impacted stakeholders

People

The local community benefits by means of increased earnings from use of their talents and knowledge in production of artisanal artifacts and artistic creation, improved visibility, and promotion of multiculturalism. Artisanal and small communities increase decent work and income opportunities.

Gender inequality and/or marginalization

The promotion of local culture and crafts benefit small communities and women in terms of improved access to the tourism value chain and participation in heritage conservation (21).

Planet

Decreased pressure on marine ecosystems caused by commercial and conventional tourism offerings.

Corporates

Increased tourism revenue for hotels and companies active in the tourism sector owing to longer stays brought about by a combination of beach and culture tourism.

Public sector

Department of Tourism, National Institute of Culture, Heritage & The Arts, Tourism Board, Creative Seychelles Agency, district-level administrations, and other public ministries, departments, and agencies (MDAs) benefit from reinvigorating tourism's branding and value-added.

Indirectly impacted stakeholders

People

The hospitality and creative industries' workforce benefits from new income channels and job opportunities. Tourism development's potential negative impact on culture and heritage due to the exclusion of the local population and gentrification is mitigated.

Gender inequality and/or marginalization

Facilitates integration of women and diverse communities that are underrepresented in the local or regional identity. Creative tourism develops sustainable capacity in local communities in heritage conservation. Rural creative tourism development Rural cultural tourism is significant for the population to compensate for the decline in traditional economic activities (21).

Corporates

Tourism sector intermediaries, such as agencies, bookers, and tour operators, benefit from increased tourist spending, mobility, and length of stay.

Public sector

Public sector benefits from creative tourism development by stimulating social cohesion in the country and promoting multiculturalism, providing a basis for stronger bilateral and multilateral relations with partners in Africa and the Indian Ocean.

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

C—Contribute to Solutions

What

Cultural and creative tourism development safeguards national heritage and improves visitor experience, generating higher tourism yield and repeated guest rates.

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.

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

Explore policy, regulatory and financial factors relevant for the investment opportunity.

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

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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

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country static map
urban

Seychelles: Greater Victoria

Victoria is the centre of creative and cultural activities in Seychelles.
rural

Seychelles: Rural Mahé

Lagoon areas and marine habitats might be used for a natural museum, preserving the site and extending knowledge of Seychelles's biodiversity.
semi-urban

Seychelles: Praslin

Vallée de Mai Nature Reserve, a UNESCO World Heritage Site, is located in Praslin.
rural

Seychelles: La Digue

L'Union Estate Park, a former coconut and vanilla plantation located in La Digue and offers various learning experiences.
rural

Seychelles: Outer Islands

Outer Islands accommodate one resort for each island which may develop a creative exhibition, island museum, and learning experience.

References

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