Illegal tourism business overlooked by the State
OFFICIAL figures, released by the National Statistics Bureau confirm that only two-thirds of visitors to Seychelles stay at licensed establishments. Besides some who stay with relatives, the others stay mostly in illegal and unlicensed houses.
The great majority of these visitors are boarded by people who are either foreigners who have purchased houses in Seychelles and now use them to do tourism business or expatriates who have obtained Seychellois citizenship.
Most of these illegal operators are well-known to both the Seychelles Licensing Authority (SLA) and the Seychelles Tourism Board.
They are mainly Italians, Germans, French and Russians among the main culprits. Most of the new five-star hotels also have a certain number of villas for sale to non-Seychellois at prohibitive prices. When these are unoccupied, these are often rented out to visitors.
Now they have been joined by the biggest culprits of all - the villa owners of Eden Island and its management.
It is hoped that the new CEO of the Licensing Authority, Mrs. Maryse Berlouis will move against the unlicensed operators.
As for the STB, its new head, Mr. Alain St Ange has said: “Villa developments will need to be managed and adequate legislation looked at to ensure they do not become just de facto hotels because of owners renting them on to friends, and the country benefits nothing... as licensed hotels lose potential clients.”
The Seychellois and other licensed hotels are paying license fees, GST and other charges. The foreign operators are just feeding on the Seychelles economy, often sitting in Europe and living off free business in Seychelles, with no taxes or license.
Very soon, there will be no business and no place for the small guesthouses and hotels.
What makes it worse is that some villa owners have not even invested any money of their own. After borrowing from offshore banks based here in Mahe, they then rent out the villas and repay the loans. What an easy way for expats with nothing to acquire a good business!
In contrast, the poor little Seychellois trying to get a license to operate a guesthouse or small hotel is being asked to comply with so many conditions some which are often ridiculous... Recently a Seychellois who wanted to convert his flats into self-catering tourism accommodation was told it could not approve because there is no place designated for fish cleaning. Are there any fish cleaning units at the hotel villas? It is well-known that tourists don't clean fish, but buy those already cleaned or filleted.
As Minister of National Development, Jacquelin Dugasse, stated in the National Assembly's Question Time, that Eden Island is not allowed to rent according to their agreement- So why are the villa owners being allowed to rent? Is it so difficult to control this? Who is collecting bribe money for these illegal operations?
Eden Island management is itself renting out villas from their pool on behalf of the owners and obviously receiving a commission.
Does Eden Island management have a Real Estate or Commission agent license? Is it declaring the commission and paying taxes?
It is alleged that Eden Island is even renting houses on Mahe for accommodating the clients when the Eden villas are full.
The villa owners, who are not in the rental pool, are renting out privately. Are they declaring the income from tourists for tax purposes? And those renting out to local companies long-term- are they paying the 15% GST? Which every Seychellois owner pays in rental tax?
There are some persons, including a well-known man of French /Caribbean origin who is looking after 3 villas for their absentee owners and also managing several yachts. This man is virtually renting a small hotel and yachting business from Eden Island.
While the murky business is going on, guesthouse and hotel owners are being badly hit by the unfair competition. Seychellois, who have invested in rental properties, now find they cannot rent their houses because the large hotels are renting out so many villas. When we complain and fight for our fellow Seychellois who has made untold sacrifices to keep the tourism industry alive in turbulent times - we are accused of xenophobic by the Head of State….this guy needs his head tested this is what we say!!
Source: Lenouveauseychellesweekly 8-1-10