The Seychelles Ministry of Tourism and Culture gave a thumbs up to the Constance Ephelia Resort for doing well in spite of difficult times.
Alain St.Ange, the Minister for Tourism and Culture, echoed the statement to Andrew Milton, Chief Operations Officer of the Constance Hotels and Resorts, and his management team.
Minister St.Ange was at Constance Ephelia Resort as part of his ministry’s ongoing door-to-door visits at small and large hotel establishments on the northwestern coast of Mahe on Friday, July 10.
Constance Ephelia Resort and a number of home-grown small Seychellois establishments were visited by Minister St.Ange and his delegation on that day.
Minister St.Ange congratulated Constance Ephelia Resort, one of the largest high-end properties of the islands, for “running a good hotel.”
“It is clear to one and all that you have a good tourism establishment, and that it is running well. Today, you are recording more than a 90% occupancy rate, and you’ve done well even in difficult times.”
Minister St.Ange reassured Constance Ephelia Resort that the Ministry of Tourism and Culture would stand by the islands’ hotels and resorts, for them to keep on performing their businesses and for the benefit of the Seychelles.
“Let us remain united as an industry. Let us remain solid as a group of hotels that continue to work for the consolidation of the Seychelles tourism industry. As a ministry, we will open doors for you, and we remain committed to work to help you grow,” the Minister said.
Minister Alain St.Ange also appealed to the management of the Constance Ephelia Resort to continue to work to create the most conducive environment for its workers. “You are a company with a very large number of employees, and this will keep you in the limelight. It is, therefore, important that the resort’s senior management team remains always accessible to their own staff and that they appreciate the need to be ambassadors at all times for their resort. We continue to ask that the laws of Seychelles are always respected and that the foreign management team shows respect to the local workforce. When laws of the country are broken, it’s the resort’s name that is tarnished,” Minister St.Ange said.
The minister also urged the management team of the resort to continue to work hard to ensure that their resort remains a key part of the islands’ tourism industry.
“Seychelles has only one tourism industry. We need to work together to achieve continued success. Government has been committed to the public/private partnership we now have, but for all success, we all need to accept that we do not have a tourism industry that belongs to the government and another one for the private sector. We have but the one tourism industry, and it is together that we shall consolidate it for the long term,” said Minister St.Ange.
On his part, Andrew Milton, Chief Operations Officer of Constance Hotels and Resorts, said the resort’s future is bright.
“We are working to make this product a success in Seychelles. I think the future here is bright for the resort,” said Andrew Milton, Chief Operations Officer of Constance Hotels and Resorts.
Minister St.Ange; Anne Lafortune, Principal Secretary for Tourism; Sherin Naiken, Chief Executive of the Seychelles Tourism Board, again had the opportunity during this stop of their door-to-door of hotels to tour the property. Accompanied by Jean-Marc Lagess, the resort’s General Manager; Mathias Colombat, Resident Manager; and Viana Roucou, Human Resource Manager; along with Minister St.Ange and his team met the workers on duty in most of the departments. He discussed often privately with them opportunities available to them and the challenges they currently faced.
CONSTANCE EPHELIA RESORT FACED WITH REVENUE AND COST CHALLENGES
In 2010, Constance Hotels and Resorts opened its first property in Seychelles – Ephelia Constance Resort at Port Glaud.
When the resort opened its doors with 42 villas, it was an investment worth making by Constance Hotels and Resorts.
Today, with a workforce of 754, the resort is employing 480 Seychellois. The resort’s GM confirmed that 325 team members lived on the property itself. Ephelia Constance Resort is faced with the challenges to fill the resort at a room rate which secures viability in the current climate.
Andrew Milton, Chief Operations Officer of Constance Hotels and Resorts, said Constance Resort now needs to focus on cost reductions to maintain its operations.
“We need to focus on cost reductions, as the top line revenue is difficult to increase. On the revenue side, our major challenge is to fill the resort at a net daily room rate closer to what is required to service all our commitments at an occupancy level of say 70%. Currently, we will end the year short of this rate.”
Mr. Milton said fluctuation in the Seychelles foreign exchange rates is impacting the hotel’s operation costs.
“In November 2014, the euro/rupee exchange rate was 17.2 vs. 14. 2 in 2015. In addition, the US dollar and euro are converging towards parity, affecting our operating costs significantly since our costs (payroll and consumables, etc.) are mostly dollar/rupee based. We have implemented many cost-cutting measures throughout the resort, but these have not been sufficient to compensate for the cost increases in the euro/rupee terms. The reduction in energy prices in dollar terms has, however, provided some relief to the resort.”
He added that Constance Ephelia Resort is not forecasting any future growth in its room rates.
“In the present climate, our profitability is affected, as costs are increasing, and we see no growth for the foreseeable future in our room rates. We are fighting to achieve an overall profit this year, but it will be a small one and will be achieved only if we can continue to fill the resort’s occupancy in the high 70s. This is, however, going to put huge pressure on the workforce which is already stretched and tired due to many unfilled vacancies. The standard of the resort is suffering because of the long delays to fill the vacancies even though the staff local versus ratio is being respected,” Mr. Andrew Milton said.
“The resort will achieve occupancy rates in the high 70s for 2015. It must be stressed that this level of occupancy has been achieved at a room rate which is far from ideal and forced on the resort by international competition. It will, therefore, not translate into a healthy bottom line, especially at a time when the euro/rupee cost base of the resort has increased significantly (over 20%). Currently, we do not have the option of passing the increased costs to the clients.”
He also spoke about Constance Ephelia’s ongoing challenges to secure GOPS.
“The current difficulty in securing GOPs has added to the operating pressure and causing issues of service delivery quality. The high occupancy level is also putting stress on the infrastructure as the usual preventive maintenance cycle cannot be performed as per standard schedule,” Mr. Milton said. The Seychellois workforce spoke to Minister St.Ange about vacancies not being filled as expatriate team members’ contracts ended, and that this was resulting in them having more pressure on a day-to-day basis.
Despite the challenges, Constance Hotels and Resorts said it will continue to strive to offer an exceptional product despite the revenue and cost challenges.
“We understand the importance of our operations to the overall economy and carry this responsibility with total seriousness. We believe that we have to work even closer with the authorities (re-looking at taxes and operational costs) to build financial resilience and to continue to improve the product in this difficult operating environment. We welcome the resumption of direct flights to Paris and look forward to welcoming more HNW European guests to our property in order to improve our overall room rate, and restore sustained viability so that we can pass some of the benefits to our colleagues and the community at large,” said Andrew Milton, Chief Operations Officer of Constance Hotels and Resorts.
Minister St.Ange said as he addressed the resort’s management team that he had heard directly from staff members of the challenges they faced and asked management to follow-up on points discussed.
Seychellit on Kansainvälinen matkailukumppanien koalitio (ICTP) .