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SEuo Tome & PrE[degrees]ncipe& Cabo Verde - Microstate SEuo Tome looks to tourism.

Summary: SEuo Tome and PrE[degrees]ncipe can learn the tourist lessons -- both good and bad -- of fellow Portuguese-speaking island nation, Cabo Verde.

The challenges facing the microstate of SEuo Tome and PrE[degrees]ncipe are typical of small states around the world: high per capita run- ning costs for all institutions, a narrow economic base and a lack of international influence.

Its government had banked on the discovery of oil but this has so far not materialised and so it is turning its attentions to tourism. The potential is mas- sive but infrastructure is lack- ing and there are too few air services to the rest of the world.

The economic reality of most island microstates is one of resource and financial poverty rather than the sun- and-sea idyll portrayed by tourist industry marketing. Their small populations create tiny markets that are often too limited to attract the at- tentions of large corporations, so too many goods have to be imported from other coun- tries, often at high cost. This can leave them dependent on a very small number of agricul- tural exports and overseas aid.

One of the biggest exports of such countries is people; but it tends to be young adults with the best education and most drive who quite literally 'get up and go'. Many generate in- come in the form of overseas remittances, but such outward migration is not good for the long-term economic develop- ment of a nation.

Cabo Verde and SEuo Tome and PrE[degrees]ncipe are two of the biggest exporters of human capital in the world per capita. In SEuo Tome and PrE[degrees]ncipe, for example, net emigration has averaged 0.9% a year over the past five years, according to the UN. If the same volume of peo- ple left every year for 110 years there would be no one left.

There are few economic op- portunities on the two islands and land degradation has af- fected the cultivation of its tra- ditional principal crop, cocoa.

Even if oil were to be dis- covered, this industry would offer relatively few jobs to the residents of SEuo Tome and PrE[degrees]ncipe, while tourism tends to create lots of employment. The country can offer many of the same attractions as other tropical islands, including year- round warm weather, beaches, attractive diving and snorkel- ling, and a relaxed pace of life. In addition, it is not as distant from major population centres as many of the Pacific Islands and does not face the hurricane threat of the Caribbean.

Yet it faces two very difficult and closely linked challenges: it is completely unknown to almost all potential visitors and has very limited transport connections to the rest of the world.

The lack of flights serving the islands makes it difficult to attract visitors, while air- lines lack the incentive to put on more flights because of the scarcity of tourists.

The only airlines serving the country are TAP Portugal and TAAG Angola, which run weekly flights. As a result, 55% of all visitors come from Por- tugal, followed by 22% from Angola. Some investors in the country have also criticised the poor standards of service, while SEuo Tome city is full of crumbling buildings and pot- holed roads. The standard of healthcare is low, so interna- tional holiday companies are reluctant to become involved.

Starting on PrE[degrees]ncipe An obvious place to start to break this vicious cycle is by targeting high-net-worth tour- ists, who are attracted by going to new destinations that have not yet been opened up to mass tourism.

PrE[degrees]ncipe has attracted the attentions of the company Here Be Dragons (HBD), which is owned by South African bil- lionaire Mark Shuttleworth, perhaps best known as the first African in space. One luxury centre with 48 bungalows has already been developed and others are to follow. HBD has also helped upgrade the island's runway and is trying to rein- vigorate cocoa, coffee and va- nilla cultivation on the island, as part of what it views as eco- development. It plans to employ 700 people, 90% of them locals, on an island with a population of just 6,000.

Such investment could help to put the country on the tour- ist map. Both Cabo Verde and SEuo Tome and PrE[degrees]ncipe tap into anticipated growth in the African tourist sector, both from overseas visitors and from more prosperous Africans keen to explore other parts of their own continent. The United Nations World Tourism Organ- isation forecasts that the num- ber of tourists visiting African countries will increase from 54m in 2015 to 134m by 2030.

SEuo Tome and PrE[degrees]ncipe at- tracted more than 18,187 tour- ists in 2014, the latest year for which figures are available, a 24.6% rise on the previous year. The country is also starting to attract the attentions of niche travel agencies, most nota- bly Archipelago Choice. Ian Coates, the company's man- aging director, is enthusiastic about the country's potential, including its beaches and the 20 big cocoa estates. Two of the latter have already been rede- veloped to attract foreign visi- tors and Coates says that they could become SEuo Tome and PrE[degrees]ncipe's unique selling point.

If properly managed, the benefits of tourism are huge.

Cabo Verde has transformed itself into a middle-income country, partly on the back of tourist revenue. On top of its climate and natural beauty, it is politically stable, just five hours flying time from much of Western Europe and there is little jet lag because it lies in Greenwich Mean Time. This is not to suggest that all is well in Cabo Verde's tourist indus- try. Some independent hotels and restaurants on the islands struggle. Many of the hotels in Cabo Verde are all-inclusive resorts, where most well-paid staff are Europeans and visi- tors spend little time outside their resort.

The government of Cabo Verde has had to introduce a e1/425-a-day visa in order to generate more income from the sector. A lot of apartment blocks have been built for visi- tors but many stand empty be- cause flights to the islands are dominated by holiday compa- nies connected to the all-inclu- sive resorts, which don't want to supply visitors for independ- ent hotels. As a result, buying flights to the islands separately from holiday packages is very expensive.

Speaking of tourist develop- ment on island microstates in general, Coates says: "The only way they can survive is to make sure that they are not exploited. People in sharp suits turn up and make them feel special. Governments underestimate what their assets are worth." There are certainly plenty of pitfalls in pursuing tourist de- velopment but SEuo Tome and PrE[degrees]ncipe can learn from lessons that have been learned the hard way elsewhere.

Governments underestimate what their assets are worth.

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Publication:African Business (Al Bawaba (Middle East) Ltd.)
Geographic Code:6CAPE
Date:Apr 30, 2017
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