St Helena Online

St Helena Online

The St Helena report and the gap in media

Do the maths, says economist: tourists equal millions (comments added)

The secret formula for St Helena’s future prosperity has been worked out by the island’s economist. And here it is:

30,000 x £150 x 7 = £31.5 million

Owen James says the prospect of air travel from 2015 offers scope to improve living standards “on a scale unimaginable without an airport.”

But he adds: “Until I did some simple maths, even I didn’t realise how achievable huge improvements could be.”

In his Economy Watch report, he says the island needs “two or three hotels” to provide enough beds to be able fly in a plane load of tourists every day.

The maths isn’t hard: 30,000 tourists a year, who spend £150 per day, for 7 days each = £31.5 million.

One or two large hotels would be able to accommodate 30,000 tourists annually, while £150 per day is very low spend for a high value location and not many people are going to come to St Helena for much less than a week.

So my maths is very conservative and even so it would more than double or treble on-island spending, meaning more money flowing through local businesses and into the pockets of local people.

The island needs to start making it happen, there isn’t much time, so let’s focus on what’s important and do it.”

Mr James issued his report shortly after executive councillors approved the island’s economic blueprints for the years ahead.

The Sustainable Development Plan outlines what St Helena wants to achieve over the next ten years: better jobs, wages, opportunities and public services. It also sets out challenging targets for education and health.  

The second document, the Sustainable Economic Development Plan, sets out a strategy for kick-starting an enterprise culture on an island that has lived on UK aid for decades.

It is launched under the slogan: “Small footprint, huge step forward.”

COMMENT:

Let’s hope the author is right. Does anyone have any reliable statistics as to the amount of employment that 500+ tourists a week can be expected to bring? 

I aasume the £150 a day includes the cost of hotel rooms. Presumably the hotels will be overseas owned, although they will generate some local employment, but it would be surprising if they did not bring in a fair number of short-term overseas staff in order to maintain international standards of service.

Most of the food and alcohol consumed by the tourists will have to be imported, some of it directly I imagine by air to provide the fresh food that modern tourists expect, and therefore with a minimum of benefit to any St Helena based business. 

I don’t doubt that some will do very well out of all this, and the island will certainly get a boost from all the initial capital investment involved in building hotels and airport, but I suspect that the major profits will go to airline and hotel companies based outside St Helena, and that like the current expatriates’ salaries, much of that £31.5 million will not be spent in St Helena.  I do expect, though, that property prices will increase, that more members of the diaspora will be encouraged to return home and buy or build a house for their retirement, and that St Helena may become an attractive retreat  from the African continent for those with executive jets.

John Tyrrell
www.johntyrrell.blogspot.com

I’m thinking that if we have a “huge step” concentrated into a “small footprint” then that means somebody will be under a lot of pressure (like the elephant in stilettos from my school physics exam).  🙂

John Turner, St Helena
www.burghhouse.com

LINKS:
Economy Watch April 2012
Sustainable Development Plan (the island’s top-level planning document)
Sustainable Economic Development Plan (the strategy for boosting the private sector)

SEE ALSO:
Don’t blow our golden chance, says economist
Relying on tourism poses economic risk, warn territories
St Helena Government may sell of Solomon’s shares

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