Seychelles' economy rebounded strongly in 2010, with real GDP growing by 6.2% according to the IMF, underpinned by a record year for tourism (which accounts for about 25% of GDP), strong foreign direct investment (FDI), macro-economic stability following deep reforms and the strengthening global recovery. Visitor numbers climbed by 11% to 174,529 in 2010, an all-time high-and well ahead of the previous peak of 161,273 in 2007-helped by new hotel openings, more competitive pricing and more frequent flights to the archipelago, despite the currency strengthening somewhat in 2010. Combined with a slight increase in the average length of stay to 10.4 days in 2010 (another record), the total number of visitor nights rose by 17%. Tourism earnings (narrowly defined) followed a similar trajectory, rising by 22% in rupee terms to SRs2.45bn and by 32% in US dollar terms to US$203m-giving a significant boost to the economy.

Arrivals from Europe grew relatively slowly, by 8% to 131,589 in 2010, held back by continued economic weakness within the euro zone, which cut Europe's share to 75% (from 77%). Arrivals from the Americas fell, but those from non-traditional destinations grew rapidly, especially Africa (up by 20% to 22,353, a 13% share) driven by South Africa and Reunion, and the Middle East/Asia (up by 34% to 15,534, a 9% share) driven by the United Arab Emirates and India. By country, the six leading markets in 2010 were France (35,026, up by 12%), Italy (25,602, down by 2%), Germany (21,314, up by 8%), the UK (12,390, up by 10%), South Africa (10,425, up by 27%) and Russia (8,942, up by 10%). Preliminary figures for 2011 show that growth in tourism remains brisk, and arrivals were 12% higher in January than a year earlier.

Adding to Seychelles' appeal, Saudi Arabia's Kingdom Hotel Investment opened a new super-luxury resort on Praslin Island in February under the Raffles brand and management. The US$145m development boasts 86 villas including residential property for sale (with a minimum US$3.5m price tag). Separately, the Hilton group has taken over the 110-room Labriz resort on Silhouette Island (the archipelago's third largest) and plans to reopen in March after refurbishment. Labriz becomes Hilton's second property in Seychelles, alongside the Northholme hotel on Mahé (the main island). Meanwhile, South Africa's Wilderness Safaris sold North Island (and its tourist villas) to a Cyprus-registered Russian outfit, Groval Holdings, for US$47.5m in late-2010. The IMF estimates that FDI, which is primarily directed towards tourism, surged to a record US$411m in 2010 (a massive 44% of GDP) from US$223m in 2009, which helped to finance the current-account deficit.

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