Mauritius’ hospitality sector continues in the red
Mauritius-based Sun Resorts and Lux Island Resorts are two world-class, resort-led hospitality majors which reported continued losses in core business operations last week. (Image: Sun Resorts)
Facing a difficult period, losses have intensified in the island economy’s hospitality sector and this sector continues in the red as 2013 too failed to bring cheer.
The hospitality sector is considered to be a key driver in the economy of Mauritius and it acts as an important source of foreign exchange. However, major hotel chains are reeling under a slower recovery in the European source markets after the euro zone debt crisis.
Mauritius-based Sun Resorts and Lux Island Resorts are two world-class, resort-led hospitality majors which reported continued losses in core business operations last week.
However, unlike Lux Island Resorts which reported a lower quarterly loss on Thursday than a year earlier, Sun Resorts has punched in a worse performance for the first nine months of the year than the corresponding period a year-ago.
Hit by poor performance from one of its resorts, the Sun Resorts recorded Rs 405.5 million on pretax loss in the nine months to September 30, 2013 against a loss of Rs 289.88 million in the same period in 2012.
Hotel Amber, situated on the east coast of the island, is one of the main contributors to the loss incurred by the Sun Resorts hotel groups.
Loss per share for Sun Resorts is estimated to have widened from Rs 2.29 to Rs 3.61. After the results announcement on Thursday, shares remained at Rs 37.20.
On the contrary, Lux Island Resorts, with assets in the Maldives and Reunion, said its loss per share had improved from Rs 1.42 to Rs 0.90, as it narrowed quarterly losses and appeared to be on a slow but steady path to recovery.
Its sunny side up for the outlook on Sun Resorts though. Factoring in future bookings, occupancy rates can be expected to improve in the fourth quarter. Room rates, though, remain under pressure from competition.
Overall, the Mauritius hospitality sector faces a number of external factors such as a growing mismatch between increasing room supply and declining demand by tourists, especially due to limited air access. The high airfares are not competitive with other beach destinations and results in widespread deep discounting of hotel rates, penalizing the hospitality sector.