The Mauritian rupee’s gains against the euro will probably reduce tourism income this year by more than it did last year, said Jocelyn Kwok, chief executive officer of the country’s hotel and restaurant association.
Revenue has fallen by about 600 million rupees ($20 million) in the first five months of 2012 due to exchange-rate losses, Kwok, who heads the Association des Hoteliers et Restaurateurs de l’Ile Maurice, said in a mobile-phone interview today. Losses were estimated at 770 million rupees in 2011 and about 2 billion rupees in 2010, he said.
The euro, which accounts for 62 percent of the industry’s foreign currency income, has fallen 1.7 percent against the rupee this year, according to data compiled by Bloomberg.
The European debt crisis has cut the number of people vacationing on the Indian Ocean island nation. Arrivals were 0.2 percent lower for the four months through April, according to government data.
Tourism and textile exports are the largest foreign currency earners in the country. New Mauritius Hotels Ltd., Sun Resorts Ltd. and Lux Island Resorts Ltd., the country’s three biggest leisure operators, have a combined weight of 10.7 percent in the 38-member SEMDEX index. Air Mauritius Ltd., sub-Saharan Africa’s fourth-biggest airline, is the second-worst performer on the index this year, with a decline of 31 percent.
“The risk looming on the tourism industry has increased with the euro trading at such low levels against the rupee,” said Kishen Nadassen, a senior research analyst at the Port Louis-based Cim Stockbrokers Ltd., in a phone interview. “The weakness could drive hotel stocks further down.”