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New Mauritius Hotels Expects Lower Profit as Flights Cut

New Mauritius Hotels Ltd. fell to a 3 1/2-year low after Chief Executive Officer Herbert Couacaud said the nation’s largest leisure operator expects worse results for the next five quarters as flights are dropped.

Profit for the year through September will be lower than the 726.6 million rupees ($24 million) reported a year earlier, Couacaud said in a column published in BeachNews and e-mailed today. Fewer flights to the Indian Ocean island nation and a rising number of rooms is straining the tourism industry, Couacaud wrote.

Tourism, with textiles, is Mauritius’s largest earner of foreign-currency income. Air Mauritius Ltd. in May suspended flights to Milan and will stop service to Frankfurt and Geneva on Aug. 31. More routes will be cut this year, it said April 24.

“We don’t know what they will be replaced by,” he wrote. “It is therefore reasonable to expect a decline in tourist arrivals for the second half of 2012.”

The Curepipe-based company, which owns and manages eight resorts in Mauritius and one in Seychelles, said on Aug. 7 its third-quarter loss widened 33 percent to 177 million rupees.

Mauritius’s tourist arrivals rose 0.5 percent to 467,153 in the six months through June. Statistics Mauritius expects a 1.6 percent gain this year.

Low-Cost Sales

New Mauritius Hotels forecast a more difficult and “less profitable” year through September 2013 from its domestic operations, Couacaud said. At group level, the drop in income will be offset from the sale of villas in Morocco.

“The Mauritian destination is caught in a dangerous downward spiral,” Couacaud said. “It is paying the price” of low-cost sales that have “transformed the country into a discount destination with a loss of identity, prompting tour operators to look for other destinations to seek growth.”

New Mauritius Hotels lost 3.2 percent to 60 rupees, the lowest since Feb. 11, 2009, by the close in Port Louis, the capital. The stock is the worst performer on the 39-member Semdex Index of Mauritian stocks this month after Go Life International PCC, which has declined 38 percent.

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