Tourism in Mauritius Prospects Challenges A Presentation to

Tourism in Mauritius Prospects & Challenges A Presentation to the Monetary Policy Committee Bank of Mauritius Sen Ramsamy Managing Director Tourism Business Intelligence 14 July 2014

T “ he positive results in world tourism show that it is time to position the sector higher up the world trade agenda so as to maximize its capacity to promote trade and regional integration” Taleb Rifai Secretary General United Nations World Tourism Organization

World Tourism International Tourism 29% of world export services 6% of overall exports of goods and services Rank 5 th after fuel, chemicals, food and automobile industry 2013 Tourist Arrivals worldwide Tourism Receipts worldwide - 1, 087 bn (5%) - US$ 1, 159 bn (5%) Growth in arrivals match growth in earnings

World Tourism by Region Arrivals Receipts (‘ 000) (US$ million) Worldwide 1, 087 (5. 0%) 1, 159 (5. 3%) Europe Asia & Pacific Americas Africa Middle East 563 (5. 4%) 248 (6. 2%) 168 (3. 2%) 56 (5. 4%) 52 (-0. 2%) 2013 489 (3. 8%) 359 (8. 2%) 229 (6. 4%) 34 (0. 0%) 47 (-1. 9%)

World Top Ten Tourist Spenders 2013 Country China USA Germany Russia United Kingdom France Canada Australia Italy Brazil US$ (billion) 129 87 85 54 53 42 35 28 27 25

Tourism in Africa 2013 Arrivals (million) Africa North Africa Southern Africa South Africa Botswana Mozambique Zimbabwe Kenya Uganda Swaziland Namibia Senegal Tanzania Mauritius 56. 0 20. 0 36. 0 9. 5 2. 3 2. 0 1. 8 1. 6 1. 2 1. 1 1. 0 (993, 106) Receipts (US$ billion) 34. 22 10. 24 23. 98 9. 24 0. 85 1. 18 1. 88 1. 32

Tourism in the Indian Ocean Region Destinations Comoros Madagascar Number Tourist Room of Arrivals Capacity Hotels 2008 N/A (2, 159) 350 Tourist Arrivals 2013 % 2013/ 12 Receipts Average 2013 Expenditure/ US$ Tourist 2013 (millions) US$ (18, 000) (25, 000) (13. 6) N/A (21, 525) 375, 010 196, 375 -22. 0 105 534 N/A Maldives 265 13, 050 683, 012 1, 125, 202 17. 4 2, 200 1, 955 Mauritius 114 13, 200 930, 456 993, 106 2. 9 1, 321 1, 330 Reunion N/A N/A 416, 000 -6. 8 404 971 Seychelles 247 3, 500 158, 952 230 000 5. 7 430 1, 870 Sri Lanka 620 16, 223 438, 475 1, 275, 000 26. 7 1, 715 1, 345 Tourist Arrivals January- June 2014 Destination No. of Visitors % Change Maldives 600, 000+ 12. 0 Mauritius 490, 697 4. 0 Seychelles 110, 870 -0. 02 Sri Lanka 727, 353 24. 6

Comparative Analysis Growth Rate in Tourist Arrivals – Jan to June 2014 Mauritius Europe France Italy UK Germany Spain Russia India China South Africa United Arab Emirates 0. 8 -4. 3 -6. 5 10. 5 2. 9 -0. 3 -14. 7 4. 2 86. 9 -2. 3 -4. 0 Sri Lanka 17. 0 30. 9 25. 5 7. 7 23. 0 55. 4 74. 8 23. 6 137. 0 30. 7 22. 3

Tourist Arrivals in Mauritius Sea 1952 1965 1968 1970 1975 1980 1985 1990 1995 2000 2005 2010 2013 746 647 365 554 470 920 1, 200 6, 105 10, 677 13, 321 23, 648 23, 165 Air Total 1, 550 9, 312 10, 058 14, 906 15, 553 27, 285 27, 650 74, 043 74, 597 114, 610 115, 080 147, 940 148, 860 290, 350 291, 550 416, 358 422, 463 645, 776 656, 453 747, 742 761, 063 911, 179 934, 827 969, 941 993, 106

Hotels & Room Capacity Building Year Hotels 1971 1975 1980 1985 1990 1995 2000 2005 2010 2011 2012 2013 2014 22 34 43 55 75 95 95 99 112 109 117 107 114 Rooms 811 1, 499 2, 201 2, 630 4, 603 5, 977 8, 657 10, 497 12, 075 11, 925 12, 527 12, 376 12, 653

Tourism For Wealth & Job Creations Year Employment Earnings Average Spend (Rs mn) 1980 - 360 1985 4, 650 845 1990 9, 670 3, 630 1995 13, 855 7, 472 2000 17, 433 14, 234 2005 25, 377 25, 704 2010 27, 161 39, 457 2011 28, 181 42, 717 2012 28, 433 44, 378 2013 28, 356 40, 557 2014 N/A 44, 500 (Rs) 3, 128 5, 676 12, 005 17, 687 21, 683 33, 774 42, 208 44, 283 45, 967 40, 839 43, 204

Brand Positioning 80 s-90 s - Mauritius, The Most Cosmopolitan Island in the Sun 2009 - Mauritius, C’est un plaisir 2010 - Mauritius, Simply Divine 2011 - Mauritius, C’est un plaisir 2014 ? ? ?

Tourism Development in Mauritius Institutional Level Plus Points Market Diversification - China Direct Air Links from China Modern Airport Terminal New (and scenic) Road Infrastructure Negative Points No restructure of the MTPA No professional body for air access policy/planning/management No professional hotel classification system No synergy (public and private) to shape a better future for tourism No clear vision

Factors constraining Growth & Profitability – – – – Constant room capacity expansion Poor market visibility Poor destination planning (mushrooming of eyesores in tourist zones) Lack of air seats A primarily euro-centric and ageing tourism product - 3 S’s Mismatch between product offering and new customer expectations Declining service standards Change in visitor profile, behavior and spending pattern Increased competition and price war Stifling all-inclusive packages in hotels Product Mix - more of the same (hotels, entertainment, shopping etc) Lack of tourist safety & security (a culture of greed and easy money) Low room occupancy rates and low revenue Decline in tourism receipts and average tourist spending Low business profitability Unprecedented level of hotel indebtedness

Tourism Development in Mauritius A 60 -year old Business Model

Shaping a New Vision for Tourism Mauritius Tourism – at a cross-road …for too long From Hotel Industry to Tourism Sector Tourism Business Transformation Plan Tourism Market Consolidation and Diversification Adding Value to the Blue Economy A New Business Model for Mauritius Tourism Vision 2030

Future Tourism Development Potentials Mauritius/Rodrigues/Outer Islands

Reconnecting with Growth & Profitability • • Steering with a sense of direction Professionalization of tourism institutions Synergy – Public/Private Sectors Local Authorities - Tourism Development Agenda More creative and diversified product mix Innovative actions in destination marketing Use of local talents and expertise Putting the right people in the right place

Investing in the Future Mauritius Geo-Strategic Position in the Indian Ocean basin Gateway to Vanilla Islands Bridging the New Africa & the Emerging Economies

Mauritius – In a Geo-Strategic Position between the Emerging Economies and the Rising Africa

Mauritius Tourism - Tomorrow Beyond Sun, Sand & Sea Stimulating a new tourism business vitality in the region Air access Regional Trade Centre Maritime City Aviation Hub Summits & MICE Lifestyle & Fashion Wellness & Sports Medical Tourism Culture & Heritage Events & Concerts

Mauritius Tourism Towards a New Vision …a New Image Leadership Role in the Vanilla Islands concept Ile Maurice - Destination Bien Etre Mauritius, The Art of Island Living Mauritius – Lifestyle Destination Mauritius … Cordially Yours !!!

Synergy – Public & Private Sectors Clear & Long Term Vision Strong Leadership ‘Audacity of Dreams’ ‘Audacity of Actions’

Thank You