Luxury hotels group New Mauritius Hotels (NMH), which operates under the Beachcomber brand, reported a fall in half-year profits by 1.25% to Rs 831.02 million, compared to a pretax profit of Rs 841.5 million in the corresponding 6 months last year.

This fall in profits, according to NMH, can be traced to the drop in tourism arrivals in Mauritius. Tourist footfalls to the island economy declined by 0.8% with the main market, Europe, shrinking by 4.3% at the close of the semester till March 31, 2014.

The negative contribution from associated companies and the increase in finance costs also adversely impacted the luxury resort chain’s earnings by some Rs 52 million which, together with the operating loss incurred in Marrakech, led to the downward spiral in pre-tax profits.

The company also reported a decline of 6.2% in the average revenue per guest due to a less favorable market mix, although an increase of occupancy of 11.6% was registered.

Further, the downward trend in average revenue per guest is expected to be reinforced with the closure of the Royal Palm Mauritius for renovation works as from May.

Compared to last year, group revenue for the semester grew by 4% to Rs 4.92 billion and post-tax earnings by 3% to Rs 796 million.

On future outlook, management noted that, as at March 31 this year, occupancy had grown by 7.3% and, Easter falling in April, occupancy as at June 30 should be up by some 10% over last year.

Overall though, operating results for the 3rd quarter are expected to remain at last year’s level, since the Royal Palm Marrakech, which started its operation on December 26, 2013, is expected to operate at a loss until all the rooms come into service and the rates are substantially revised upwards as from next October.

It may be noted that, already, the hotel which opened with a limited number of rooms and promotional rates, incurred a loss of Rs 24 million during that soft opening period.

Image (Beachcomber): This fall in profits can be traced to the drop in tourism arrivals in Mauritius, negative contribution from associated companies and increase in finance costs, together with the operating loss incurred in Royal Palm Marrakech.

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