In 2019, 1,383,488 tourists had visited our island with earnings of Rs 63.1 billion. In 2020, as our borders closed, 308,908 tourists had visited our island (decline of 77.7%) while earnings fell by 72% to Rs 17.7 billion in 2020.
With the opening of the borders, by the 15th of October 2021, an estimate of only 39,460 tourists had flown to Mauritius. Out of those, 30,000 that flew in October were foreigners. Most of those foreigners (80%) preferred staying in hotels.
The remaining 20% is in for the rental market instead of paying highly priced hotels. This demand for the rental market has been even more accentuated by the high air ticket prices and inflationary pressures. All these push factors are prompting tourists to look for the most cost effective but still efficient travel deals.
More than 85% of Mauritians are now first-time homeowners. The higher bracket found on the supply side of this market is now increasingly moving towards the buy-for-rent model. These second properties are as luxurious and comfortable as hotels.
However, the financial viability of this strategy in the evolving inflationary and interest rates environment is leading to negative real rental yields. The purchases are increasingly being met not by positive rental yields on the mortgaged second property but rather from the owner’s own pockets. Unsure if this remains sensical over time, especially in an environment where both expatriates are ever thinner and lower-bracket constructions get under way, fuelled by low interest rates and fiscal incentives/rebates.
Optimistically, the ideal scenario would be to attract 273,268 tourists in Q421 while the worst-case scenario would be to achieve 70,807 tourists by the end of this year. 2022 will however be the deciding year. An increase in tourists, will obviously mean an increase in the rental market. A higher demand matching the high supply might end up in a more stable rental market!
Mayfair has just delivered its latest project Pereybere IV. Up for renting a brand-new apartment located just a few minutes’ walk from the Pereybere beach and all other amenities? Available for short and long-term renting as from 1st December 2021.
Get in touch now with the Sunset Boulevard Team for more info on 5775 7652 or 5702 5153.