(Bloomberg) -- Mauritius’ tourism industry, the main economic driver in the Indian Ocean island nation, is heading for a slowdown in arrivals and revenue in 2024 as revenge travel fades and global competition stiffens — a concern for the local economy with the potential to offer great values for visitors. 

Up until last year, tourism figures on this secluded African island, known for its pearlescent beaches and luxury resorts, painted a picture of sustained post-pandemic growth. In 2023, gross tourism earnings rose by a third to 86 billion rupees ($1.84 billion) compared with 2022, according to the Port Louis-based Bank of Mauritius, and the number of visitors rallied 30% year-on-year to almost 1.3 million during the same period. December arrivals reached 149,145, the second highest since the end of 2019.

That has made tourism a major contributor to economic growth in Mauritius, driving expansion to 7.1% last year, down from 8.7% in 2022. 

Now, the industry may be starting to plateau, with the Treasury predicting that the $14 billion economy — led by the hospitality sector — will only grow by 6.5% in the current year. Arrivals are forecast to reach 1.4 million, at par with the level in 2019, before the coronavirus pandemic grounded the travel and tourism industry. 

The cause, according to Jocelyn Kwok, chief executive officer of the association of hoteliers and restaurants, is increased competition from other destinations like the Maldives and Zanzibar (which carry more prestige for global luxury seekers) or Dubai and the Dominican Republic (which offer more convenient flight access to a wider number of visitors). 

“Revenge travel is now fading quickly,” Kwok says in e-mailed comments. “With increasing competition from other destinations also set for recovery, our price and market competitiveness will be seriously challenged.”

For consumers this may open an opportunity for value, which has been difficult to find in the world of five-star accommodations. Looking ahead to Mauritius’ high season, which spans from October to March, many of the country’s best resorts are offering 20-25% discounts from their typical rates, according to data from Google Hotels.

Read more: How $1,000-a-Night Hotel Rooms Became a New Normal in Travel

The deals are most pronounced just before high season begins. A night at the Four Seasons Resort Mauritius at Anahita, which is made up of 136 capacious villas on a private island and is among the country’s most expensive hotels, is currently available starting from $595 per night this September, 19% less than normal. Another luxury hotel, Lux Le Morne, is on offer from $265 per night, which Google says is 33% less than usual.

That reflects a downturn from a sustained post-pandemic recovery that began with the reopening of borders in October 2021. Mauritius benefited from the “revenge travel” phenomenon as the country has long been seen as a destination that doesn’t “carry risks” for any traveler, says Kwok. That reputation extended to a new definition of safety connoted with wide-open, uncrowded outdoor spaces — which applies to a majority of the country’s beaches.

“Post-Covid travelers were looking for safe destinations. Mauritius is in that group,” he says in e-mailed comments. “Of course luxury resorts have an influence. Quality is the main attribute.”

The two-year rally boosted revenue and profits for hotel groups in the luxury segment. New Mauritius Hotels, owner and manager of eight 5-Star and 4-Star hotels in the country, said revenue reached a record of 14 billion rupees in the year through June. And Lux Island Resorts’ sales for the half-year through December rose 21% to 4.6 billion rupees.

While occupancy rates are pacing favorably for the first half of 2024, the country will face tougher competition compared with the past two years as the second half approaches. In particular, Kwok says, the country is losing visitors to the Maldives, where hotel rates are higher but are packaged up with more affordable airfares and shorter flights, with trips spanning a shorter period of time — typically 8 days, rather than the 10-day packages commonly sold for Mauritius. He calls the Maldivian offers “aggressive competitors.”

“It is going to be a very interesting year,” Kwok says. 

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