Factors Influencing Demand for Hotels in Mauritius Island.

Introduction
Surrounded by white, sandy, spotless beaches enclosed by safe turquoise lagoons,
Mauritius are well known for his wide range of small and medium-sized hotels where
one can experience a cosy atmosphere with a unique view.
Mauritius Island first hotel was the Park Hotel in 1952 for the purpose of
accommodating the crew members coming at that time. Then came the Mauritius
Hotel, the first beach hotel, constructed in 1954 at Le Morne followed by Le
Chaland, another beach hotel in 1961.
Tourism become the third pillar of the economy after manufacturing sector and
Agriculture, contributes significantly to economic growth and has been a crucial
factor in the overall progress of Mauritius.
Mauritius is mostly a holiday destination for the famous beach-resort tourist. It owns
a range of natural and man-made attractions where they can enjoy a sub-tropical
climate with clear warm sea waters, attractive beaches, tropical fauna and flora
accompanied by a multi-cultural inhabitant that is welcoming and welcoming.
Mauritius is mostly a holiday destination for the famous beach-resort tourist. It owns
a wide range of natural and man-made attractions where they can enjoy a sub-
tropical climate with clear warm sea waters, attractive beaches, tropical fauna and
flora accompanied by a multi- cultural inhabitant that is welcoming and welcoming.
These tourism resources are the main strength.
Nowadays, compared to many developing countries, in Mauritius local hotel groups
such as Beachcomber, Constance Hotels, Lux Resorts and Sun Resort among others
hold at least a 70% share of the market with 2,077 and 1,262 rooms respectively in
2012 .The private sector in Mauritius is represent through various sectorial groups
mainly the Association des hôteliers et restaurateurs de l’île Maurice which was
founded in 1973 and the Association of Inbound Operators Mauritius founded in
1992. It is believing that “Tourism is everybody’s business”

Nowadays, compared to many developing countries, in Mauritius local hotel groups

such as Beachcomber, Constance Hotels, Lux Resorts and Sun Resort among others
hold at least a 70% share of the market with 2,077 and 1,262 rooms respectively in
2012.
Mauritius’s Number of Hotels data was reported at 111.000 Unit in Mar 2020

Hotels also as any other businesses, they are experiencing various external pressures
from communities, competitive forces and as well as the governmental regulations.
Analysis of demand is fundamental to a firm’s profitability. Demand refers to the
quantities that people are or would be willing to buy at different prices during a given
period, assuming that other factors affecting these quantities remain the same.

Description and Characteristics of Hotel

In terms of hotel offerings, Mauritius are characterized by an expanded supply,

ranging from midscale business hotels to luxury resorts and boasting the largest
presence of international hotel groups of any country in Africa. Amongst these are
brands such as Rezidor, Starwood/Marriott (with several brands), Accor, Hilton,
IHG, Lux, Four Seasons, One&Only, Club Med, RIU, Outrigger, Shangri-la,
Beachcomber, Oberoi, Angsana, Constance, Attitude and Veranda.
Price and Quantity Demanded
The economic theory of consumer demand tells us that price and quantity measure
are inextricably linked. In hotel markets, periodic Average Daily Rate (ADR) is the
price; and ADR largely determines how many rooms are sold during that period and
the quantity demanded also.
A change in the factors such as people income, government policies in Mauritius,
climate condition etc will cause a movement along the demand curve for Hotels.
Exhibit 1: Hotel Demand Curve
Exhibit 1 graphically presents the demand curve found in introductory economics
texts augmented here to reflect hotel price and quantity demanded. This curve (D 1)
has a negative slope to reflect the inverse relationship between ADR and rooms sold.

Exhibit 2: Perfectly Elastic and Inelastic Hotel Demand Curve

Exhibit 2 shows the extreme cases of perfectly elastic (D2) and perfectly inelastic
demand (D3) with respect to price. Moving up or down any of these curves shows
the number of rooms sold at a particular price.
Hotel in Mauritius have perfectly inelastic during peak season that is the beginning
of December and end of January. It implies that a given change in price does not
lead to any change in the quantity demanded for hotel rooms.
Exhibit 3: Shifts in the Hotel Demand Curve from Income Changes

In Exhibit 3, the hotel demand curve is presented under circumstances when incomes
of customer rise and fall. Curve D4 illustrates the scenario where only an increase in
income levels occurs, resulting in a shifting of the curve to the right.
Curve D5 illustrates the scenario where only a decrease in income levels occurs,
resulting in a shifting of the curve to the left. The elasticity of rooms sold with respect
to income specifies the quantity of how much demand is induced and reduced by
changes in income.
By knowing the elasticity of hotels, we can easily find out what the change in
demand will be given any future change in income or price by multiplying the
elasticity by that change in income or price.
However, the elasticity of demand for hotels will depend on a number of factors such
as availability of substitutes, the income level, the percentage of income people spent
on hotels, habits or degree of addiction people willing to go to hotels or the idea of
promotion on hotels.

Factors influencing demand for Hotels

Demand for a commodity can increases or decreases due to a numeral aspect. Below
are details how other factors determine market demand for hotels.
Income
The relationship between income and demand is one of the main concerns in
economics. The more income people get in their hands, the more they can afford a
stay in a hotel. People will select which hotel to stay according to their income. Since
hotels are not a necessary commodity for many people in Mauritius, middle class
will choose to make expenditure on essential commodities. We can witness that
Mauritius people book hotels mostly during the months of December where they
will receive their end of year bonus.

Government Policies
Government place policies like taxation and subsidies, which regulates demand for
various goods in the market. When the government increases the tax rate that leads
to decrease the purchasing power of the customer and demand for the hotel as well
can go down.
Mauritius government improve the economy by encouraging increased trade and
investment abroad which will result in an increase in the demand for economy hotel,
while investors are in business deal in the country.
Airlines
Air transport is an integral part of the tourism industry and tourism has an important
outcome on the sectors of hotel industry. Hotels accessibility in Mauritius has
evolved and became very much commercialized and developed. The availability of
a destination is an indicator for tourist entrances, which increases tourist revenues to
the country. The people who are interested in economy hotel accommodation
represent a large portion of traveler.

Advertising
Attractive advertising campaigns and credit facilities influence consumers to buy
more of a product and shift the demand curve outwards. Advertising help to reach
successfully hotel audience segment. If the advertising is aiming the correct audience
segment, then the effects on demand will likely be positive. For example, the
international online magazine, Alux, targets a premium audience that includes
luxury travel enthusiasts on a video. This informative video presents facts on
Mauritius and it talks about the Royal Palm Beachcomber Luxury Hotel, its beauty,
prices and the different rooms that are available.
Advertising help to describe the wide range of segments, namely families, couples,
weddings, sports, culture, heritage and adventure holidays, as well as catering for
the tastes of European, Asian and African tourists, has become more important than
ever.
Mauritius Hotels try to create a diverse social media marketing mix, with a
combination of text- based hotel advertising, web content, video content, billboard
throughout the country and on magazines.

Private Agencies
In the recent years, Mauritius also adopted the strategy of online hotel agencies for
the booking of hotel room. The most famous website in Mauritius are Marideal.mu
and Deal.mu and internationally we have well known agencies like Booking.com,
Yatra.com, Agoda.com Trivago.in and so many others They sell deal for hotels room
online by making special promotion package. They use eye-catching photography
of the hotels like the pools, restaurant, room and even the bath room. These agencies
add more value to hotels and increase demand for hotel rooms.

Substitute of Hotel
Bungalows, guest house and apartment has becoming the substitute of hotels in
Mauritius. They market it by providing mostly same facilities like hotels. They have
introduced breakfast, lunch and dinner facilities, towels, swimming pools, Wi-Fi etc.
The threat of hotels’ substitute depends on the customer’s willingness to substitute.
Habit forming
For certain people it has become a habit forming. Whether the price increase for
room hotel or fall they will continue to go at a hotel for their vacation or special
event like birthday celebration, honeymoon, wedding anniversary, christmas festival
or even for new year. Here the demand will be inelastic because a price change will
allow these customers to change their demand for a stay at a hotel.

Climate
The local climate in Mauritius is tropical, modified by southeast trade winds; there
is a warm, dry winter from the month of May to November and a hot, wet, and humid
summer from November to May. Changes in climate conditions may shift the
demand curve to the left or to the right. We witness an increase of demand during
hot summer and a fall in demand of hotels room from foreigners. Hotels prepared
special deal and packages for Mauritian citizen only know as winter promo. They
market the hotels room with Mauritian citizen which has been a successful strategy.
Hence, many local people grasp this opportunity to spends time in a hotel at an
affordable price with their beloved one despite it is winter.

Natural Calamity
Unfortunately, since end of 2019 till today all hotels are facing a severe drop at an
alarming rate because of the pandemic Covid-19. Travel are bans and containment
measures around the world are having a devastating effect on the tourism sector in
Mauritius. While many countries have started to ease their lock down measures,
potential tourists will be anchored down by travel restrictions, tighter budgets, and
health-related fears. Couples of hotels like So Sofitel hotel has been forced to close
down completely due to this crisis.
Conclusion
Hotel is that place where people stay with the best amenities without any worry.
They go to relax and take a break from their busy and routine to enjoy themselves
by relaxing in their private room without any disturbance. Such establishments offer
luxury and comfort, along with other benefits that make a trip enjoyable for everyone
that is involved in the staying. Many people are looking for a place to rest during a
weekend away. So, in that case, the hotel is the best option. Certain people like to
go for experiences such as; to taste delicious food and cocktail preparation,
experience of luxury, good services, spa, aqua activities or the unique animation at
hotels in the evening where they can experience as a full package for a weekend at
a hotel.
Hotel industries in each country is affected by both the local and global economy,
with some countries being more dependent on overseas visitors than others. The
demand forecast is therefore dependent on how well both the local and global
economy performs and grows.
Like most countries are adopting, certain hotel’s owners in Mauritius approach a
different strategy to cover their cost during covid-19 pandemic. Since all the hotel’s
room are empty, they turn it into a quarantine room which will provide some needed
revenue for the hotels.
According to the Africa Business Insight, hotels in Mauritius have been extending
discounts over the past months to attract Mauritian citizens, but the panicked
environment has undermined the appeal of these offers. If hotels in Mauritius are
involved in this strategy, it will be likely that pricing power will be lost when travel
restrictions are lifted and the full recovery of hotels will be prolonged. A reduction
in the rate may be required for some luxury hotels that simply need quick increases
in revenue in order to survive.
However, the demand for hotels will fall completely until there is a mass vaccination
occur and this will happen only if a reliable vaccine will be found at reasonable price.
Otherwise, nobody will want to take a risk and be with other people in a hotel.

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