The main pool at Long Beach, Sun Resorts’ new hotel in Mauritius.
Sun Resorts recently opened its brand new resort on the site of the former Le Coco Beach Hotel, on the east coast of Mauritius.
Long Beach, the newest addition to Sun Resorts’ Mauritius line-up, is a five-star resort that has been positioned to fit neatly between the Sugar Beach and Le Touessrok tourist markets. The R582 million development is on the Belle Mare Peninsula, on the longest and widest stretch of white-sand coastline of any resort in Mauritius, with 109m2 of beach per room and vast landscaped gardens. The 255 rooms are arranged in three crescents, so that every room has a view of the sea.
Marketing director, Arnaud Martin, says when Sun Resorts acquired Le Coco Beach in 1994, the team wasn’t too keen about the existing structures on this site.
“The previous owner had run out of money, and we bought the site and finished the half-built hotel. What attracted us to the deal was the potential of the location. We always believed that operating Le Coco Beach on that location wasn’t doing justice to the site. Also, we knew we were leaving money on the table because we weren’t maximising profitability for this locality.
“When we took over the project the structure was already in a bad state because the half-finished building had been standing dormant for some time, which isn’t good for any building, but is especially detrimental for one that is right on the coast.
“We operated Le Coco Beach for 15 years, and by 2009 the hotel had reached its peak and was on the way down. It needed a complete refurbishment, but the services like electricity, and plumbing hadn’t been properly installed initially and there were some serious structural problems, so it didn’t make sense to try and revamp the existing buildings. The only viable option was to demolish them and build a new resort that would do justice to the location.
“The previous hotel included a few bungalows scattered here and there. The new resort is a much better utliisation of the location including the 800 m beach. We also still have the site of about 10 ha next door, which was the site of the actual Le Coco Beach Hotel. We could build another 250 rooms there in future.”
Martin says in the hotel business if you don’t move forward, one day the market will push you backwards.
“With any hotel you need to build for the next 15 to 40 years ahead. We took a view that despite the current economic situation, we would move forward with the hotel, not only for today’s customer, but for future customers.
“Then, to minimise the risk, we developed an integrated hotel scheme, which is much like sectional title in South Africa, and there we have sold 90 rooms. This cash injection lowered the cost of building the new hotel and reduced the risk.”
He says the payback on a hotel like this should be about nine years. However, it’s impossible to predict accurately as the hotel industry is market driven. If trading conditions improve the break even point could be reached much sooner, but with the market as sluggish as it is now, it could take much longer.
“But we believe we have built the right hotel for this location. When you develop something, you have to do it with the customer in mind. Let’s face it, our core traditional market is basically UK and Western Europe, which is under a lot of pressure. There are emerging markets, yes, but we have low market penetration there. For Sun Resorts as a group, 75 to 85 percent of revenue comes from Europe.”
Sun Resorts’ other hotels in Mauritius are Le Touessrok, La Pirogue and Sugar Beach, and the group is quoted on the Mauritian stock exchange, which is a vehicle for raising money.
Martin says Long Beach is positioned for the middle and upper middle classes, which largely drives the world economy.
“Since India has had a middle class the country has a 10 percent growth rate, Brazil now has nine percent, and China 12 percent. Although there are properties and goods that are designed for the world’s wealthy, that market is very small. There are 800 million middle class people in the world, but only 1 300 billionaires. The luxury goods industry wouldn’t do all that well if it wasn’t for the middle class and emerging markets like Brazil, India, Russia and China.
“Long Beach’s target market is definitely active men and women, couples, and honeymooners. Couples will keep getting married and going on honeymoon and families will go on holidays and people will save up for that. But it is also true that the tourism industry is driven by GDP growth, so if you don’t have new money, new wealth, you will have an issue.”
He points out that seasonality at a resort isn’t anchored in the destination, but depends on the seasons in the countries the tourists are from. Resorts cater for families during school holidays around the world, which are the prime seasons. Couples and honeymooners tend to visit during the small season, and conferences are generally held during the off season.
Hotel costs are constant throughout the year, as hoteliers can’t hire staff on a seasonal basis, and maintenance and repairs have to be scheduled, so it is challenging to get the balance right.
“Hoteliers need to have tremendous respect for their customers, regardless of which class they belong to. Too many people get carried away with becoming too pretentious. A vote is a vote, whether it comes from the king or the taxi driver. And staff must understand that it’s the guests who pay their salaries, and once you have the guests, you need to make sure you keep them. It’s expensive to get them.
“In Mauritius the literacy rate is 85 percent and people are bilingual, so even ordinary staff like gardeners and cleaners can hold a conversation with guests from all levels of society. In many other countries you will find good staff, but they tend to be more passive.”