Eco-Tourism Developments and Value Chains
Eco-Tourism Developments and Value Chains
Business Model Description
Construct and operate hotels and resorts with eco-tourism practices relying on local value chains, including organic food, agri-tech, reduced energy usage and improved waste circularity. Diversify tourism operations around cultural and natural offerings with links to local communities and in areas such as domaine-inland natural leisure parks, reserves for coral and mangrove protection, endemic forests and bird sanctuaries.
Expected Impact
Enhance the participation of communities and local providers and suppliers in tourism value generation, and reduce environmental harm caused by the industry.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Mauritius: Countrywide
- Mauritius: Rodrigues
- Mauritius: Port Louis
- Mauritius: Grand Port
- Mauritius: Rivière Noire
Sector Classification
Services
Development need
Although tertiary sector employs 70% of the Mauritian labor force, tourism industry remains vulnerable whereby COVID-19 threatened 20% of jobs (8, 1). Repositioning and adapting it to current challenges, such as climate change, changing profile of tourists and emerging markets competition, is necessary for Mauritius to achieve SDG 8 (7).
Policy priority
Both the Voluntary National Review (VNR) and the Maurice Ile Durable Action Plan highlight the country's aim to become a green, circular economy including the services sector (10, 11). The Ministry Tourism's Sector Strategic Plan includes the core objective of an inclusive and sustainable tourism sector and integrating local actors into the value chain (7).
Gender inequalities and marginalization issues
In 2018, the services sector employed 70% of women wage workers, with 12.7% in trade, 10.5% in public administration, 8.9% in hospitality and food, 7.4% in education, 6.1% in administrative and support activities, 5.9% in transport and storage activities, 5.4% in household activities. Moreover, in the private sector, women often have the low and mid-skill positions and are paid 20% less, in average, than men (9).
Investment opportunities introduction
In 2018, the services sector generated 67% of the GDP and was the main contributor to the national GDP in 2019 (with a cumulative growth of 34% from 2012 to 2019) (12, 8). It also is the main employer with 70.9% of employees working in services (8).
Key bottlenecks introduction
There is a mismatch between the labor market needs and the available training options, especially in the sector of high productivity services, which requires specifically advanced skills (9).
Hospitality and Recreation
Development need
The tourism subsector represents 1 out of 10 jobs (3). In 2020, following COVID-19, tourists arrivals dropped by 53.1% compared to 2019 (4), endangering 50,000 employments, which needed state support (1). Additionally, to reach SDGs 11 and 12 targets, some improvement regarding the GHG emissions and the resource efficiency in the sector are necessary (4, 3).
Policy priority
The VNR includes the goal to become a green destination by 2030 (10), the Budget Speech for 2019-2020 mentions development of a new tourism brand to reposition Mauritius as a premium destination (5), while the Tourism Strategic Plan aims to develop a year-round high-value tourism, such as health tourism, eco-tourism, cultural activities and grey tourism (6, 7).
Gender inequalities and marginalization issues
In Mauritius, 88% of the 335 km long beach perimeter is privately occupied, and coastal tourism is dominated by big operators restricting local community involvement, including minority and disadvantaged groups, such as women and fishermen, who feel excluded from the benefits of tourism (7, 41).
Investment opportunities introduction
In 2019, before COVID-19, tourism represented one fifth of the national economy (6), 8.1% of the GDP, 13% of total employments and 5.1% of investments (4). In addition, for the financial year 2019-20, a total of MUR 708 million (USD 17 million) were allocated to the Ministry of Tourism (4).
Key bottlenecks introduction
Mauritius is a 3-hour flight destination for only four countries and experiences severe competition from neighboring islands such as Seychelles and Maldives (7). This is reinforced by the lack of air connectivity, notably with Asia (in 2019, airlifts dropped by 77,000 seats) (7, 4). Additionally, tourism in Mauritius is highly vulnerable to climate change effects (7).
Hotels and Lodging
Pipeline Opportunity
Eco-Tourism Developments and Value Chains
Construct and operate hotels and resorts with eco-tourism practices relying on local value chains, including organic food, agri-tech, reduced energy usage and improved waste circularity. Diversify tourism operations around cultural and natural offerings with links to local communities and in areas such as domaine-inland natural leisure parks, reserves for coral and mangrove protection, endemic forests and bird sanctuaries.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
The number of international tourist arrivals was 1,382,906 in pre-pandemic year of 2019, generating USD 1.7 billion tourism revenue. Tourist arrivals are expected to reach one million in 2022 and 1.4 million in 2023 (4, 47). The government target is to increase tourist arrivals to reach two million visitors in 2030 (3).
Following the pandemic, 76% of consumers are expected to be more concerned about sustainability (17), which offers opportunities for eco-tourism.
Indicative Return
USD 13 million total return per annum
Based on the branding and scale of investment, eco-tourism can offer a total return of up to USD 13.4 million per annum for a large hotel group in Mauritius (17).
Investment Timeframe
Medium Term (5–10 years)
Premium in rates per night, owing to eco-tourism practices and sustainable operations in a large hotel in Mauritius, is achievable after five years (17).
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Capital - CapEx Intensive
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Mauritius’ tourism activities are constrained by limited resources (39) and are vulnerable to climate change. More than 50% of the coral is bleached and the sea-level rise could decrease tourism revenue by USD 50 million / year in 2050 (7, 3).
Conventional tourism activities in Mauritius are resort-based and dependent on seasonal beach tourism, failing to diversify offerings to include cultural tourism and integrate local communities and small businesses into the tourism value chain (7, 35, 39, 40).
Mauritius' tourism industry causes 16% of national GHG emissions and needs to be energy-resilient and resource-efficient to mitigate its negative impact on the environment according to the objective of 30% reduction in GHG emissions associated with the accommodation sector by 2030 (34).
Gender & Marginalisation
Women are more vulnerable to job loss in the tourism sector than men, as they make 40% of jobs in accommodation and food services (often low-skilled jobs) and are more likely to be entrepreneurs in that sector than others. Yet, they face a gender gap in access to credit for business (21).
The sector is dominated by big operators whose imports of equipment for construction, and consumer goods diminish the sector's contribution to national GDP by leakages of foreign exchange earnings. This leaves little space for small and local community tourism operators to develop (7, 39).
Expected Development Outcome
Eco-tourism development entails positive outcomes on poverty reduction, especially in the poorest regions not yet benefiting from the sector revenues. For example, in 2015, the poverty rate in Rodrigues and Port Luis was 10%, compared to 6% in the richest areas of Mauritius (7, 22).
Eco-tourism supports responsible consumption practices through resource efficiency, recycling, renewable resources uses and energy efficient equipment as well as supply from local food producers. Using Room Energy Management Systems enables a 37.5% saving in energy consumption (7, 11, 34).
The development of eco-tourism support the promotion of the local historic heritage, authentic culture and traditions, as well as environmental conservation and natural heritage (23, 24).
Gender & Marginalisation
Small and local actors benefit from the development of eco-tourism as it will facilitate a shift from an all-inclusive formula in hotels to community-based tourism with a focus on local sourcing (18).
Eco-tourism facilitates an inclusive tourism value chain with the involvement of local communities, minority and disadvantaged groups, such as women and fishermen, who feel excluded from the benefits of tourism (41).
Primary SDGs addressed
12.2.1 Material footprint, material footprint per capita, and material footprint per GDP
12.2.2 Domestic material consumption
2.9 tons CO2 per capita (2010) (35).
14.7 million tons of domestic material consumption, including 2.1 million tons of fossil fuel (2017) (25).
In 2030, the objective is to reduce GHG emission by 40% (saving 6,900 ktCO2 equivalent) (27) and to reach 35% of renewable energy in 2025 and 40% in 2030 (26).
N/A
8.5.2 Unemployment rate, by sex, age and persons with disabilities
8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate
6.3% (9.7% for female and 4.1% for male) (2019) (25).
8.1% (representing MUR 63.1 billion (USD 1.4 billion) (2019) (4). 9.1% of direct total gross value added (2018) (25).
N/A
MUR 120 billion (USD 277 million) of earnings from the tourism sector in 2030 (7).
15.3.1 Proportion of land that is degraded over total land area
27% (2015) (25).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Planet
Corporates
Public sector
Outcome Risks
If not considered carefully, eco-tourism projects may increase the pressure on natural habitats and wildlife that have previously not been connected for touristic purposes.
Due to lower access to financing, women may not be able to engage and benefit from the development of eco-tourism as much as men, which could reinforce inequalities.
Impact Risks
Eco-tourism players may not fully appreciate the sustainability needs of people and planet, and could engage in SDG-washing practices, which would limit or even undermine the expected impact.
Locally sourced inputs to eco-tourism projects may not be readily available in the required quality and of the needed scale, which may limit the expected impact.
Impact Classification
What
Eco-tourism increases income generation opportunities, including for small and local actors currently excluded from the value generation, and reduce the environmental footprint of tourism.
Risk
Availability of locally sourced inputs, in required quality and quantity, and credibility of enterprises in terms of sustainable and eco-practices are concerns for achieving high impact.
Contribution
Eco-tourism adds to the climate change adaptation efforts through sustainable consumption, and increases foreign exchange revenue, alongside benefits in the financial and seafood sectors.
Impact Thesis
Enhance the participation of communities and local providers and suppliers in tourism value generation, and reduce environmental harm caused by the industry.
Enabling Environment
Policy Environment
Mauritius Sustainable Island (MID), 2013: Is a 10-year strategy supporting the sustainable development of the island. It mentions the high greening potential of the tourism sector through the efficient use of resources and awareness raising (11).
Government Program 2020-2024, 2020: Emphasizing on the need for inclusiveness, high-income and green practices, the government reaffirms its support to the development of cultural and eco-tourism on the island (28).
Ministry of Tourism Strategy 2018-2021, 2018: Emphasizes the need to improve the environmental footprint of the tourism sector and the necessity to diversify the sector to adapt to the changing environment (7).
National Forestry Policy of 2006: Mention the development of inland eco-tourism as a solution to support the restoration of natural forests and its biodiversity (36).
Financial Environment
Financial incentives: Invest Hotel Scheme enables hotel developers and owners to sell hotel rooms to individuals (33). Technology and Innovation Scheme by SME Mauritius Ltd. supports SMEs in their investments in green technology (38).
Fiscal incentives: 15% income, corporate taxes and VAT, tax-free dividends under Smart City Scheme a 8-year tax holiday. 10-year exemption from income tax and for investments over USD 25 million, exemption of income tax for non-citizen including for tourism developments (33)
Regulatory Environment
Finance (miscellaneous provisions) Act, 2015 amending the Tourism Authority Act 2004: Imposes to every tourism actor to get a Tourist Accommodation Certificate from the Tourism Authority (29).
Non-citizens (Property Restriction) Act: Imposes to Mauritius non-citizens willing to acquire an immovable property to engage in a new or existing guesthouse or tourist residence business to get the authorization from the Economic Development Board (EDB) (30).
Environmental Protection Act, 2002: Specifies the condition to conduct an Environmental Impact Assessment before starting a project, including for tourism developments (32).
Excise Act, 1994, amended by the Excise Amendment Act 2011: Regulates the excise on diverse products, such as alcohol (31).
Marketplace Participants
Private Sector
Rogers Group, Beachcomber Hotels & Resorts, Attitude Group, Otentic Eco Tent Experience, Mauritius Conscious, Chazal Ecotourism
Government
Ministry of Tourism, Mauritius Standards Bureau, Tourism Authority.
Multilaterals
European Union (EU), including with the SUS-ISLAND program.
Target Locations
Mauritius: Countrywide
Mauritius: Rodrigues
Mauritius: Port Louis
Mauritius: Grand Port
Mauritius: Rivière Noire
References
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