The brochures promise turquoise lagoons, Creole fusion cuisine, and five-star serenity. What they omit is the economics. Mauritius, that tiny volcanic speck in the Indian Ocean, has perfected a peculiar form of capitalism: a hotel sector that earns in euros and pounds, pays in rupees, and extracts profits with the efficiency of its colonial-era sugar plantations. The industry is cartelised, concentrated in the hands of a few dynasties, and subsidised by the state. It is immensely profitable. It is also a monument to wage suppression.

In the financial year ended June 2025, the island's major hotel groups posted record results. Lux Island Resorts reported revenues of 10.6 billion rupees and attributable profit of 1.21 billion. New Mauritius Hotels, the Beachcomber behemoth, turned over 16.9 billion rupees and cleared 2 billion in profit. Sun Limited declared its best year on record with 2 billion rupees in profit on revenues of 8.8 billion. These are not anomalies. They are the structural outcome of an industry built on currency arbitrage, land monopoly, and state largesse.

Paradise in Hard Currency

The model is elegant. A European couple books a week at a Mauritian resort for roughly 3,000 euros. That sum is paid in hard currency—sterling, euros, dollars—then converted into rupees at a widening discount. The rupee has depreciated steadily against major currencies for years, sliding from around 35 to the euro in 2015 to over 50 today. For hotels, this is not a problem. It is a profit centre.

Revenues arrive in strong currency. Costs—wages, utilities, local supplies—are settled in weak rupees. The gap between what guests pay and what workers earn has become a chasm. A room attendant at a mid-tier resort earns the statutory minimum wage: 17,110 rupees per month as of January 2025, roughly 320 euros. A guest's weekly holiday costs nearly ten times a housekeeper's monthly wage. The arbitrage is not incidental. It is the business model.

Consider the numbers at New Mauritius Hotels. The group's profit after tax for fiscal 2024 was 2.1 billion rupees on revenues of 15.4 billion—a margin of 13.6 per cent. EBITDA stood at 4.8 billion rupees. These margins would be the envy of hoteliers in Paris or London, where labour costs are triple and land is astronomically expensive. The sums work because labour is cheap and foreign exchange is dear.

For fiscal 2023, Lux Island Resorts reported finance costs of 539 million rupees, of which 61.4 million was interest paid to the Mauritius Investment Corporation, the state's sovereign fund. The group is paying hundreds of millions in interest and still clearing billion-rupee profits. The math works because the rupee buys labour more cheaply each year.

A Cartel of Dynasties

The Mauritian hotel sector is not a free market. It is an oligopoly, descended directly from the island's sugar aristocracy. When global demand for cane collapsed in the 1970s, the Franco-Mauritian families who owned the estates did not sell up. They pivoted. Coastal land was rezoned. Cane fields became golf courses. The same surnames—Espitalier-Noël, de Chazal, Rogers, Dalais—reappeared on hotel boards.

Today, five conglomerates control the bulk of the island's beachfront. Beachcomber operates seven resorts and reported 16.9 billion rupees in revenue for fiscal 2025. Lux runs five properties under its own brand and manages others, posting 10.6 billion rupees. Sun Limited owns four high-end hotels and earned 8.8 billion rupees in fiscal 2024. Constance Hotels has two resorts in Mauritius and reported approximately 6.1 billion rupees in revenue. Rogers Hospitality, part of the sprawling Rogers & Co empire, contributed several hundred million rupees in profit before the group's merger with ENL to form ER Group in July 2025.

Between them, these groups dominate not just hotel rooms but also the supply chains that feed them: import licences, duty-free concessions, transport networks, even the local fish and vegetable markets. The vertical integration is comprehensive. The result is a market where entry is all but impossible and pricing power is absolute.

Arbitrage by Design

The state is not a bystander. It is an active participant. The Mauritius Investment Corporation, a sovereign fund established ostensibly to rescue distressed businesses, has become a de facto subsidiser of hotel expansion. Lux Island Resorts paid 61.4 million rupees in interest to the MIC in fiscal 2023, part of total finance costs of 539 million rupees. The loans are extended at concessional rates, ostensibly to preserve employment. In practice, they underwrite profits.

Then there are the fiscal sweeteners. Hotels enjoy VAT refunds on capital expenditure, duty exemptions on imported equipment and luxury goods, and long-term coastal leases at below-market rates. The rationale is always the same: tourism is the lifeblood of the economy, accounting for roughly a quarter of GDP and employing tens of thousands. To question the subsidies is to risk being branded anti-growth.

Yet the numbers tell a different story. The hotel groups are not fragile. Constance posted an occupancy rate above 75 per cent in fiscal 2024. Lux's profit margin exceeded 11 per cent. These margins would be the envy of hoteliers anywhere. The subsidies are not lifebuoys. They are profit enhancers.

The Workers' Treadmill

The guests, naturally, see none of this. What they see is attentive service, immaculate linen, and a smile that never falters. What they do not see is the shift system. A typical room attendant works ten to twelve hours a day, six days a week. Overtime is common but poorly compensated. Many staff commute an hour each way from inland villages, spending a tenth of their salary on fuel or bus fares.

The wages are at the legal minimum: 17,110 rupees per month, or about 320 euros. This is in an economy where the rupee has lost more than 30 per cent of its value against the euro in the past decade. Workers earn in a currency that depreciates while their employers earn in currencies that appreciate. The hotels benefit doubly: they earn more rupees per euro, and those rupees buy labour more cheaply.

The minimum wage is supplemented by a patchwork of perks designed to obscure its inadequacy. There are meal allowances, uniforms, and the occasional staff shuttle. Some hotels offer subsidised housing, though the waiting lists stretch for years. A few provide access to duty-free car imports—a benefit that sounds generous until one realises it merely allows workers to buy a vehicle at normal prices, which they then struggle to fuel and maintain on a 17,000-rupee salary.

More insidious is the retirement age. Where most Mauritian workers retire at 65, hotel staff are often kept on until the same age or beyond, a policy framed as compassionate but serving to extend the supply of low-wage labour. The industry has no shortage of young applicants, yet it prefers to retain older workers at stagnant wages rather than raise pay to attract new talent.

The parallels with the sugar estates are not accidental. Many hotels occupy land that was, within living memory, worked by indentured labourers. The ownership has barely changed. The crop has shifted from cane to sunbeds, but the logic is identical: monopolise the land, minimise the wage, maximise the margin. It is neo-plantation economics in beachwear.

Policy as Subsidy

The government's position is that tourism is non-negotiable. Without it, the argument goes, Mauritius would revert to dependence on sugar and textiles, both declining industries. The hotels, therefore, must be protected. This logic has calcified into policy.

Land designated as coastal is almost exclusively reserved for tourism or real estate schemes—often fronted by the same hotel groups. Planning permission for competing uses is rarely granted. Environmental assessments, when required, are cursory. When cyclones damage resorts, reconstruction permits are fast-tracked. When occupancy dips, the state launches marketing campaigns in Europe at taxpayer expense.

The VAT regime is particularly revealing. Hotels charge guests the standard 15 per cent rate but reclaim a substantial portion on capital imports and refurbishments. The net effect is a lower effective tax rate than most Mauritian businesses endure. Duty exemptions on imported foodstuffs, beverages, and furnishings further tilt the playing field. A local restaurant pays full duty on imported wine; a five-star resort does not.

These are not market failures. They are design features. The hotel cartel does not merely benefit from state support—it has shaped the state to serve its interests. The revolving door between hotel boardrooms and ministerial appointments is well-oiled. Regulatory capture is not alleged. It is observable.

A Gilded Siphon

The macroeconomic picture is similarly lopsided. Tourism generates foreign exchange, which is genuine and valuable. But the distribution of that exchange is grotesque. The hotels capture it at point of sale, convert it to rupees at favourable rates, pay staff a fraction, and remit profits to shareholders—many of whom are offshore or foreign.

The workers, meanwhile, live in an economy where the rupee buys less each year. Imported rice, flour, fuel, and medicines rise in price as the currency weakens. Wages, pegged in rupees, do not keep pace. The hotels benefit doubly: they earn more rupees per euro, and those rupees buy labour more cheaply. The workers lose doubly: their purchasing power erodes, and their employers grow richer from the same dynamic.

This is not a bug. It is the entire system. The hotel sector is not an industry in the conventional sense. It is a machine for converting foreign leisure spending into domestic profit concentration, with wages as the residual. The state, rather than correcting this imbalance, entrenches it through subsidies, concessions, and regulatory favour.

The Inheritance of Sugar

Mauritius likes to tell a story of diversification and resilience. From a monoculture sugar colony, it became a manufacturing hub, then a financial centre, and finally a tourist destination. The reality is less flattering. The economy has diversified, but ownership has not. The same families who controlled the cane fields now control the coast. The same mechanisms of exploitation—land monopoly, labour suppression, political influence—remain intact.

The hotel workers are not serfs, legally. But functionally, they occupy a similar position. They cannot easily switch employers in a cartelised market. They cannot bargain for higher wages when the alternative is unemployment. They cannot move abroad without visas and capital. They are economically captive, which is the condition the plantation system always sought to create.

The guests, sipping cocktails at sunset, are oblivious. They see efficiency, warmth, and value. They do not see the balance sheet. A week's stay generates enough revenue to pay a housekeeper's monthly wage ten times over, yet the housekeeper will never see that sum. The difference is captured by shareholders, many of whom have never set foot on the island.

Conclusion: Dividends Up, Dignity Down

Mauritius sells itself as a model—politically stable, economically open, ethnically harmonious. The hotel sector is held up as the crown jewel, proof that a small island can compete globally. But look closer and the jewel is paste. The industry is cartelised, subsidised, and sustained by wage suppression. It earns in hard currency, pays in soft, and extracts profits with a ruthlessness that would make its sugar-baron predecessors proud.

The workers are not partners in this success. They are its input cost, squeezed to the margin. The state is not a regulator. It is a facilitator, offering land, tax breaks, and cheap credit to an oligopoly that hardly needs them. The guests are not complicit, but they are certainly not innocent. They are paying for paradise, and someone else is paying for their pleasure.

Mauritius has not escaped the plantation. It has rebranded it. The cane has gone, replaced by canapés. The overseers wear polo shirts instead of pith helmets. But the logic is unchanged: concentrate the land, suppress the wage, export the profit. It is a five-star economy built on a minimum-wage foundation. The view is exquisite. The foundations are rotten. And the bill, as always, is paid by those who can least afford it.