Mauritius: Jean Michel Pitot - "It will take time to build up the tourism industry"

interview

Tourism, one of the largest industries in the country, is today cause for much concern. With no tourists on the island and a tug of war taking place between the hoteliers and the government about whether to open the borders to stimulate the economy or keep them closed to keep Covid-19 out, we speak to Jean Michel Pitot, president of the Association des Hôteliers et Restaurateurs de l'île Maurice (AHRIM) and CEO of Attitude Hotels about his take on the situation.

As the president of the AHRIM, what exactly is the situation of the tourism industry in Mauritius today?

There is a bit of a fog. Nobody expected it to last this long. At the beginning, everybody was expecting that by July or August, the fog would be over. We are now in October. Nothing will happen this year really. We are waiting for phase 3 of the re-opening.

Are you saying we should have opened our borders sooner?

No. I understand this is a complex issue but there has been no announcement so far. If there has to be a reopening, it should be with a few weeks' advance notice.

Considering that we are already mid-October, have we lost all the tourists for this year?

I am a bit pessimistic for this year. We are hoping that we get a few tourists at the end of the year but for that to happen, the decision to reopen the borders must be taken rather quickly. I know that the hotels and Business Mauritius have had a lot of discussions with the government over the protocol and when normal tourists will be allowed in. Nothing has been accepted or rejected yet so we still have to debate.

What proposals did you put to the government?

Without getting into details, our proposal involves allowing tourists to come with all the tests done before and on arrival and giving them the opportunity to experience Mauritius with some restrictions...

Without quarantine?

Without quarantine. Tourists coming in for nine days can stay for, say, three days at the hotel, by which time the test results will have come in while keeping an eye on any surge in temperature and then after three days allowing them to travel around Mauritius in a restricted way.

They will need drivers to drive them, waiters to wait on them, receptionists to receive them... So what exactly do you mean when you say 'a restricted way'?

I mean allowing them to go to some places with their masks on and their hand sanitisers and so on handy. Yes, you will have a pool of accredited taxi drivers to take them around and be some sort of guides. Those who are in contact with tourists will have to wear masks and be strict about social distancing. Of course, tourists will not be allowed to go to the Quatre Bornes market and start mingling with everyone.

Who is going to implement that protocol in the hotels?

The hotels will implement it. There is no doubt about it. They will implement it as a sine qua non. The hotels will also have to look after staff and particularly frontliners. I think the protocol has been discussed but I insist that nothing has been decided yet. We reckon it's the most appropriate way to kick-start the process. We believe that tourists will not be happy to spend so many days locked up in hotel rooms as if they were in a prison.

Given the situation elsewhere, do you think the tourists will come in large numbers even if they were not locked up in hotel rooms?

It will take time to reach reasonable numbers. I don't have a crystal ball but to answer your question, yes initially the numbers will be small and it will take time to build up the industry again. 2021 will be a very important year in that sense.

With such small numbers, does it make sense to re-open the borders then?

We have to start somewhere. I mean in a country like France, it's crazy to hear numbers like 10,000 people having been infected but are we sure of what we are talking about?

Do you mean that we are exaggerating the Covid-19 threat?

Yes. Given what we know today, I think we can better manage the virus compared to nine months ago. I don't see long lines in the hospitals or people dying every day any more. There is panic and hysteria.

Politically speaking, it's a tough decision, isn't it?

I agree it's a tough decision but then tourism represented 25 per cent of GDP before the crisis. However, people will say, 'let's sacrifice this 25 per cent to protect the other 75 per cent'. I am not an economist but I don't think it's as simple as that because that 25 per cent represents a lot of value addition across the spectrum of the economic distribution network. I feel at some stage the country must be responsible. Today, I think the hysteria is there...

Do you really think it's hysteria?

When I look at the news worldwide, I do think there is a lot of hysteria.

In Mauritius too?

No, I think Mauritius has been good at managing that. But the way the virus is talked about as if when you get Covid you die tomorrow is exaggerated. More people are dying on the roads but we don't talk about them. So that's double standards. We need to start relativising this whole thing and telling people that we cannot live like this for long. We opened our borders partially in October, but now we have to open them fully and guard against all the risks.

What you are saying is that we have to accept the risk of bringing Covid back in with the tourists because economically we would die otherwise...

As a hotel operator, I am tempted to say we cannot live without Covid; it will be part of our lives until a vaccine has been approved. So we have to take calculated risks. We have a lab at the airport and we know the symptoms. We have learnt a lot since March. We cannot live indefinitely on Wage Support. We must take decisions. I don't want to sound like a bad hotel guy, but at some point, common sense must prevail. Now we have tests, ventilators and hospitals. When I spoke to Dr Gaud and attended one of her conferences with hotel staff, I came back relieved because she has the ability to relativise the danger. She told hotel staff that contamination would be caused only through our own actions like not wearing a mask or not washing our hands.

Is it all about masks, washing hands and social distancing? Are you saying that in France and the UK, for example, they don't know about these things?

I think our French friends go to bars, underground and restaurants and party in discotheques. Once they go home to their parents and grandparents, the virus spins out of control. We are more controlled.

Are we more disciplined?

Yes! We see people on bikes wearing masks. I think the reopening to normal tourists will be part of a communication exercise to enforce the wearing of masks and social distancing...

We just need one person to be infected and another one to be in contact with them for the virus to spread everywhere, perhaps triggering another lockdown. Would we survive a second lockdown?

Again, people die on the road everyday but nobody closes off the roads. We shouldn't become hysterical. When you start panicking, you take irrational decisions.

Are you not personally afraid of catching the virus?

I take my precautions. I have friends who ran a fever for a few days and they recovered. I don't know what they had. I think if you tested the whole Mauritian population, you might be surprised by what you might find out...

Are you saying that the virus is already in our shores?

I am not saying anything. In France, out of millions of tests, you get 10,000 infected people. Here, you see the planes coming in and 25 people testing positive out of a population of 9,000 who came in since March. The ratio is not even one per cent.

But you need less than that for the virus to spread...

Yes, but there is contact tracing and a range of protocols. We have acquired plenty of experience with Dengue, Malaria and so on.

Even if we opened our borders tomorrow, how many people can we realistically expect to see coming to Mauritius?

I have no idea about that. I heard that Air France is keen to put its flights back on and so is Emirates. There will be some tourists. I heard the finance minister say we would get 20 per cent of the tourists next year. That's 200,000 from January to December 2021.

So why don't we wait until next year?

Even if we waited, what more are we going to learn tomorrow that we don't know today? In the meantime, what will happen to the economy? I mean if you go ask people in the street what their biggest worry is, the answer will not be the virus but the growing unemployment. Covid probably comes third or fourth. A few months ago, Covid was their worst fear. I think unemployment is hitting many people and they are feeling the pinch. So why wait? I am not afraid of a second wave; I am afraid of a wave of unemployment. That is what will hurt the country most. If some infected person makes it through our borders, we have contact tracing, tests etc. and we know how to manage the virus, but how do you deal with a wave of unemployment? That is my concern.

Why should there be unemployment in the hotels? You are getting the Wage Assistance Scheme, aren't you?

The government is paying salaries up to Rs50,000. It is paying Rs500 million a month but that represents only 50 per cent of the salary cost of the hotels. We still have to pay fixed costs such as maintenance, licence etc. So the government support is equal to 25 per cent of the costs of a hotel. Rs3 billion have been paid to the tourist sector, but the tourist sector had to cover the other Rs9 billion in other costs. The help of the state is great but my thinking is that the state can't carry on paying indefinitely and if we had to fork out Rs9 billion more, we would be dead.

A lot of people are saying that when hoteliers were making a lot of money, they were dishing out huge dividends. So why should the government pay anything at all now?

Those sorts of questions make me mad.

Good. Give me a mad answer.

People look at only one side of the coin. Dividends are some of the key reasons we invest. If we don't accept that people invest to get their money back, then there is no debate. It's also true that the gearing of some hotels is unreasonably high. Most of the hotels were built with equity and loans. The model was a 50-50 gearing. That means we have to pay the money back to the bank. We have also been investing a lot in hotels. Today, we are proud of our hotel industry, we agree that the hotel industry has promoted the image of Mauritius abroad and that hotels have been renovating every year, and yet we ask 'where is the money'? It has been reinvested in hotels! Hotels are very cash intensive. Tourists don't want to come back and see the same sofas and cushions every year. So we have to renovate.

And when you close your hotels for six months for renovation, where does the cash to pay for the expenses you have mentioned come from?

We plan in advance and manage our cash flow and maybe when we renovate you can increase your rates and your business model allows you to do that. I have just renovated one of our hotels. Thirty per cent of the money spent came from us and 70 per cent from the bank. We planned it in advance, based on known facts and economic visibility. Now we are closed and we don't know when we will re-open. None of us was prepared for that obviously. This is totally unforeseen. Everybody is proud of our hotel industry in Mauritius; people know the country overseas because of our hotels. How can you be proud of something and then criticise it?

Talking about criticism: there are some hotels that have been used as quarantine centres and so far Mauritians have been forced to quarantine there. They pay through the nose and get a deplorable service. Why? You are getting the money. Where is the service?

I am sure you are generalising. There are 20 hotels servicing the quarantine. I have heard of only one serving fried rice and pumpkin.

There are others serving cold food, unhealthy, carb-loaded meals, raw pizzas etc. I am not inventing this.

I think nobody would be pleased to spend that kind of money and be stuck in a room. Hotels are making an effort because they don't want to ruin their reputation. When you are served a meal in a room, with no wine or whiskey and without the use of the hotel facilities... you are not going to enjoy it. Having said that, some hotels are not equipped to serve hot food to 150 rooms; others are not equipped for room service. That's where trial and error happens.

Rather profitable errors, I would say...

Yes, I know there are some guys who have been abusing. I told them they are not helping our cause and asked them to make sure everybody is happy. I wouldn't like to pay Rs40,000 for me, my wife, my children and be served nonsense.

Now why are people not allowed to take walks in the garden? Have you tried asking the Ministry of Health?

We are talking everyday to the minister of tourism and the Mauritius Travel and Promotion Authority but the Ministry of Health have their own protocol and they are very rigid.

What is the reasoning behind keeping people locked up?

Security and the fear that the virus might jump on someone.

Isn't that paranoia?

Let me tell you something: I have a friend who came a few weeks ago and while on the bus, the driver told him to close the window because the virus might jump out. So imagine this level of paranoia.

In that case, at least get the food right, since it's the only comfort quarantined people get.

I think you are generalising again. I saw the food some hotels are serving and it was fantastic. I know what I am serving in my hotel.

But you are serving it cold.

I am not going to say yes or no. I am not there to see. But I can imagine that with 125 rooms to service, I am sure there are ways to improve. I am not saying we are perfect.

The finance minister has said there will be 9 per cent growth next year. Are you as optimistic?

We went through a depression the last six months, so we can only go up. I don't know what nine per cent was based on or whether he took tourism into account. But he did say we should expect 200,000 tourists next year...

Do you really think 200,000 people - particularly from our main market, France where the virus is taing a big toll - will come to Mauritius, sit in a plane for 11 or 12 hours, not knowing whether the borders will remain open or suddenly close, taking all kinds of risks?

It may not happen tomorrow but I am still hopeful that things will change. I am very surprised to read the news coming from France. Paranoia and hysteria are at their peak there. That France, which is a grown-up country, is moving into a panic mode like that is stunning. No other country in Europe is going that route. I have a very hard time understanding how they are dealing with Coronavirus. I am indeed panicking here because that is our main market and this is not the time to go fishing for a new market.

The French now spend their holidays discovering France and the British are also discovering Wales and Scotland. Isn't that a worrying trend?

Yes, of course. That's why I am saying if we get only 20 per cent of the French tourists next year, that's good news.

If we do, it won't be this year, will it?

I don't see anything happening before the end of this year and January is right around the corner. We really have to work hard to get those numbers in 2021 otherwise we are dead.

So if we get 20%, are we out of the woods?

If we do, we will have one foot out of the woods. By the time you get 50 per cent you start balancing things out.

How is the relationship between the private sector and the public sector today?

In that respect, I would rate it 100% good. We sit together practically every week via zoom to talk about the way forward and re-invent the way the country is being marketed. One thing that came out loud and clear is that we need a data collection centre to service the hoteliers and the government. We need to understand why tourists come to Mauritius, what they like or dislike about it, why they choose Mauritius over the Seychelles and vice versa. For the last 30 years, we have been selling Mauritius easily: nice hotels, nice beaches and a fantastic service. This was being done without much effort. That period is dead. We now need a proper central marketing office to collect and analyse data on a daily basis.

Isn't it a bit late to set up an office? Tourists are not coming so who are you going to collect the data from?

Tourists will come back and we need to be prepared for them. We can't assume that taking a plane and organising a dinner in a couple of big cities will bring them back.

He Wakashio tragedy must have complicated an already complicated situation. How are you going about doing some damage control?

We have organised quite a few meetings to redress the image of Mauritius. A lot of work is still being done by my friends in the hotel industry and I am part of it. That collaboration for me is key in helping our destination pick up.

How about the Rs400 million contract with Liverpool for adverts?

That decision was taken before Covid-19...

It was taken after January when the virus was already rearing its head in many countries. Isn't that short-sighted? Maybe extravagant?

No, I think it's a bold move...

Is it justified?

We will know if it's justified two or three years down the line. It's a lot of money, I agree.

Can we afford it?

Yes! It's a bold move that shows thinking out of the box. I have been wanting this country to organise a big worldwide event. I never thought of this one but it is a bold move. I don't know how it will work out. Tough luck for us that matches are being postponed and I hope we can negotiate an extension for a year. Now even if people see Mauritius, they can't fly to it. So it's a bit of a waste but it's a positive thing. Good or not good, let's see three years from now.

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