Mauritius Hotels: Earnings Multiples and Tourism Sector Review

During September, Mauritius' three listed hotel groups published their audited annual results for the year ending 30 June 2026:

Sun Ltd (SUN)

New Mauritius Hotels (NMH)

Lux Island Resorts (LUX)

We look at them for benchmarking hotel valuation multiples and also to capture an overview of the tourism sector.

At the close of 28 September 2026, the three names traded at a market-cap-weighted of 4.5x EV/EBITDA.

Combined EBITDA rose 20.6% to Rs 11.7bn, which on the face of it may appear impressive.

But most of that growth came from currency. The euro averaged 7.4% more rupees in FY26 than in FY25, and underlying growth in euro room rates was only 1% to 4%.

On the risk side, the multiples reflect higher taxes, Gulf airline disruption and, at NMH, high leverage.

Valuation and leverage

Company	Market cap (Rs m)	EV (Rs m)	EV/EBITDA	Adj. net debt/EBITDA	Gearing (reported)
SUN	6,193	12,029	4.8x	1.7x	12.8%
NMH	6,917	28,578	4.7x	3.5x	40.0%
LUX	6,582	12,667	4.1x	1.9x	19.4%
Cap-weighted	19,692	53,274	4.5x	2.4x	24.6%

Adjusted net debt is borrowings adjusted for lease liabilities and hybrid capital (MIC convertible bonds at SUN and LUX, and preference shares at NMH) less cash. Enterprise value is market cap plus adjusted net debt and minority interests. Reported gearing follows each company's own definition.

Note: NMH does not disclose FY26 lease liabilities in its abridged accounts. Its Rs 5.9bn right-of-use asset is used instead.

NMH carries net debt of 2.0x EBITDA, or 3.5x including leases and preference shares. Equity makes up 24% of its enterprise value, against 52% at SUN and LUX.

All three convert most of their EBITDA into cash, but they used it differently in FY26.

Company	Cash, 30 June 2026 (Rs m)	Change in year (Rs m)	Operating cash flow (Rs m)	Cash conversion (OCF/EBITDA)	Net investment (Rs m)	Cash / market cap
SUN	963	−53	2,476	99%	341	16%
NMH	2,801	+2,384	5,789	95%	1,220	40%
LUX	905	−599	2,464	79%	1,832	14%

SUN used its cash to cut debt. It redeemed Rs 500m of its MIC convertible bond early, cut net debt 17% to Rs 1.22bn and raised its dividend 33% to Rs 3.45 a share.

NMH built cash almost sevenfold, helped by a Rs 1.46bn preference share issue and about Rs 1.5bn released from its Moroccan property restructuring. The cash is earmarked for the Zanzibar acquisition and a 150-key hotel in Marrakech. Net debt remains the highest at Rs 12.2bn.

LUX spent on the land under LUX* Saint Gilles, prepaid Rs 750m of MIC bonds and repaid Rs 675m of loans. Cash fell to Rs 0.9bn and gearing rose to 19.4%, against a board limit of 45% for its 2027–2028 renovation programme.

Excluded. Riveo and Beachcomber Hospitality Investments are property-holding vehicles and are left out. BHI earns euro rent from hotels leased to NMH. Riveo posted a 13.1% EBITDA margin during a renovation year.

Operator performance: pricing drove margins

All three groups expanded margins in FY26, led by higher room rates in rupees. It would appear that most of that rate growth came from a weaker rupee.

Company	Rate and revenue	Occupancy	Margin
SUN	ADR +10.8%; RevPAR +9.5%; hotel revenue +8.7% to Rs 6.44bn	Not disclosed	Group EBITDA margin 33.1% (FY25: 31.8%)
NMH	TRevPAR +12% to Rs 19,407	73.1% (−0.3 pts)	Mauritius EBITDA margin 32.6% (FY25: 28.3%)
LUX	Maldives income −1.6%	Mauritius 87% (FY25: 85%); Réunion 78%; Maldives 67%	Normalised EBITDA margin 27.4%

NMH achieved its gains despite temporary closures at Shandrani and Trou aux Biches. LUX's Maldives resort was hit by lower Gulf-routed traffic.

Exchange rate: the main driver of FY26 growth

The euro averaged Rs 53.90 in FY26, against Rs 50.20 in FY25, a rise of 7.4%. Mauritian resorts price mainly in euros and sterling, so the same euro room rate converted into 7.4% more rupees.

Stripping out that effect shows how much growth was real. The estimate below assumes revenue is priced in euros; sterling and rupee revenue make it approximate.

Hotel/Metric	Growth in rupees	Estimated growth in euros	Share explained by currency
SUN	8.7%	1.2%	~85%
NMH	11.9%	4.2%	~60%
LUX	10.2%	2.6%	~70%
Tourism earnings, H1 2026	17.9%	8.5%	~50%

In short, the weaker rupee explains most of the rise in rupee-denominated pricing. Between 60% and 85% of each group's rupee revenue growth reflects currency translation; underlying growth in euro rates was 1% to 4%.

Why margins widened. Revenue is earned in euros while wages, food and utilities are paid in rupees. A weaker rupee lifts revenue without lifting most costs, which explains much of the margin gain at SUN and NMH.

Why it cuts both ways. Part of the groups' debt is in euros, so a weaker rupee also raises the rupee value of that debt. NMH booked a Rs 25m exchange loss on retranslation. If the rupee recovers, both revenue and margins would fall back.

The tailwind is fading. The euro traded at Rs 54.14 on 26 September 2026. It averaged Rs 54.26 in July-September 2026, only 1.8% above the same quarter of 2025, compared with 7.4% for FY26 as a whole. FY27 revenue growth will need to come from rates and volumes rather than currency.

Taxation: rising costs from FY27

The Fair Share Contribution and Alternative Minimum Tax, introduced from 1 July 2025, added Rs 108m to SUN's tax charge. LUX's tax charge rose 32% to Rs 325.7m.

The 2026-27 Budget adds further pressure from 1 July 2026. It halves the hotel annual capital allowance to 15% from 30% and removes the 150% deduction on renovation spending. Both changes arrive as NMH refurbishes Dinarobin and LUX renovates Le Morne, Saint Gilles and South Ari Atoll. A €3 per night tourist fee has also applied since October 2025.

Air access: Gulf disruption

IATA expects Middle East airlines to move from a $7.2bn profit in 2025 to a $4.3bn loss in 2026. Higher jet fuel costs are raising long-haul fares, and Lufthansa is cancelling 20,000 flights through October 2026.

Mauritius depends less on Gulf hubs than the Maldives, where Gulf carriers supply close to 70% of seat capacity. The exposure is still material: 70.7% of Russian visitors to Mauritius in the first half of 2026 travelled via the UAE.

Sovereign rating and interest rates

Moody's rates Mauritius Baa3 with a negative outlook, the lowest investment-grade level. A downgrade would raise local borrowing costs.

The Bank of Mauritius raised its Key Rate by 25 basis points to 4.75% in May 2026, the highest level since 2013, and held it in August. It forecasts 2026 inflation near 5% and GDP growth of 2.8%. Higher rates raise both interest costs for the more leveraged groups, notably NMH, and the discount rate applied to hotel cash flows.

Tourism: earnings growth outpaces arrivals

Mauritius received 1,436,250 tourists in 2025, up 3.9%. Tourism earnings rose 10.4% to Rs 103.4bn. Hotel room occupancy averaged 74%, up from 72%, and 76% at the 61 large beach hotels.

First half 2026. Arrivals rose 1.5% to 668,471, while earnings rose 17.9% to Rs 55.9bn. Spending per tourist increased 16.2% to Rs 83,613. Part of this growth reflects higher room rates; part reflects stronger euro and sterling receipts converted into rupees.

Occupancy eased. Licensed hotels averaged 69%, down from 70%. Large hotels averaged 70%, down from 72%. Four hotels were closed for renovation at end-June, leaving 13,477 rooms in operation.

Source markets. France, the largest market, grew 0.8% to 153,048 in the half. Germany rose 13.4% and India 11.9%. The United Kingdom fell 16.0%, or 11,428 visitors.

Recent trend. Arrivals from January to August reached 927,735, up 2.7%. Regional competitors weakened: Seychelles fell 8.3% over the eight months and the Maldives 5.7% in the first half.

Outlook

SUN expects the quarter to September 2026 to beat the prior year, citing higher arrivals.

NMH reports forward bookings for the first half of FY27 ahead of last year. Trou aux Biches reopens in October 2026, Dinarobin is next for refurbishment, and a Zanzibar resort acquisition awaits regulatory approval.

LUX links the Maldives recovery to the Middle East conflict. Mauritius and Réunion continue to trade steadily.

The sector trades at a cap-weighted 3.7x trailing earnings after 21% EBITDA growth. With the currency tailwind down to about 2% and tax allowances cut, FY26 earnings growth is unlikely to repeat at the same pace, which the low multiples already reflect.

Investment considerations

On standard measures, the three stocks trade at low valuations. Whether they are attractive depends on how much of FY26's earnings an investor expects to hold.

Company	P/E (basic)	P/E (diluted)	Price / book	Dividend yield	Adj. net debt/EBITDA
SUN	4.3x	4.3x	1.20x	9.7%	1.7x
NMH	2.7x	3.5x	0.48x	6.3%	3.5x
LUX	4.2x	5.0x	0.62x	6.3%	1.9x

Supporting factors

•      Dividend yields of 6.3% to 9.7%, well above the 4.75% Key Rate.

•      Cash conversion of 79% to 99% of EBITDA.

•      Falling debt at SUN, and more balance-sheet headroom at LUX than at any time since the pandemic.

•      Forward bookings ahead of last year at NMH, and SUN guiding to a stronger September quarter.

•      Mauritius arrivals up 2.7% in January-August while regional competitors declined.

•      NMH and LUX trade below book value.

Risks

•      Between 60% and 85% of FY26 revenue growth came from currency, and that tailwind is down to about 2%.

•      Higher taxes from FY27, as capital allowances halve and the renovation deduction is withdrawn.

•      Gulf airline disruption, most acute for LUX's Maldives resort.

•      High leverage at NMH: 3.5x including leases and preference shares, with dilution from convertible preference shares.

•      Heavy renovation spending at NMH and LUX in 2026-2028.

•      A negative outlook on Mauritius' Baa3 sovereign rating, and a Key Rate at its highest since 2013.

On stock picking:

SUN combines the highest dividend yield with the lowest leverage but the highest price-to-book.

NMH is the cheapest on earnings and book value but carries the most debt.

LUX sits between the two and has the greatest exposure to the Gulf through the Maldives.

Valuing non-listed hotels

Treat the 4.5x cap-weighted EV/EBITDA as a starting point, treat leases consistently in both enterprise value and EBITDA, and justify each element of the private-company discount. Update the benchmark when September-quarter results are published in November.

This article summarises valuation data and risks for information only. It is not investment advice or a recommendation to buy, sell or hold any security. iegen provides consultancy services and does not provide securities or investment advice. Readers should consult a licensed investment adviser before making investment decisions.