The tourism industry is at a turning point. Government is being urged to rethink its strategy of promoting an exclusive high-class destination. Mauritius should instead target a mix of segments that are looking for quality locations at competitive rates. One key bottom line of this strategy is to improve room occupancy. Another rationale is to encourage holidaymakers to spend more during their stay in Mauritius.

Expanding shopping opportunities can be a powerful tool to transform a destination. Dubai is the model to emulate as a country offering a unique shopping experience to its visitors merely a decade after having been established as a successful trading port in the Gulf sea area.

What do we have on offer to make this kind of turn-around a reality? Mauritius will have many stumbling blocks to overcome before making itself known as a world-class shopping hub.

The Ralph Lauren episode, despite all its downsides, does teach us a lesson or two. The shops have been able to attract tourists out of their hotels to spend (lavishly) on what they saw as international branded garments at affordable prices.

The industry has been very naïve to believe that local handicraft products have got what it takes to enthuse the visitor. The country never really thought about integrating its strengths in apparels into an exhaustive tourism product. The former ?Ralph Lauren system» has shown the way in a most overwhelming manner. The system should be revived in a more law-abiding mode, though.

Mauritius must be seen as a place where luxury products of international fame can be purchased at competitive prices. Laws and regulations are already in place to protect trademarks and franchises. But the economics is not there as yet. For branded garments to come at affordable prices on the local market, they should be either produced locally through relevant franchising agreements or imported free of duty.

Government is already working on a strategy to compete with places of the likes of Singapore and Dubai. Policymakers have an ambitious plan to abolish duties on a large number of items over the coming years. There is a strong case for making Mauritius a duty free island much sooner rather than later.

This implies a strategic overhaul of the tax system since import duties are a major source of government revenue. The focus should be moving gradually towards direct taxes and value added taxes to make up for the drop in revenues accruing from international trade. The overall tax structure should be more reflective of the country?s vision of developing into a value-added services economy.

Government will unveil the main elements of its new policy during the next budget. However, the budget deficit problem could act as a major hindrance to an aggressive stance towards relaxing import duties.