Mauritian luxury hotel group Sun Resorts Limited SUNR.MZ said intense competition in the the palm-fringed island’s key tourism industry was forcing operators to cut prices, and the outlook was tough.

The group, which owns four hotels including a five-star complex, on Monday reported third-quarter revenue that fell 7.7 percent year on year to 611.4 million rupees ($20.5 million) and a net loss that narrowed 8.3 percent to 105 million rupees, sending its shares sharply lower.

The global economic downturn has dented growth in one of Africa’s traditionally most stable and prosperous economies, where tourism typically generates about 10 percent of gross domestic product and European tourists account for some two thirds of arrivals.

Competitor Naiade Resorts NRL.MZ last month saw nine months net losses balloon to 357.8 million rupees from 29.3 million and also warned of uncertain times ahead.

“The third quarter was still impacted by the economic climate prevailing in our source markets,” Sun Resorts said in a statement. “Thus, both occupancy and rates were under pressure as the market was flooded with promotional packages to achieve volume.