Cyprus Mail

Dealing with the growing issue of all-inclusive holiday packages

By Anna Farmaki

THE debate surrounding the all-inclusive holiday package has been on-going in the past few years, with experts and tourist stakeholders expressing diverse opinions as to its effectiveness and benefits. According to recent research conducted by the CTO, tourists from the UK arriving to Cyprus on the all-inclusive package account up to 40% whereas a staggering 80% of Russian arrivals select all-inclusive holidays. With total tourist arrivals from the specific markets, which prefer the all-inclusive package exceeding 500000, tourist authorities as well as businessmen have expressed their concerns over the popularity of the all-inclusive product in Cyprus.

Considering that an additional number of tourists from other markets arrive to Cyprus on all-inclusive packages, it is evident that the tourist market of the island is highly dependent on the specific holiday package. With the popularity of all-inclusive holidays increasing worldwide, due to the comfort and affordability it offers, it is necessary to place the concept of all-inclusive packages at the centre of discussion.

Whilst the CTO does not forbid the offer of all-inclusive packages in Cyprus, tourist officers and experts have expressed in the past their concerns of hoteliers’ tendency to offer all-inclusive holiday packages, as a response to foreign tour operators’ pressures. Large tour operators, such as First Choice, have transformed their holiday packages to all-inclusive while Thomas Cook has increased its all-inclusive holiday offerings by 10%. Such decisions have not been taken lightly by tour operators. By encouraging their customers to leave their wallets at home, tour operators benefit from all-inclusive packages in two ways. Firstly, they meet the needs of an economically restricted market, as tourists demand more affordable prices and safer holiday options, and secondly they maintain control over the quality of the tourist product they sell. Ultimately, hoteliers benefit due to pre-bookings which allow them to conduct a more accurate calculation of profit and increase their efficiency.

The biggest losers in the industry seem to be the local entrepreneurs such as restaurant and shop owners, tour guides and taxi drivers. ‘Empty’ restaurants and bars seem to be the scene that has become the norm in Mediterranean destinations. Many locals blame the all-inclusive tourism product, stating that it creates ghost-towns as the majority of tourists remain confined in hotel resorts. Whilst in developing countries such as India and Kenya the all-inclusive package may be a safer option in terms of catering and entertainment needs, in the traditional Mediterranean destinations a range of local businesses are under threat. Statistics have shown that only 10% of tourist spent is circulated in the local economy, leading to an increase in regional unemployment.

Obviously in its current form, the all-inclusive product is problematic as it promotes the creation of tourist resorts, excluding the local entrepreneurial sector. Additionally, it encourages the leakage of money to foreign tour operators. Indeed, the all-inclusive holiday concept does not coincide with the principles of sustainable development. Yet, fighting against the all-inclusive in a financially stricken period is not a wise tactic. On the contrary, any activities combatting the product might yield undesirable effects, considering the increase in the popularity of all-inclusive holidays.

In other tourist destinations measures for minimising the problems of the all-inclusive have been undertaken successfully. For instance, the transformation of the all-inclusive package to a ‘more inclusive’ one has been widely discussed as a sustainable option. This can be achieved by enhancing the current all-inclusive package through the inclusion of dining coupons in local restaurants or entrance tickets to thematic parks and museums.

However, in order to enhance the all-inclusive product the cooperation of all tourist stakeholders is needed. The creation of a network through which tourism clusters are promoted is required. Collaboration may bring benefits for all parties involved in the tourism industry through the common promotion of products, exchange of knowledge and collective support. The all-inclusive package is possible to contribute to the local economy if it is based on the right principles and adopts a collective character, without excluding local businessmen. The CTO’s role in encouraging a collaborative spirit is fundamental. Regulation needs to be established to minimise the negative impacts of all-inclusive packages and strengthen the potential of synergies among stakeholders. Better management and collaboration might be the key requirements for the successful development of Cyprus’ tourism industry. It is on these pillars the CTO’s future strategy needs to be based.

Dr Anna Farmaki is Course Leader, BA (Hons) Hospitality and Tourism Management, School of Business and Management at the University of Central Lancashire (UCLan) Cyprus

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