By Sinead Kelly
THE Cyprus Tourism Organisation (CTO) has concluded a deal with the largest British tour operator that is expected to significantly boost arrivals from the United Kingdom, commerce minister Giorgos Lakkotrypis revealed yesterday.
The minister also said that casino licences, another major boost for tourism, should be expected by Spring 2015 while related legislation is scheduled to be ready at the end of this month.
“We have completed the policy document and legislation is being prepared at this moment to be submitted to parliament by the end of May,” Lakkotrypis said.
When commenting on the UK deal, the minister avoided naming the tour operator. However, TUI, which owns Thomson and First Choice among others, is said to be the UK’s largest operator and is already heavily invested in the Cyprus market. .
Lakkotrypis said authorities project a doubling in British tourist arrivals in the 2014-2015 winter season, and an up to 35 per cent rise for the 2015 summer season. “For us, it is an important agreement as it will allow us to reverse the current negative trend from mature markets,” Lakkotrypis said.
Although it is still the mainstay of Cyprus’ tourism, the UK market has been on a steady decline since its peak in 2001 when 1.5 million Britons visited the island. By 2004 numbers had fallen to 1.3 million. By 2010 they had dropped to 996,040 and by last year to 891,229 amid criticism from UK operators that Cyprus had left the British market on autopilot while actively pursuing newer sources of arrivals such as Russia whose numbers have jumped from 83,816 ten years ago to 608, 576 last year.
Lakkotrypis said the new deal with the UK operator was primarily geared at boosting winter tourism, adding that efforts were underway to strike up similar arrangements with German tour operators.
“We are cautiously optimistic about tourism for 2014. From flight bookings so far, this looks to be a good year, assuming there are no other external factors that could negatively impact tourist traffic,” he said.
The minister was speaking to the press shortly after briefing the House commerce committee on the deal with the British tour operator and the CTO’s forecasts for this year.
MPs also sounded an upbeat note. Committee chairman Lefteris Christoforou spoke of a likelihood of higher tourism revenues this year compared to 2013.
Estimates placed 2014 revenues at around €2.5bn, he added.
AKEL MP Costas Costa said the news from the Russian and Ukrainian markets was “particularly positive,” noting that to date there have been no cancellations while bookings from Ukraine are on the up.
EDEK’s Giorgos Varnava noted that tourism was the only industry that had remained robust amid the financial crisis and has become the economy’s backbone. Businessmen must drop their prices and improve quality of tourism services to compete with rival tourist destinations, but need government support to do that, he said.
Earlier this week Haris Loizides, head of the Cyprus Hotels Association, said Cyprus had been counting on an increase of between 20 and 25 per cent in tourism from Russia this year to help it weather the fallout of the economic meltdown.
He said the political turmoil in the Crimea and Ukraine has considerably slowed down bookings, adding that as things stand Cyprus would be fortunate to have an increase of 10 per cent in Russian tourists.
Loizides pointed out that hoteliers also had to adjust their tourism package downwards to compensate for a devaluation of the Russian rouble against the euro.
Despite the difficulties, the prospect of a casino in the coming years is seen as an additional boost. Lakkotrypis said the government expected to issue the licences eight months after the law was passed, through open tender procedures. And although the majority of deputies were yesterday pleased with the development, Costas Costa, his AKEL colleague, reiterated his party’s disagreement with the decision to license casinos.
The previous administration under Demetris Christofias had flatly refused to consider the creation of casinos on ideological grounds, consistently brushing off suggestions that Greek Cypriots could spend their money at casinos in the Republic as opposed to the occupied north, which is currently the case.
On coming to power last year, the government asked the CTO to update a 2007 study into the creation of casinos to help them decide on the form they would take – whether they will be accompanied by other development projects.
In October, a meeting between the president and interested stake holders revealed the single casino licence will provide for an integrated resort in one district plus two more branches, or satellite casinos in two other districts.
The original CTO study into developing casinos predicted annual revenues for the state of between €35 and €50 million, as well as a significant boost in employment opportunities.