By Marie Kambas
CYPRUS’ hopes that the economy could receive an extra boost from tourism next year are vanishing as promising news from the UK, the country’s largest market, have been tempered by developments affecting Russia, the second largest.
“The good news is that there seems to be prospects for an increase from the British market for next year,” said Michalis Maratheftis communication director of Louis Group, in an email interview .
More positive was news for the 2015 winter programmes was that traditional partners from the UK such as TUI and Thomas Cook, the two largest UK tour operators, were increasing their flights to Cyprus.
Britain’s economy is expected to grow next year at a slower rate of 2.6 per cent, compared to 3.0 per cent this year, according to a September survey carried out by the UK treasury among banking and other business organisations.
Since January 1, the British pound gained more than 6.0 per cent on the euro, which makes holidaying cheaper in euro area countries for Brits.
Cyprus’ economic output shrank 5.4 per cent last year and is expected to further shrink 4.2 per cent this year, according to the finance ministry. In January to August more 1.7 million tourists visited Cyprus, which was 5.9 per cent more compared to 2013, according to the latest statistical service data. In 2013, arrivals fell 5.3 per cent to 1.6 million compared to 2012.
The London based World Travel and Tourism Council, estimates that directly or indirectly, the Cypriot travel and tourism industry, which contributed one fifth to the economy last year, will see its contribution rise to around one quarter this year.
Tourists from the UK make up more than 35 per cent of total arrivals to the island. It reached its peak in the early 2000s at more than 50 per cent of all arrivals to Cyprus but the market has slackened off, and according to some in the industry, has been ignored by Cyprus in favour of pumping up numbers from Russia.
While the bankruptcy of two Russian tour operators this year has caused concern within the Cypriot tourism industry, it is not expected to greatly affect the flow of Russian tourists to Cyprus, according to Maratheftis. “Luckily, these were not the leading Russian tour operators for Cyprus or indeed in general,” he said.
Still, other factors affecting Russia may impact the performance of the tourist sector next year, according to the chairman of the Association of Cyprus Tourist Enterprises (ACTE), Akis Vavlitis.
“Events concerning Russia and Ukraine affect everyone specially our tourism industry,” Vavlitis said in an email interview. “Political turmoil, the recent dramatic devaluation of Russia’s currency, the domino effect of a large number of tour operators going bankrupt, the lack of confidence in Russian tour operators, the exposure of many hotels following the consecutive bankruptcies, are of concern for us and forces us to create additional methods to confront them in order to limit the negative impact on Cyprus”.
The chairman of ACTE, which represents mainly four and five stars hotels, said that he expects for the rest of 2014 arrivals will continue to increase compared to 2013.
Tourists from Russia accounted for 28 per cent of total arrivals in the first eight months of this year. Russia, whose oil sector was the target of economic sanctions by the European Union and the United States in recent months over its role in the crisis in Ukraine, saw its currency, the rouble, devaluate by as much as 10 per cent against the euro, according to the European Central Bank.