Cyprus Mail

2015 set to be challenging year for tourism

By Jean Christou

Tourism prospects this year will be just as challenging as the last, tourism minister Giorgos Lakkotrypis said on Tuesday.

Lakkotrypis said last year had shown just how “vulnerable, sensitive and changeable” the tourism industry was.
“The year just passed showed us two faces,” he said, addressing the annual conference of the Cyprus Hotel Association (PASYXE) in Nicosia. The first half, Lakkotrypis added, was satisfactory both in terms of arrivals, and in terms of revenue with a six per cent increase in the former and a 12 per cent increase in the latter, “showing that initial estimates for a good year would come to pass”.
“In the second half, however, things changed,” the minister added, “showing once again what all those involved in the sector have experienced repeatedly; that tourism is vulnerable, sensitive and changeable”.

Lakkotrypis said priority markets such as the UK, the Nordic countries and especially Russia had gone downhill in the second half and only barely made it to the previous year’s levels of arrivals.

The year ended with a slight increase in arrivals of 1.5 per cent, or some 2.4 million.

This year would also be difficult and challenging, he said.
“The Russian market is uncertain and tour operators there are considering whether and to what extent they will take risks. On the other hand, there are encouraging signs from other major markets, such as the UK and Germany, but also in smaller markets of Central Europe and the Arab Gulf,” he said.

The Cyprus Tourism Organisation has already said that the sector could withstand a drop from Russia of no more than 25 per cent as anything up to that could be made up from other markets. If this drop was bigger, then Cyprus would face serious problems. Indications from the UK last week showed that bookings were up for the coming summer season due mainly to a more attractive exchange rate for Britons.

Lakkotrypis said the government had also succeeded in promoting new air routes to and from Cyprus from Barcelona, Rome, Berlin, Munich, Hamburg, Vienna and other cities. Beyond that, he said there were plans for promotional campaigns which would include outdoor ads, radio and online advertising.

“We are also promoting new partnerships with tour operators, which are expected to deliver significant results,” he said. He also spoke of investment in a new marina in Ayia Napa and the creation of a casino resort, a new push towards business tourism, and cultural and religious tourism.

PASYXE chief Haris Loizides said “unfortunately”, bureaucracy remained an obstacle to efforts to restart the economy and attract investment, though he acknowledged that perhaps for the first time the problem looked like it might be addressed by the current government, which says it is bent on public service reform.

Tourism, he said was not “just another section of the economy” and that during the financial collapse, it again became the mainstay of the economy in 2013, which had even been acknowledged by the Troika of international lenders.

“Our country is ‘doomed’ to be an attractive tourist destination. The sooner we realise this, the more collective and more organised we can be to take the actions needed to support the sector and upgrade our product,” Loizides said.

He repeated long-standing demands of hoteliers for incentives and tax breaks, and said that in particular the recent introduction of the “unbearable” property tax, and the high cost of electricity were crippling many hoteliers, and that was in addition to loan payments and high interest rates.

“All these make us uncompetitive compared to other tourist destinations targeting the same markets,” he said. The data, he added, and the economic developments in Russia, did not leave much room for optimism for 2015 but it did offer the opportunity to expand into new markets “reducing our dependence on our two principal markets [Russia and the UK] and intensifying efforts to regain lost ground from our traditional markets of central and northern Europe,” he said.

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