Cyprus Mail

Hotels to benefit from €315bn EU investment fund

President Anastasiades addressing the annual general meeting of the Cyprus Hotel Association

By Angelos Anastasiou

THE creation of a government body that will facilitate the absorption by the hotel industry in Cyprus of funds from the ‘Juncker package’ – a €315bn investment plan to spur growth across the European Union – and the improvement and upgrade of the tourist product, was announced by President Nicos Anastasiades on Friday.

Addressing the annual general meeting of the Cyprus Hotel Association, Anastasiades said a new national strategic plan for tourism is being devised, “aiming at placing Cyprus back on the tourist map”.

“What I want to repeat is the creation of a body that will help us absorb funds from the European Commission President Jean Claude Juncker’s new growth policy, comprising €300bn or so,” he told Cypriot hoteliers.

Noting that individual hotels may not draw on the investment plan themselves, Anastasiades explained that “through the efforts of a single body we may absorb funds to help you renovate and upgrade the country’s tourist product”.

He added that an ongoing joint effort by the Undersecretary to the President and the Commerce minister to devise a national strategy will make the most of Cyprus’ comparative advantages “so that we can strengthen our position in the international competitive arena”.

“The aim of this strategy is to reposition Cyprus on the tourism map, promote important infrastructure projects, address and resolve issues in the tourist sector, and many more,” Anastasiades said.

He added that experts have been tasked with drafting, revising and modernising laws and regulations governing various matters of the tourism sector, and the study is expected in the next two months.

“The ultimate goal is the promotion of entrepreneurship, competitiveness, and growth in our tourist sector, through the simplification and consolidation of procedures, the reduction of administrative cost, and the preparation of a finalised revision of the regulatory framework,” he said.

Anastasiades described the convoluted procedures that need to be followed in order to operate a “restaurant, a pub, or even a coffee-shop”, for which up to 32 applications may be required.

In his speech, the President deemed tourism one of the main drivers of economic growth, adding that “the dire economic situation our country was driven to in the last few years has rendered the importance of tourism in the comprehensive and enormous effort for economic recovery and the return to growth even greater”.

In terms of the blow on tourism from Russia due to the devaluation of the rouble, Anastasiades said the reduction has been contained to 18 per cent until May, while the drop has been matched by increases in other traditional tourist markets, including the United Kingdom with a 16.4 per cent rise, Germany with 26.5 per cent, and Greece with 40.6 per cent.

Association chairman Haris Loizides said that the recovering economy warrants taking the next steps.

“We should plan our new national tourism strategy, our new tourism brand, but this time, in addition to planning, we should prove equally efficient in implementation,” he said.

According to Loizides, planning should focus on improving competitiveness and extending the tourist period.
He noted that improving competitiveness requires the reduction, or stabilisation, of cost.

“Unfortunately, the hotel industry continues to be burdened with a series of taxes and fees, in addition to high labour and energy costs, which place our tourist offering at a disadvantage relative to the offerings of other competitive destinations,” he added.

Loizides proposed low-cost funding from banks, reduced VAT rates on tourism services, and repeated that the taxation of immovable property at today’s levels does not only make hotels uncompetitive, but also discourages foreign investment.

But in terms of the prospects of tourism in 2015, he said the first five months recorded a 9.6 per cent increase in arrivals year-on-year, noting that this is attributable to increased arrivals from traditional markets like the United Kingdom, Germany, and destinations like Israel, Ukraine, France, and the Gulf countries.

Cyprus Tourism Organisation chairman Angelos Loizou said extending the winter period is the top strategic priority, noting that the continuous decrease in arrivals of recent years seems to be reversing.

“It is extremely important that the continuous drop of recent years has been reversed, since the 2014-2015 winter period from November to March showed a 9.5 per cent increase in arrivals, versus the same period last year,” he said.

He added that in order to consolidate the reversal, “targeted advertising campaigns and marketing activities are being carried out in all major markets, and we are in talks with airline representatives for starting new flights to and from Cyprus”.

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