Cyprus expects another record year for tourism, President Nicos Anastasiades said on Tuesday but he conceded there were structural weaknesses in the industry that stop the island from exploiting its comparative advantages.
He said the island needed to re-brand itself.
In an address at an event in Nicosia to mark 80 years of the Cyprus Hotel Association (PASYXE), Anastasiades said it was not a coincidence that 2016 was set to be another record year because following on from last year, which saw arrivals rise 9 per cent to 2.7 million, specific goals had been set that resulted in “a record notable performance”.
The figures so far this year, he added were “undoubtedly encouraging”.
Compared with 2015, tourist arrivals for the period January-April 2016 increased by 21.9 per cent with almost all major markets recording large increases, while total revenue by March had increased by 18.7 per cent, he said.
“These results, which, while not making us complacent us in any way, show that the intensive efforts of all tourism partners, both public and private sectors is bearing fruit,” he added.
This included the simplifying of visa processes and “the tens of agreements with airlines and tour operators”, to further increase the programme and the availability of airline seats.
“What we all confess, and which we have publicly acknowledged, is that the tourism sector suffers from some distortions and structural weaknesses that do not allow it to fully exploit its comparative advantages.”
Anastasiades said problems still existed, such as seasonality, a tendency towards overdependence on any single market and lack of competitiveness, “but also the need for a global re-branding of our tourism product’’.
The president spoke of the reforms to the sector that are in the offing, which include the biggest change – the creation of an under-ministry for tourism that would take on much of the function of the Cyprus Tourism Organisation (CTO) such as licensing. The CTO in turn would be mainly responsible for promotion.
The new strategy and regulatory framework would first have to go to parliament, however, he said.
“We are in the final phase of these big changes, which will soon be submitted in the form of draft legislation,” the president said.
Anastasiades said he looked forward to working closely with the parliamentary parties following last month’s election.
“There are certainly differences, there are parties who disagree with some of the government policies but what I believe is that none of the parties will put second the interests of our country. I am sure that those bills that do not impinge on possible ideological differences, we will find common ground and cooperation,” he added.
He also made an appeal to hoteliers to make sure their facilities and staff training, and the general quality of service they offered “reflects the image of Cyprus”.
“You should not overlook the fact that you are the main face of Cypriot hospitality,” Anastasiades said.
He referred the state’s previous ‘gentleman’s agreement’ with hoteliers to hire more Cypriot staff, which has run into trouble recently with unions as hoteliers have complained that pay demands are much higher, resulting in larger costs as they are governed by collective agreements.
The president said the state cannot forbid the hotels from hiring who they like “but we encourage and urge and, if desired, humbly advise” them to put Cypriot hospitality on the frontlines of the industry and not to neglect the local workforce. “I am sure that we share the same goals and objectives,” he added.
Anastasiades reminded the hoteliers of the government’s employment subsidy programme that could help them reduce their hiring costs and which would help them stay open during the off-season. He said the CTO would also be launching a grants scheme for the modernisation of the industry for the period 2014-2020 estimated at €14m but it could go as high as €16m. “It is expected that this will result in investments in the order of €50 million in the tourism industry,” he added.
Responding to the president, PASYXE chairman Haris Loizides said the role of tourism in combatting unemployment was catalytic, adding that between 2008-2015 the number of workers in the industry had increased by 4,000.
He noted however that there was a shortage in all areas despite the high general level of unemployment in the country, and also that even though they were willing to hire Cypriots, recently in the Famagusta area where 1,300 Cypriots people were listed as jobless, only four had applied to the district labour office for advertised jobs in the sector. “We must finally stop remembering tourism only when everything else around us is crumbling and we are looking for something to grasp,” he said.