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Cyprus hotels struggle with insolvency

Hotels Paphos Luxurious Seaside Hotels By Evening Republic Of Cyprus
Hotels empty in Cyprus

Following a summer marred by the ongoing coronavirus pandemic the situation being faced by the island’s hoteliers remains dire, and prospects are bleak.

According to the Cyprus Hotel Association (Pasyxe) and the Association of Cyprus Tourist Enterprises (ACTE), which counts among its members some of most prominent luxury hotels in the island, the financial situation at the moment does not leave room for optimism.

“The virus has left an indelible mark on the tourism industry and on hotels in particular,” Pasyxe director general Philokypros Roussounides told the Cyprus Mail.

“While no hotels have yet permanently closed, most are struggling with insolvency, a situation that has never happened before in Cyprus.”

Although there have been more arrivals in Cyprus from the UK in August and in September, the number are just not high enough to make a difference for hoteliers.

Last year, around 250,000 British tourists visited Cyprus in August. Along with the Russian market, the UK is the most important for the island as it comprises around 60-70 per cent of the tourists that come in via tour operators.

With the new restrictive measures announced on Tuesday in the UK, it is now even more unlikely to see a growth in the number of tourists booking hotel stays in Cyprus for the upcoming period.

“Hoteliers might get some help from a possible extension of the current moratorium on loan instalments,” said Roussounides.

“We are currently in talk with several banks, as this could help people working in the hotel industry massively.”

As far as the current occupancy rate, the numbers are simply disheartening, also taking into account that the summer period in Cyprus is usually over between the end of August and the beginning of September.

“During the week, we now have a 10 per cent occupancy rate, which increases to 25 per cent during the weekend. It’s a very low rate even for September. We were prepared for it but that does not mean it is less concerning for hoteliers in the island,” Roussounides said.

The same bleak picture was outlined by the Acte general manager Chrisemily Philogeni, who told the Cyprus Mail that most of the association’s members would be forced to close their doors at the end of September.

“There haven’t yet been permanent closures yet,” she said. “However, most hoteliers are reporting a deep insolvency due to the very limited arrival of foreign tourists this past summer.

“As a result, the majority of hotels will not be able to reopen their doors until next year’s spring.”

Philogeni added that no one in the tourism industry was prepared to face such a situation and that the pandemic could mark a new era for hotels in Cyprus.

“The most crucial change will arrive when a vaccine will be released on a world scale,” she said.

“Hopefully it will arrive by next year, only then hoteliers will be able to resume their operations normally. In case the release of the vaccine will be delayed, we could potentially face another difficult summer in 2021 as well.”

Meanwhile, the Deputy Ministry of Tourism announced on Wednesday that an additional 80 hotels had joined the special support scheme for domestic tourism.

The scheme, which was launched on September 1 and will run until November 30, aims to encourage locals to take their holidays in Cyprus through providing affordable prices for hotel rooms and covering 25 per cent of the cost of the accommodation.

The deputy ministry of tourism is hoping that the scheme “will help contain the recession in the economy which has hit the tourist industry harder than most, and to maintain employment during the coronavirus pandemic.”

An updated list of all the hotels participating in the scheme can be found on the website of the Deputy Ministry of Tourism at www.visitcyprus.com/domestic-tourism-2020, or at travel agencies.



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