Why some businesses are closing while others are thriving

We have studied the announcement by the small shopkeepers association (Povek) warning the state not to reduce the subsidies being paid to shopkeepers. The union declared that approximately 20-25 per cnet of the shops in Famagusta have closed down and if the subsidies are reduced or terminated, the percentage will increase.

It is a fact that tourist numbers have fallen but it is worth looking at the details. We refer to the Protaras and Ayia Napa area which Povek’s argument is based on.

In our opinion the shops that have closed or seen a reduction in clientele are those whose owners aren’t up to running a successful business. The various souvenir shops that are everywhere for example sell all sorts of rubbish that is made in China. Looking at the souvenirs in other countries, like handicrafts made locally, there is no comparison. Quality products are for sale in most countries we compete with and even small Malta has souvenirs depicting the local history and architecture made locally. Similarly, our large supermarket style souvenir shops with cold décor and indifferent contribute to their downfall.

Is it not strange that some restaurants are struggling while others in the same locality do two sittings per night, with many requiring a reservation well in advance?

Is it not also strange that quality venues with food costing €50 per person have a high occupancy rate with the cheaper places costing €20 a head have a very low occupancy?

Why are some of the entertainment venues located half an hour from the tourist centres (like in Frenaros, Dherynia and Sotira) extremely successful?

A pub geared towards sports fans, charging reasonable prices and providing light snacks, is another destination where one would be lucky to get a seat. Nice decor, large television screens placed everywhere with the volume low and entertaining hosts are some of the reasons for its success.

One café with a guitar player is successful with on average 50-60 clients during the day and around 100 in the evening, whereas on the other side of the road another is struggling because we believe, having visited both, that the second establishment has no clue about how to do well.

Another example concerns our national dish ‘souvlaki’. There are five or six establishments in the area selling it but four of them cook the souvlaki on a hot plate as opposed to charcoal. It is not surprising that the two which use charcoal have a queue of customers outside and a most profitable take away business, while the others are stuggling.

Now that we are facing difficulties with tourism, we believe that more shops and venues will close down beginning with those who have no knowledge of the work, unqualified staff and bad management.

When it comes to the real estate business we see demand relating in part to the facilities provided in the area. It is with satisfaction that we note that quality places are in high demand upgrading the quality of life for local and foreign property owners. We attribute the increased demand for holiday homes to this in part. Holiday homes in the region of €250.000-€300.000 are hard to come by while beach units have reached in the area of €1.5 million, and are again difficult to find.

Cypriot tourists who have a higher budget and mobility have learned to shop around and seek quality establishments. We feel that quality pays, and clients are willing to spend more than was thought. Covid is one of the reasons local tourism has risen and we expect that quality will come to play an increasing role in the success of local businesses.

Although we may sound cruel dear Povek, if businesses are not up to scratch, more and more will close down and those who do not know how to operate, have no chance of survival.

Antonis Loizou & Associates EPE – Real Estate Valuers, Estate Agents & Property Consultants, www.aloizou.com.cy, [email protected]