Filenews 17 April 2022
By Panicos Charalambous*
With the tourist season opening and from next month the tourism industry essentially entering the straight for this year, what continues to hover as a question is how to make up for the loss of tourists from Russia and Ukraine and more broadly from the new crisis due to the Russian invasion of Ukraine. In essence how to close a hole of 90,000 of arrivals and about €550 million and whether 2022 will be significantly better than 2021 and close to the 2019 yields.
Recently, Deputy Minister of Tourism Savvas Perdios expressed the assessment that this year, despite the crisis due to the Ukrainian crisis, tourism will develop better than last year, mainly due to the efforts of recent years to expand the tourist markets of Cyprus.
Speaking at the General Assembly of the Pancyprian Association of Hotel Managers (PASYDIXE), he said that Cyprus will make up for the losses from Russia and Ukraine mainly from the markets of the United Kingdom, Israel, France and Austria.
As he said, for about eight months now "we are abroad and we have gone to at least 20 countries, some of which are key markets for Cyprus (...) because we wanted to prepare them as well as possible for this year." He added that "from this marathon of visits we made it seems that all markets, with the exception of only Russia and Ukraine, will do better than 2021" and then referred to the UK, Israel, Germany and France among others."
What the data show
But how feasible is what the Deputy Minister of Tourism expresses? Can the losses from Russia and Ukraine be made up?
According to data from the Statistical Service, in 2021, 519,174 tourists from Russia, 95,811 from Ukraine and 3,847 from Belarus visited Cyprus. It is even significant that arrivals from Ukraine were about 800 more than in 2019, the year in which tourism in Cyprus had recorded a record number of arrivals. The above shows that Ukraine was a market with a good future for Cyprus, if one considers that last year 2 million people visited Turkey. Ukrainian tourists.
As far as Russia is concerned, arrivals were expected for this year (before the war) to exceed 800 thousand, a number higher than in 2019, when 781,856 arrivals were recorded. In revenue it is estimated that Russian tourists brought to Cyprus in 2021 around €340 million. and the Ukrainians €47 million. In 2019 from Russia, Ukraine and Belarus came to Cyprus about 900,000 tourists and based on the average per capita expenditure of tourists from the three countries, the tourist income for Cyprus was estimated at around €550 million.
The best year for Cyprus in terms of Russian tourists was 2017 with 824,494 arrivals.
How will the hole be closed?
The next question is how to fill the gap of almost 900,000 arrivals expected from Russia, Ukraine and Belarus and the deficit of about €550 million? From which countries and from which markets? From which existing and from which new ones? According to the Deputy Minister of Tourism, the UK, Germany, France, Israel, Switzerland and Austria will do much better this year than in 2021.
Germany
Based on the data, last year arrivals from Germany had risen to 93,092, up from 60,430 in 2020 and 151,500 in 2019. Therefore, the least one can hope for is an increase in arrivals to 2019 levels. If this number is verified, then an increase of 58,000 arrivals will occur and tourist income increased by €50 million compared to 2021. In total, the tourist income from German tourists will amount to around €125 million this year.
But in relation to Germany, another question arises: Will the tourism industry and its constituents be satisfied if the 2019 numbers are met? Are the prospects from the German market much bigger?
Based on the data of the Statistical Service, in 2017 188,826 German tourists had arrived in Cyprus and 189,200 in 2018, i.e. about 33,000 more than in 2019. Therefore, our country could easily aim for the levels of 2017 and 2018.
The important thing, however, is that the profile of the German tourist refers to even more arrivals. The Germans are a people who are used to travelling outside their own country and a people who like a rest holiday. In 2019, 61% of the country's residents made a trip of at least five days. In fact, 21% travelled for more than five days twice in the same year.
In addition to trips to countries in Europe that can be made by car, Germans prefer trips based on the sun and the sea, a product that is the core of our country's tourism. The Mediterranean is a favourite destination for Germans. First in their preferences is Spain, followed by Italy, Turkey and Greece. Note that in 2021, 3 million people visited Greece. In 2018 German tourists numbered 4.3 million arrivals. In 2021, 3 million German tourists visited Turkey. The German pie is quite large and the Deputy Minister of Tourism is rightly hoping for better results for our country.
France
The second country to which the Deputy Minister of Tourism referred is France. According to statements by Mr. Perdios to the CNA, who recently visited Paris for meetings with tourist agencies of the country, "Cyprus, after three years of efforts, managed to enter the French market". He said that following coordinated actions by the deputy ministry, the Ministry of Transport and Hermes Airports, there are now 20 flights a week to and from France. This year, he said, there are 100,000 air seats available with five direct flights connecting Cyprus a week with the main centres of France. Therefore, the target for 2022 is a number of French tourists approaching 100,000, compared to 36,000 last year.
The French market is not unknown in Cyprus. However, in recent years it has not been pursued or, more correctly, we have not succeeded in making better use of it. The annual arrivals of French tourists in the decade (2012 - 2021) were limited to the range of 30 to 40,000. Most were recorded in 2016 (42,576 arrivals).
The per capita expenditure of French tourists based on 2019 data was estimated at €699.3, so tourism income in 2021 amounted to about €25 million with a view to reaching €30 million in 2022 if arrivals reach 2016 levels or between €63 million and €70 million if arrivals move between 90 and 100,000.
The United Kingdom's single market
I have recently left the large UK market, the most important and most traditional for Cyprus. In 2021, only 390,638 British tourists visited Cyprus, compared to 1,330,635 in 2019. De facto there is a huge pool of tourists from the UK for 2022. I do not know if the arrivals of 2019 are a feasible number, but even if 50% can be achieved, then the Cypriot tourism market will be able to fill the holes left by Russia and Ukraine. Last year, revenue from British tourists amounted to around €284 million compared with €967 million in 2019. Note that from 2010 to 2021 arrivals from the UK never fell below 870,000, with the lowest recorded in 2014 (871,523 arrivals) and the highest in 2019 (1,330,635 arrivals). So, in my view, the least we could expect for this year from the UK market is around 900,000 arrivals.
Israel and its prospects
Israel is a country from which arrivals have shown a significant rise in recent years. In 2021, due to the pandemic, arrivals from our neighbouring country were limited to 82,098, compared to 293,746 in 2019. Arrivals from Israel doubled in 2019 compared to 2016, which had risen to 148,739. The data show that there is a large margin of at least 210,000 more arrivals from Israel for this year than last year. Based on per capita spending, revenues from Israeli tourists amounted to around €139 million in 2019, compared with only €39.5 million in 2021.
Five questions for this year's tourist season and six highlights
The data from the markets mentioned above, show that it is possible to fill the gap left in tourism by the war in Ukraine.
(1) But should that be the goal? That is, to close the hole of about 900,000 tourists from Russia, Ukraine and Belarus and the €550 million revenue from tourists from Russia, Ukraine and Belarus? The answer is clearly no. 2022 should be a year that is not far from the results of 2019.
(2) But can this be done?
(3) How close can this year's arrivals in 2019 reach and from which countries?
(4) Where can more tourists be drawn from existing and new markets to fill the vacuum of Russian and Ukrainian tourists?
(5) How much can the Cypriot tourism industry support this objective, as it is currently structured and as it has been oriented in recent years?
I do not think that these are questions that can be answered immediately, especially before the middle to the end of May, when the summer bookings will begin to emerge.
On the other hand, additional factors are very important, such as:
● The number of flights and availability of air seats
● The current cost of air tickets
● The cost of the package that Cyprus can offer, given the increased costs due mainly to incoming inflation (but also domestic)
● The necessary staffing of hotel units and other similar connected units such as catering. For example, you cannot bring 500,000 German tourists to Cyprus if among the staff of the units that will house them, there are no members who speak the German language. The same is true, of course, with the French. And we must not forget that the tourism industry has been oriented in recent years, in addition to the traditional English market, mainly towards the Russian one.
● Competition from other destinations in the Mediterranean (we are not alone in the market and we do not play alone on the field).
● The cooperation between the public and private sectors, so that their objectives go hand in hand.
In conclusion, I would say that it would be a mistake to think that things will be easy. Making up for lost arrivals from Russia and Ukraine should not be turned into the main goal of this year's tourist season. The goal should be a year that is not far from the results of 2019. At the same time, however, it should be a tourist year that will expand the roads that lead to markets known in Cyprus and that present significant prospects. Always, however, based on the fact that through proper handling by all involved, that these will not be one-year openings but efforts with a medium and long-term horizon.
* Journalist
