Filenews 7 January 2023
- Curated by Evagoras Prokopiou
- What will be the directions of the heavy industry of the island
Cyprus today ranks 31st out of 117 in the World Economic Forum's Travel and Tourism Development Index, 21st out of 43 in Europe and 6th out of 16 in the Mediterranean. The goal of the National Tourism Strategy (EST) 2030 is for Cyprus to be ranked in the top 30 markets worldwide and in the top 20 in Europe. For reference, Greece is currently in 28th place in the world. These are the goals set by the Deputy Minister of Tourism for the future of the sector.
REPORT 2020-2022
Taking stock of the three-year period 2020-2022, Deputy Minister Savvas Perdios said that the planning was implemented by 95%, despite the difficulties of the period, such as the pandemic and the war in Ukraine. An important achievement was the establishment of a new tourist identity for Cyprus, as "it is no longer the island of the sun and the sea", he noted, but is promoted as a destination with history, culture and authentic experiences, all year round. To this end, the new logo was created to promote the tourist product, while 12 quality marks were adopted that enrich its identity. Such are the signs "Christmas Village", "Wine Routes", "Colourful Villages of Cyprus", etc.
Regarding the target for markets by 2030, it is noted that the Russian market now occupies a much smaller percentage of the targets of the Deputy Ministry of Tourism. While in the targets set in 2020 the Russian market occupied the second largest share, after the United Kingdom, in the revised 2022 targets its share is no different from the rest of the markets, apart from the UK. Mr. Perdios reiterated that EU markets are now the goal for further development of the Cypriot tourism product, while, he noted, he expects a large increase in the coming period from the Polish market, as it is a large and resilient market, with tourists of all ages.
CYPRUS TOURISM IS RE-INTRODUCED
Furthermore, he noted that in terms of Cyprus' online reputation as a destination, which concerns general customer satisfaction, Cyprus today stands at 86%, slightly behind Turkey and Greece (with 88% and 87% respectively). The goal, Mr. Perdios noted, is for the percentage to rise to 90% by 2030. Tourism in Cyprus acquires a new orientation (repurposing), aligned with the vision of the National Tourism Strategy (EST) 2030, which is "the sustainable development of Cypriot tourism in a way beneficial to the economy, society and the environment", emphasizes the Deputy Ministry of Tourism, while emphasizing that "through the various actions of EST 2030, Cyprus is already in the process of implementing the vision of the World Tourism Organization (WCO)".
The ultimate goal of the National Tourism Strategy 2030 (EST2030) is to establish Cyprus as an all-year-old, quality, digitally smarter, more accessible tourist destination, which respects the environment and channels the benefits of tourism to all areas of the island, the Deputy Minister of Tourism, Savvas Perdios, told Insider in an effort to review the National Tourism Strategy 2030.
We invited three professionals in the sector to give us their views on the present and future of Cyprus Tourism.
MARIA KOUROUPI
SENIOR DIRECTOR OF AVIATION DEVELOPMENT, MARKETING AND COMMUNICATIONS OF HERMES AIRPORTS
A NEW PERSPECTIVE AFTER THE CRISES
In March 2020, the pandemic found Cypriot tourism at its best: A few weeks before, 2019 had ended having recorded a record number of arrivals with 4 million. tourists and record passenger traffic at Cypriot airports, data that gave auspicious prospects for the year that began.
However, events turned out very differently, with flights almost all over the world being grounded for several months. As Hermes Airports, from the very first moment we had set as our main goal the restart of tourism and the return to growth, as soon as the conditions of the pandemic would allow it. To this end, we have joined forces from the outset with all tourism stakeholders and the government. This cooperation and the actions taken in the almost three years that have passed since then, have borne fruit, if we consider that Cypriot tourism is now returning to the rails of growth and even more dynamically than ever. Despite the loss of 800 thousand Russians and Ukrainians, as a result of the Russian invasion of Ukraine, in 2022 more than nine million passengers travelled to and from Larnaca and Paphos airports, which corresponds to about 80% of the passenger traffic of 2019. At the same time, in 2022, Cyprus' connectivity was significantly enhanced, with even more new destinations being added to the airlines' schedules and existing ones being strengthened, some of them all year round.
Looking behind a safe distance of time, we can say that the two consecutive crises of recent years, the pandemic and the loss of the Russian market, despite the extremely large immediate consequences and the shock they caused to Cypriot tourism, gradually evolved into opportunities, as they gave the industry the necessary impetus to break free from the restrictions of the past, significantly expanding the palette of countries from which we welcome visitors. In 2022, our country penetrated the European markets as never before. Thanks to the plans of previous years and the intensive efforts of all actors, the noticeably enriched flight schedule to and from Cypriot airports and the targeted promotion campaigns of Cyprus abroad, last summer we attracted a large number of travellers from countries such as Poland, France, Italy, Germany, Austria, Switzerland and others. Our country now accounts for an ever-increasing share of visitors from the European market.
The long-term ability of Cypriot tourism and passenger traffic to recover despite the respective small and larger crises, has been decisively contributed by the implementation, over the last decade, of an attractive incentive plan by Hermes Airports in cooperation with the government to the airlines. With its recent renewal until 2027, we look forward first of all to supporting the aviation industry in the face of inflationary pressures and increased fuel prices that prevail today and to further development of tourism in the near future, which is also foreshadowed by the decision of the two largest European airlines to increase their fleet and schedule in Cyprus.
For the new year, we aim to further enhance the island's connectivity, strengthening existing flight schedules, emphasizing both new destinations and increasing flights to destinations with which there is insufficient air connection and maintaining them all year round, as well as attracting even more airlines.
Starting from the noticeable recovery and the momentum we achieved in 2022, we focus our attention on European markets, but also on the Near East and we are optimistic that in 2023 we can reach the passenger traffic levels of 2019.
It is certain that in the new year, too, the aviation and tourism sectors will face challenges. We remain optimistic and continue our efforts with goal-setting, flexibility and cooperation, maintaining the belief that even better days are coming for Cypriot tourism.
FILOKYPROS ROUSOUNIDIS
GENERAL MANAGER OF THE PANCYPRIAN HOTEL ASSOCIATION
TOURISM FACING MAJOR CHALLENGES IN '23
In the last two years, the pandemic has cast a heavy shadow over economies internationally, not excluding Cyprus. Unfortunately, the shock of the pandemic was followed by the impact of the war in Ukraine, which also affected our country, in various sectors of the economy and by extension in the sensitive sector of our tourism industry. The war triggered strong inflationary trends, rising prices and an unprecedented energy crisis, creating a particularly difficult environment for travellers. The unfillable gap caused by the loss of the markets of Russia and Ukraine remains a challenge that we have to face in the coming seasons.
However, the first goal we had set for this year, to make the year at least better than 2021, has been achieved, with the right actions of the Deputy Ministry of Tourism and the cooperation between the public and private sector, with the result that this year ended on a positive note since the influx of tourists to our island was of the order of 80% and the revenues of 88% of 2019. The new air connections launched from Europe and the Middle East contributed to this, resulting in an increased tourist flow from our existing markets of Germany, Poland, Israel, the Scandinavian countries, the Netherlands, Greece, Austria, Switzerland and Jordan, while new ones were added, such as France, Italy, Hungary, Serbia and Saudi Arabia, while the UK market remains the main source of tourism. Equally important is the recent cooperation of the Deputy Ministry of Tourism of Cyprus with Jordan, to attract distant markets, through common tourist packages, such as from the USA, Canada, Korea, Japan, China.
Looking ahead to 2023, the tourism sector faces a number of significant challenges, such as ongoing inflationary trends, increased interest rates, increased energy costs, with all similar increases that have a direct impact on hotel units' operating costs, such as increased energy costs and increased supply chain and raw material costs.
In this climate of uncertainty, the effort launched this year with traditional European markets should continue, avoiding over-reliance on specific markets and constantly expanding the circle of markets from which we draw tourists. An important tool for our strategy is the new Incentive Scheme for airlines aimed at further improving Cyprus' air connectivity.
Equally important remains the continuing shortage of labour in the sector, a problem faced by most sectors of the Cypriot economy and other European countries, which makes it even more difficult to deal with. To this end, those actions should be stepped up in time to alleviate the problem, with a fast-track procedure for granting permits for the admission of staff from third countries, while expanding the list of specialties for employment, and not only for specialized positions, which will allow hotel units to be staffed and meet the requirements and expectations of their customers, in order to continue as a tourist Cyprus to offer our high level of service.
Cyprus has always pinned its hopes on the tourism and hotel sector, a source of income that kept the country afloat in every difficult moment of its course as an independent state. Cypriot tourism has shown many times its resilience and dynamics in many crises and despite the difficulties that exist, we are optimistic that we will face any new challenges of the new year, with tourism once again acting as a barometer in the recovery of the economy.
CHRYSAIMILI PSILOGENI
GENERAL MANAGER OF THE ASSOCIATION OF CYPRUS TOURISM ENTERPRISES (STEK)
DURABILITY IN 2022, UNCERTAINTY IN 2023
The unprecedented changes that we have seen in recent years in essence prove two things. On the one hand, that Cypriot tourism is proving to be particularly resilient even in the biggest crises and on the other hand that the main issues that have been preoccupying the industry for decades, are either approached only briefly or out of necessity.
Today, for example, the correctness of the long-standing and timeless position of the STEK, as expressed since its establishment in 1997, that it is imperative to turn to quality tourism, is fully verified. Fortunately, albeit belatedly, we can see that this necessity is now more recognised than ever. Possibly because this is what the modern tourist now requires.
In 2001 tourist arrivals to Cyprus were 2.7 million. and revenues of almost €2.2 billion. In 2019, when arrivals reached 3.9 million, tourism revenues were only €2.6 billion. That is, arrivals increased by about 40% and revenues by only 22%. In 2022 the comparison of arrivals and revenues is better. By September we had 2.5 million tourist arrivals who spent €1.9 billion. with per capita spending being increased compared to 2021. However, it remains to be seen whether this trend will continue or whether it is temporary due to inflation.
2022 was difficult but in the end it turned out better than initially expected. The good course of tourism has also contributed decisively to the positive growth rates of the economy, which are estimated for the whole year at 6% of GDP. For 2023, uncertainty once again prevails. Uncertainty created by various factors such as rising inflation and weakening purchasing power of households in traditional and emerging markets such as England, Germany and France. Uncertainty also remains about the outcome of the Russian invasion of Ukraine. In any case, we should treat the Russian market as new and approach it again from the outset when and when the war is over, travel restrictions are lifted and we return to the previous situation. There is also uncertainty about the prices of food and raw materials used in the hotel industry as well as energy prices. For 2022 we received the credit from tour operators that we were one of the few destinations that did not increase the charges, but if the rise in prices continues then the viability of the sector's businesses will be put in doubt. That is why we have urged that Virtual Net Metering be extended to hotels in terms of at least 80% of their energy consumption without caps and restrictions.
The prevailing climate of uncertainty requires constant monitoring of developments and bold decisions to be taken when and when necessary. One such decision could involve the creation of an incentive plan focused on upgrading services rather than increasing beds and perhaps studying a cap on the creation of new beds, especially in low-star units.
Important arrangements should also be made for properties offered for short-term lease. As hoteliers we do not oppose their operation and recognize that this is a trend that is here to stay. However, we call for equal tax treatment and an operating framework that ensures social cohesion in the country.
Another issue, which will also be acute in 2023, concerns the lack of staff. Hoteliers are necessarily turning to the solution of workers from third countries. This solution takes away from Cypriot hospitality and has a higher cost for a business, however, under today's circumstances it is necessary. At the same time, however, much can be done in the context of a long-term policy aimed at young people.
It is clear that Cyprus can become a more qualitative destination if the comparative advantages of our country are targeted and methodically exploited. For FTC, quality tourism does not mean only high-income tourists, but primarily tourists with education, in its broadest sense. The one that will allow the visitor to respect the culture, to get to know the culture, to appreciate and enjoy our island without burdening the natural and social environment and at the same time to be another ambassador of the country abroad.
