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Cyprus… The imperative call for a change

In Cyprys, tourism is for ages the backbone of the country’s economy. Today the effort to upgrade services and diversify the tourist product is a high priority commitment for the government.This island, despite its rich culture, is threatened by neighbouring countries that offer a similar product at a lower price.The most recent results for tourism revenue show that the time has come to change the island’s orientation

As the third largest island in the Mediterranean lying at the crossroads of three continents (Africa, Asia and Europe), Cyprus is blessed with long sandy beaches and small unspoilt coves. Following the summer of 1974 invasion by Turkey, the island’s economic activity came to a standstill as 60% of the country’s most developed infrastructures and tourist facilities were lost. Over time Cyprus emerged even stronger to become one of the most important tourist destinations in the Mediterranean.Since the launch of the Plan, Cyprus tourism is about to overcome several of its problems. Already the first half of 2005 has recorded a slight increase in revenue over the same period last year, and the country’s officials, together with the tourism professionals, are hoping that this trend will continue.With just over 750,000 inhabitants, the island of Cyprus has been welcoming more than 2 million tourists yearly. The tourism sector directly employs more than 50,000 people. While sun and sea clientele has always been in the top priority marketing agenda in the past, government officials are starting to view tourism in Cyprus from a different angle. While the numbers of tourism arrivals have been increasing, the income from this industry showed a down trend for the third consecutive year in 2004. The Ministry of Tourism and the CTO (Cyprus Tourism Organisation) have set goals in order to change this downtrend by maximising the income from tourism. Already in progress, the 7-year Strategic Plan for Tourism Development 2003-2010 seeks to help reposition Cyprus from being a one-dimensional destination to being a country that offers a multifaceted tourist experience.Since the first year, the Plan was put into effect, the country has managed to reverse the two preceding years’ decline in arrivals i.e. 2003 and 2002. In 2004, Cyprus recorded over 2.3 million tourists arrivals, close to a 50,000 increase (+2%) over 2003. This is promising. In 2003 tourist arrivals were 4.8% lower than in 2002, which recorded a decrease by 10.3% compared to 2001.Similarly, 2005 shows positive results with 282,652 tourists by June compared to 264,799 tourist arrivals during the same period of 2004 (+6.7%). Major tour-operators like TUI, Kuoni, Thomson and Olympic Holidays are among the many tourism professionals offering packages. More than 33 airlines serve the two airports - Larnaka and Paphos - by connecting Cyprus with 120 cities worldwide. During the high season, the number of flights to and from Cyprus sometimes exceeds 500 weekly.More than half of the 2.3 million tourist arrivals in 2004 were from Great Britain. The two other significant source markets are Scandinavia and Germany but put together they barely add up to 400,000 yearly or 17% of total arrivals in 2004. Tourists travelling from Russia totalled up to 83,800 in 2004, representing a 3.6% share of the country’s total arrivals, with a traditional attraction for Limassol. Among them, 36.6% preferred to stay in hotels in Limassol during their stays. Not long ago, in 2000, the Russian market represented over 5% of all tourist arrivals in the country with Limassol welcoming around 60% of these arrivals. Since May 2004, when Cyprus successfully joined the EU, obtaining a tourist visa seems to have become very time consuming and, as a result, they look to neighbouring non-European countries, like Turkey. Karolos Lambertides, Sales and Marketing manager of Stademos Hotels in Cyprus, shares the views of most of the local hoteliers: “If the government can overcome the timeconsuming bureaucracy, the Russian market will choose Cyprus over other neighbouring countries.”A member of the Louis Group, Louis Hotels operates various hotels catering to a broad spectrum of demands. Popi Tanta Demetriou, General Manager of Sales & Marketing, is optimistic about the repeat clientele, particularly as Louis enjoys a high degree of loyalty from the United Kingdom. Popi Tanta states: “We believe that with the liberalisation of flights and the increase in services from and to Greece, traffic should soon increase remarkably.”Cyprus tourism is on alert. For the third year in a row 2004 showed a declining figure in tourism revenues. In fact, it was at 1.7 billion, or down 3.2% compared to 2003, 13.6% less than 2002 and 24.6% less when compared to revenue in 2001. The revenue from tourism until June 2005 has reached 645.5 million compared to 641.5 million for the same period in 2004 (+0.6%). With the Strategic Plan, the government is aiming to reach 3.1 billion and 3.5 million tourist arrivals by the year 2010. This is an ambitious objective since tourist clientele in Cyprus is looking at prices more and more. As per Michael Metaxas, General Manager of the Anassa hotel in Latsi: “There is a decrease in the amount of money spent by the tourists especially on F&B. Now we are concentrating on attracting incentive and business groups from top accounts around the world”. Indeed, even though the average length of stay and the amount spent by tourists on accommodations is almost the same and in some cases better, it seems that the clientele mix of Cyprus is becoming very wary of prices.The promotion and expansion of quality tourism by Cyprus’ government has resulted in a long list of existing upscale hotels. Cur-rently there are 21 5-star and 58 4-star hotels operating on the island, most of them along the coastline.The number of beds available at the end of 2004 was around 120,000 and the Strategic Plan calls for a very modest increase in the hotel bed supply by the year 2010. According to the plan, any new development will be limited to 3-5-star hotel categories, especially boutique hotels.As tourists are becoming more aware of various destinations they also have access to cheaper and more frequent transportation. Unavoidably, Cyprus is threatened by neighbouring such as Greece, Turkey, Egypt, Malta - which are all able to offer a high quality product at affordable prices. One of the weaknesses of Cyprus is the high hotel operating costs and hoteliers are beginning to understand that they can only fight back the competition by selling more value for money. In fact many hotel operators invest in refurbishment to maintain the competitive levels of their product. The Four Seasons Hotel in Limassol set a good example by closing six months for renovation. Questioned on the actions taken by the CTO, Pambos Charalambus, the hotel manager, replied: “Any effort that aims at increasing the quantity and quality of tourism is well accepted, but as hoteliers, we want to be proactive ourselves aiming to sell more value for money.”Cypriot tourism is also facing seasonality. Although the island offers great weather conditions at least nine months per year, the very high season (July to September) is the only period when hoteliers are really satisfied with tourist arrivals and revenue alike. The six months from May to October represent 73% of the 2004 tourist arrivals. The same trend exists for local tourism as most of the Cypriots choose to take their holiday during that period. The expansion plan aims to overcome the problem by enriching the tourist product. A series of projects are planned for sports, golf courses, marinas, and conferences & incentives facilities, in order to improve the tourism infrastructure by 2010.MICE tourism has great potential as the geographical location of the island, strategically located at the crossroads of three continents, encourages many multinational companies to hold their regiona meetings in Cyprus. Although the Cyprus International Conference Centre is located in Nicosia, its capital, most of the conferences held on the island are hosted in Limassol. As a seaside resort, the second largest city combines business with pleasure, but is also conveniently located a short distance from both of the island’s international airports. Several hoteliers believe that the city is in great need of its own conference centre to hold groups with over 2,000 delegates, as in the past large conferences had to be turned down. The largest hotel-based conference facilities can be found in the Hawaii Hotel able to accommodate up to 1,200 delegates. “Our hotel has won the title of Europe’s Leading Conference Hotel for 2004 from the World Travel Awards,” Tsangaras Demetris, the General Manager, proudly states. Demetris Yiannakis, Sales and Marketing manager for Tsokkos Hotels, one of the five biggest hotel groups in Cyprus, considers conference & incentive tourism a very important product for the group.The revolution in seasonality and broadening the clientele mix calls for improvements in sports tourism as well. This niche is near the top of in the Plan’s agenda together with the development of infrastructure projects and the organisation of international athletic events. The country’s sports facilities will further improve according to a 3-year Strategic Plan 2005-2007 and there are plans to have additional golf courses on government land. There seems to be a lively interest from golfers all over the world and all the professionals in the area recognise the benefits of these creations. Paphos, the mythical birthplace of Aphrodite, the goddess of beauty, is a popular holiday resort with high standards for its infrastructure and hotels. It is the home of the unspoilt Akamas Peninsula and of the Aphrodite Hills Golf Course, part of the Aphrodite Hills Resort. These greens are comparable to the best courses on continental Europe.It is also where the Inter- Continental Cyprus Hotel is located. Jorgen Jorgensen, its General Manager, is a strong supporter of Special Interest Tourism. Although British, Scandinavians and Germans are the backbone for the Inter- Continental, the hotel values smaller groups as well, such as the French: “Unlike other sun and sea clientele, the French will take time to appreciate the rich historical monuments and archaeological treasures that this lovely island has to offer.” Besides the cultural attractions, the natural beauty of the island can only be found in the countryside. More tourists are beginning to realise that the traditional villages located in rural Cyprus are very impressive.To achieve both its short- and long-term goals, it is imperative that the Cyprus Tourism Organisation, together with all the key officials who either directly or indirectly work for the Tourism sector, adopt a new approval with regard to smaller markets. Among these markets are the Cypriots, which are known for their big spending habits. Demetris Tsingis, Sales & Marketing Manager of Aqua Sol hotel group, expects the Cypriots to hold a 5% share in clientele this year compared to a lower 2-3% from previous years. “The Cypriots are slowly beginning to choose to stay in Cyprus over other destinations, particularly since lately they have been able to enjoy lower prices.”

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