Cyprus Tourism

Tourism in Cyprus occupies a dominant position in the country's economy,[1][2] and has significantly impacted its culture and multicultural development throughout the years.[3][4] In 2006, the tourism industry made up 10.7% of the country's GDP and the total employment in the tourism industry was estimated at 113,000 jobs.[5] With a usual minimum of around 4million tourist arrivals per year,[6] it is the 40th most popular destination in the world[7][8] and the 6th most popular per capita of local population.[9] Cyprus has been a full member of the World Tourism Organization since 1975.[10]

According to the World Economic Forum's 2013 Travel and Tourism Competitiveness Report, Cyprus' tourism industry ranks 29th in the world in terms of overall competitiveness. In terms of Tourism Infrastructure, in relation to the tourism industry Cyprus ranks 1st in the world.[17] With some of the most popular[18] and cleanest beaches in Europe,[19] much of the tourist industry relies on "sea sun and sand" to attract tourists.[20] This reflects in the seasonal distribution of tourist arrivals with a disproportionate number arriving during the summer months.[21] Whereas most eastern resorts like Protaras and Ayia Napa attracts the most of the island tourists during March to November, the west of the island remains open to tourism with the promotion of Cypriot history culture and specialized sports such as golf and climbing has a wider distribution.[citation needed]

Cyprus Tourism

Download 🔥 https://urlca.com/2y4Qe0 🔥

In addition to acquiring existing tourism infrastructure, investors should consider prospects in constructing large, Greenfield tourism projects in the following sub-sectors: seafront tourist developments, theme parks, retirement and rehabilitation centers, athletic tourism projects, medical and wellness tourism, agrotourism, cultural and religious tourism, wedding destination tourism, convention events, and golf courses combined with residential developments. Non-EU entities interested in constructing large Greenfield development projects in Cyprus must be properly licensed in their country of origin.

During the presentation of the 2024 budget to the Finance Committee of the House of Representatives, Deputy Minister of Tourism Kostas Koumis stated that 50% of the available appropriations are for actions to promote the destination and enrich the tourism product, such as information campaigns, participation in exhibitions, and grant projects. The remainder will be used to support sectors with fixed costs such as salaries, operating costs, and social benefits. He also mentioned that the ministry is currently re-evaluating promotional activities and actions aimed at enriching the tourism product.

The global pandemic shock has caused an unprecedented shock to the tourism industry, severely impacting tourism-dependent economies such as Cyprus. This chapter seeks to examine the recent developments in the tourism sector in Cyprus. It further examines the outlook for recovery prospects and outlines some policy priorities given the economic vulnerability to the tourism shock and the need to minimize scarring and protect the vulnerable workers.

2. Tourism in Cyprus has been hard hit by the Covid-19 shock, among the most severe in Europe. Tourist arrivals experienced an unprecedented collapse since the pandemic. In 2020, tourist arrivals decreased by 84 percent, while tourism revenue decreased by 85 percent, compared to 2019. Travel restrictions led to a significant decrease in tourist demand from the major markets such as the United Kingdom (UK) and Russia. While travel restrictions were lifted in early June for arrivals from a limited number of countries, Cyprus still experienced the most severe decline of tourist arrivals for the year when compared with other European countries.

3. Employment has been largely protected in the tourism sector, but hours worked declined much more severely than during the previous crises. While tourism employment has declined more than in the rest of the economy, with the temporary employment support measures, this decline has been contained so far. The number of workers in Trade, Travel & Food Services decreased by 13 percent in 2020:Q2 and 9 percent in 2020:H2 compared with the previous year. This trend also held for self-employed workers. Nonetheless, hours of work in Trade, Travel & Food Services decreased more significantly in the second, third and fourth quarters of 2020 by 20 percent, 15 percent, and 18 percent, respectively, compared to the previous year.

4. The pandemic shock has had a significant impact on exports of services and on GDP growth. The adverse impact on the economy was large since tourism is a key sector for Cyprus. Services exports decreased by around 27 percent in the second and third quarters of 2020 compared to the same periods of 2019, mainly reflecting the fall in demand for tourism. The overall economy also showed a deep recession in 2020, with real GDP declining by around 8 percent in the second and third quarters of 2020.

6. High exposure of the Cypriot banking system to the tourism sector also increases the risk of a macro-financial feedback loop. Loans to accommodation and food services was 46 percent of tier 1 capital, one of the highest in the euro area (IMFa, 2020) 2. The sectors of trade, hotel, restaurant, and transportation accounted for the largest shares of total loans and non- performing loans in Cyprus. These sectors were hit harder by the pandemic with more negative growth rates of gross value added than other sectors. However, the moratorium on loan repayments have helped alleviate the negative impact of the pandemic on the financial sector. The take-up rate of the loan repayment moratorium, at over 90 percent, was particularly high for non-financial corporations involved in tourism related activities, including accommodation and food, arts, entertainment and recreation, and construction. But with the expiry of the moratorium, there are risks of loan distress as the repayments become due. A heatmap table capturing these economic and financial sector exposures placed Cyprus among the highest quintile of countries vulnerable to the tourism sector in the EU 3.

8. High reliance on hotel accommodation makes Cyprus more vulnerable to the Covid-19 shock, while concentration of stays away from cities presents a more favorable outlook. Given the fall in attractiveness of hotels with the pandemic shock, there is potential for non-hotel accommodations to attract tourists, which benefits countries that can provide a greater variety of accommodations. However, in the case of Cyprus, almost all tourists stay in hotels and similar accommodations. On the other hand, the location of overnight stays in Cyprus is more diverse, with more stays in towns and suburbs and rural areas and relatively low ratio of stays in cities. The relatively large size of non-urban tourism is helpful for Cyprus to cope with the pandemic, as rural tourism is likely to increase and could partly offset the decline in urban tourism.

11. Based on a Heatmap Analysis of the overall tourism characteristics and sanitary situation, Cyprus is placed in the fourth and third quintile of EU countries in terms of the risks to the prospect of tourism recovery. As shown in the text table, Cyprus has a score of 3.4 using the tourism indicators 4, mainly reflecting the large dependence on foreign tourism and air travel. Cyprus fares relatively well in terms of sanitary/health indicators, placing it in the middle quintile with a score of 2.8. This reflects the lower number of cases and high testing rates which is partly offset by the high stringency score on mobility restrictions that deter the attractiveness for travel.

12. Looking ahead, Cyprus fares relatively well in terms of prospects for recovery given the tourism characteristics, sanitary indicators, and recovery in the main source countries. Using the quantile distribution of countries (combining indicators in the heatmaps), with 1 indicating the least vulnerable and 5 being the most vulnerable, we estimate the speed of recovery for countries assuming each broad category has the same weight. Based on the results, Cyprus should have a relatively faster recovery rate.

15. The recovery of tourism will be determined by the pace of the vaccination rollout, the coordination among countries on travel procedures and the economic situation. New infection waves and protracted containment measures could further delay the recovery of tourism sector. On the other hand, vaccine developments help to shift the balance of risks and elevate the upside potential. For Cyprus, based on the current pace of vaccine rollout in the country as well as the main source countries, staff has projected that a recovery of 30 percent, on average, of the 2019 level is expected in 2021 with full recovery taking place by 2024.

18. Policy design measures should also take into account that tourism sector workforce is among the most vulnerable. Workers in the hotel industry tend to fall disproportionately in the lowest income quintile compared with other industry groups. Given low teleworkability of this industry, these workers are more susceptible to unemployment and income loss. Policies should thus ensure continued income replacement or wage subsidies to maintain employment ties. Workers in this sector appear to be more gender balanced, although women are represented more than in other sectors. At the same time, this sector has a higher reliance on foreign workers in Cyprus. Support measures should appropriately target these populations in terms of safety net support and to facilitate easier transition back into the workforce as the recovery takes hold.

19. The longer-term policy challenge is to steer the sector from mass tourism to sustainable tourism, given the impact of the pandemic and environmental concerns. Mass tourism tries to maximize revenues through demand anticipation and capacity management, notably in airlines, hotels, and rental cars. Risks of future pandemics, overcrowding, and environmental policies may have long-term impacts on international travel and make mass-tourism business model less viable. Sustainable tourism could be a potential alternative which focuses on smaller-scale, regionally more diverse, and higher-end tourism; more strongly based on environmental sustainability, quality of services, and non-price competitiveness. Based on the Travel and Tourism Competitiveness Index by World Economic Forum (WEF), Cyprus has similar competitiveness scores as the average of Euro Area countries. Cyprus also ranks among the most improved (from 55 th to 42 nd ); nevertheless, further improvements will need to focus on environmental sustainability and diversification to different types of markets such as cultural resources. Cyprus has made progress in diversifying the source markets of tourism, although the share of its top three markets (UK, Russia, Israel) remains very high, making it vulnerable to developments in these countries. More diversification of tourist market would help Cyprus to cope with shocks. e24fc04721