A new tourism strategy aims to double visitor arrivals, triple tourist revenue and attract €20bn in new investment to Cyprus by 2030.
Cyprus tourism is experiencing nothing short of a revolution. Ambitious luxury marina and hotel developments are springing up in all coastal towns, plans to build the island’s first and only integrated casino resort – by global heavyweights Melco and Hard Rock – are in the pipeline, and foreign direct investment into the sector is at an all-time high. Tourism has proved to be the most resilient of Cyprus’ commercial sectors, generating 12% of the country’s GDP in 2016 – a year which defied expectations and was record-breaking in visitor numbers, which reached 3.18 million. This marks a significant increase to the island’s previous record of 2,696,700 in 2001. The sector is undergoing the most comprehensive restructuring since 1960, and new markets are being opened up. Also, the longstanding problem of seasonality is being energetically tackled through the introduction of various niche areas, such as rural, health and wellbeing, nautical, religious, conference, sports and wedding tourism.
A Vision for the Future
Cyprus has embarked on an ambitious new strategy with the aim to further boost both visitor arrivals and tourism revenue, and create 47,000 better-paying jobs by 2030. In the same time frame, the country has set its sights on attracting €20 billion in new investment, and doubling the share of tourism in Cyprus’ economy. As part of this process, the government recently commissioned a comprehensive study by Spanish company THR Innovative Advisors, to assess the future of tourism on the island. The findings determined that the sector has the potential to contribute up to 30% of GDP by 2030, if the sector is developed responsibly and strategically. To reach these demanding targets, Cyprus would need to attract at least 4.8 million foreign tourists, of which 40% would be during the traditionally dormant winter months between November and April to ensure the sector’s future competitiveness. Developing the island into an established year-round destination is an arduous task, but considering the growth the sector has already witnessed in the last two years – despite a recent financial crisis – there is strong reason to believe it can achieve its goals.
Cyprus’ new strategy envisages redefining the island as a premium holiday destination, capable of attracting tourists with greater spending powers, who have an average per capita expenditure of between €250-500 a day, as opposed to the tourist of today, who spends on average €78 a day. To attract the high-spending visitor, it is crucial for Cyprus to undergo a comprehensive upgrading and refinement of the existing tourism product – a move that would aid in attracting the €20 billion in private investment over the next 14 years. It is expected that this type of investment would be matched by a corresponding increase of around 15% in state funding of the industry, which would be used to provide a richer holiday experience, and one that emphasises culture, indigenous heritage and natural environmental features – all underpinned by a high-quality hospitality industry. While Cyprus is certainly not turning its back on the traditional ‘sun and sea’ model, it is definitely moving to reposition itself in the holiday market to provide a more enriched, diversified and ultimately more sustainable product.
Best Beaches in Europe
The island may be moving towards a more sophisticated offering, but a key aspect of its winning package remains its ideal weather of 340 days of sunshine and its pristine beaches – one of its core natural attractions. Cyprus’ coastline has been recognised internationally, with its beaches ranked as some of the best in Europe. The EU’s annual bathing water report recently listed Cyprus as having the greatest number of ‘excellent’ beaches for swimming amongst all the 28 member states. According to the report, around 99.1% of bathing water sites in Cyprus in 2015 had ‘excellent water quality’. The report was published as another famous Cyprus beach, Fig Tree Bay in Protaras, was awarded a coveted Blue Flag – an award which brings the number of Blue Flag beaches on the island up to 59.
Cyprus by Yacht
Nautical tourism is expanding in leaps and bounds, with every coastal town on the island already boasting or now developing its own marina – a strategic part of bolstering year-round tourism. Following the success of Limassol Marina, a new luxury marina project has broken ground in Ayia Napa, and plans for marinas both in Paphos and Larnaca are also underway.
The Ayia Napa development – backed by Egyptian business magnate Naguib Sawiris – will feature two bespoke residential high-rises, beach front villas and world-class yacht facilities for up to 600 vessels. The €220 million project will bring a taste of Dubai’s skyline to the eastern shores of Cyprus, and is certain to boost both tourism and property sales. The development of Larnaca’s marina is still in a nascent stage, with foreign investment being sought, but there will be a ready market for the facility once completed. For the past seven years, Larnaca has hosted the annual Cyprus-Israel regatta, where yachts compete in a series of races off the Cyprus coast, culminating in an exhilarating race from Larnaca to Tel Aviv, about 25 sailing hours away. The number of Israeli boats mooring at Larnaca has increased in recent years, and the town is keen to further develop its potential as a key holiday destination for Israelis. Larnaca – a former capital city – is undergoing an extensive transformation. International hotel group Rezidor, which is already developing a hotel in the centre of the city, is planning to launch the island’s first Radisson Blu airport hotel and conference centre in 2019. It will be primarily a business hotel, complementing the island’s traditional leisure segment.
Although tourists are spoilt for choice in terms of accommodation ranging from budget priced two and three-star hotels to a growing range of upmarket hotels with four and five-star status, a key growth segment is also rural tourism – which has flourished in Cyprus and offers a range of great options from boutique country retreats to rustic village houses, giving travellers a unique way to experience authentic island life
Cruising the Med
Maritime tourism is expected to receive a further boost from the new architecturally innovative passenger terminal in Limassol. It brings to an end decades of chaotic quayside scenes, where passengers were obliged to disembark and board amongst freight crates and other cargo. Perhaps more importantly, the new facility will significantly enhance Limassol’s credibility as a potential destination for cruise ships in the Mediterranean. The volume of cruises in the Eastern Med has been declining sharply in recent years, and the region now attracts less than 15% of all Mediterranean cruises. It is hoped that a new collaborative venture with Egypt to develop a regional forum will encourage the more effective promotion of the Eastern Med as an attractive cruise line destination.
Betting on Success
Legislation has now been passed enabling the operation of a single luxury casino resort on the island – along with four ‘satellites’. Three of these will feature only gaming machines, while the fourth will also boast gaming tables. The over €600 million bid for this unique integrated project – boasting to become the first of its kind in Europe – was won by global casino industry heavyweights Hong Kong-based Melco and US Hard Rock, and is set to bring millions of euros of revenue to the country. Expected to be operational by 2018, the opulent resort will include 500 hotel rooms, 100 gaming tables and at least 1,000 gaming machines – in addition to conference, leisure and event facilities.
Tying the Knot
Wedding tourism has continued to expand in Cyprus, with 2016 bringing in €120 million. Around 50% of wedding tourists come from the UK, but increasing numbers of couples from Lebanon, Israel and Russia are choosing to tie the knot on the famous island of Aphrodite, the goddess of love. Much of the growing appeal of this form of tourism is due to the availability of civil marriages in Cyprus. Across much of the Arab world – and Israel – a marriage ceremony has to be conducted within the context of a religious ceremony if it is to be legally recognised. This makes Cyprus an attractive wedding destination for mixed-faith and secular couples, and also for Israel and its 350,000 Jews from the former Soviet Union, who are not recognised as Jewish by the country’s Orthodox Chief Rabbinate.
The island also has a reputation as a popular winter practice venue for international sports groups and athletes, a field with considerable growth potential. Diving tourism is another area where growth is confidently predicted. An estimated 50,000 divers visit the island each year, many attracted by the opportunity to explore one of the top five dive sites in the world, the Swedish cargo vessel Zenobia, which sank off the coast of Larnaca in 1980. The CTO acquired four ships in 2015 in order to create more artificial diving reefs for tourists. Golf tourism is also expanding rapidly, and Cyprus boasts four 18-hole international standard courses, with plans to construct an additional seven to establish the island as a year-round destination for golfers.
Medical and Wellness Tourism
Medical tourism is experiencing unprecedented growth, due to Cyprus’ world-class reputation for high-quality private health care in a technologically advanced environment. Cosmetic surgery, diagnostic tests and fertility treatment top the list as the most popular procedures for medical tourists from the UK, Germany, the Netherlands, Middle East and Russia. Health and wellbeing holidays are also on the rise, with the recent creation of several exclusive spa hotels to pamper the visitor, as well as a number of large-scale projects open for investment in the fields of rehabilitation and other wellness services.
European Capital of Culture
Out of all the island’s seaside towns, Paphos in particular is enjoying a tourism boost with hotels enjoying occupancy rates of 63.7% between January and September 2016 – a 3% increase on the previous year. Along with the Danish city of Aarhus, it has been designated Europe’s capital of culture for 2017 and will provide a showcase for the very best of European culture, linking tradition with modernity, and providing a bridge between east and west. The coastal town has been heavily promoted in Poland, Ukraine, the Baltic States, Finland and Israel – with the number of Polish and Ukrainian visitors increasing by 49% and 23% respectively over the past twelve months. Most of these markets also already enjoy direct flights to Paphos, and have the potential to provide more low-season winter tourists, keen to experience the diversity the popular coastal region has to offer.
Growth from Diversification
Cyprus is actively targeting new markets and reassessing existing ones, but what has been evident is that tourist numbers are on the rise. Arrivals from the United Kingdom, traditionally the island’s biggest tourist market, reached 1.15 million in 2016, an increase of 11.2% on the previous year. Meanwhile, the second largest market, Russia, generated 781,634 arrivals, an increase of 49%.
While these figures are encouraging in themselves they serve to highlight the sector’s dependence on these two specific markets. Although the island certainly cannot afford to ignore these crucial markets that supply much-needed low-season tourists seeking winter sun, Cyprus has begun to accelerate the process of diversification into other non-traditional markets. Germans made up only 3% of arrivals on the island in 2016, but are strategically important because of their potential contribution to winter tourism. Hopes for continued visitor growth have been raised further by the decision of German charter airline Germania to begin new services between Paphos and Hamburg, Nuremberg, Munich, Berlin, Stuttgart, Dresden and Dusseldorf.
As part of Cyprus’ new strategy, tourist officials are increasingly thinking outside the box in a bid to target non-traditional markets. To this end, and in order to facilitate the visa process for Chinese visitors, the government has also established five authorised centres for visa applications in China and plan to create another 10 in the future.
Tourism is often described by those in the business as the engine that drives the Cyprus economy. If that is the case, then there are certainly some big changes going on in the engine room. They may be unnoticed by the average visitor, but they are profound and far-reaching, and if successfully implemented, will keep the sector on a growth course for the next decades.
Updated: March 2017