Following concertedefforts to upgrade and diversify its tourism product, Cyprus is broadening its investment landscape by developing special interest areas such as medical tourism. Generating billions of euros annually, global medical tourism is the buzz industry of today with many countries promoting themselves as destinations in a bid to attract increased numbers of both visitors and investors.
Tourism is one of the biggest industries in the world and over the last 50 years has played a significant role in developing and shaping the economies of both Europe and Cyprus. Global tourist numbers are expected to rise to 1.5 billion by 2020 and competition over this market is fierce. Similarly medical tourism is seeing around 20% growth each year and destinations have had varying degrees of success establishing medical tourism sectors. In the case of Cyprus, although the country is still in the initial phases of developing this market, it is far from a pipe dream. With its well-established tourism infrastructure and offering of high quality healthcare at affordable prices, it is a realistic and attainable goal.
The economic potential and the revenue streams from medical tourism could be enormous for Cyprus – as well as for investors, who are seeing great potential in the country. Evidence of this is the recent announcement of one of the world’s leading hospitality and resort management companies, the Buena Vista Hospitality Group (BVHG), to base its regional headquarters in Cyprus serving the Eastern Mediterranean, the Middle East and the Balkans and to develop the largest wellness resort in Europe on the island.
Bringing together two strong sectors – tourism and health – will help Cyprus to diversify its product with economic benefits filtering into the wider economy. A medical tourist spends on average 5-10 times more than a traditional tourist and although cost is the driving force, quality is what a medical tourist is looking for. Cyprus may not be the cheapest destination in Europe, but it is known for its value-for-money offering.
Cyprus as a Tourist Destination
Cyprus has the advantage of already being an established and popular tourist destination, attracting 2.5 million visitors a year. With its friendly and safe environment, 340 days of sunshine, over 600km of coastline and some of the cleanest beaches in Europe, Cyprus has maintained its position as a top holiday spot.
Although the traditional ‘sun and sea’ package continues to be the main attraction, Cyprus is determined to become both a year-round and more multidimensional destination by promoting its nature, mountain regions and vineyards. Investment in luxury developments such as golf resorts and marinas and rapidly expanding niche tourism segments such as agro and conference tourism, have all broadened the country’s product.
Growing Revenue in Difficult Times
Cyprus has successfully proven its enduring international appeal and visitors continue to flock to its shores. Despite the financial crisis, revenue generated from holidaymakers in 2013 saw an 8% increase compared to the previous year. Cyprus’ key source markets are the UK, Russia, Germany and the Scandinavian countries, but with expanding air connections and new incentives for airlines and tour operators, the island is determined to capitalise on its strategic geographical location between Europe, the Middle East and Africa.
The success of the Cypriot tourism product and its ability to adapt to change and weather the current economic crisis testify there is substantial scope to tap into the medical tourism market. The fact that tourist numbers have been stable and have even seen an increase, while the country was facing the most economically challenging time of the past 40 years, is reassuring investors this sector is on anupward trajectory.
If Cyprus’ tourism services can be effectively packaged with its medical services, which can be up to 60% cheaper than in most countries, the island could become a serious contender in the global medical tourism market. The modern and high quality private healthcare sector, offering services at cost-effective prices, ensures Cyprus has the necessary expertise in place to develop a thriving industry. With seven public hospitals and more than 80 state-of-the-art private hospitals and clinics providing approximately 3,000 beds, 2,250 doctors and over 700 dentists, Cyprus is well positioned to cater to medical tourists. This coupled with the island’s temperate climatic conditions and the safe and friendly environment, could make Cyprus a worthy player in the market.
Investment Opportunities
From an investor point of view, Cyprus is an interesting location. Although the tourism and health sectors are already established, there are still untapped possibilities. For example, specific areas such as rehabilitation centres and elderly care services have not been developed to their full potential. As a favourite destination for retirees, particularly from the UK, and with the aging population of Cyprus, these types of services are seen as ideal investment opportunities.
Determined to become a top-class regional medical centre serving Europe, Russia, the Middle East and Asia, the island provides attractive opportunities for leading international medical institutions to access these markets, while remaining in an EU jurisdiction. An added benefit for setting up business operations in and through Cyprus is the country’s advantageous tax and regulatory framework and its extensive network of double tax agreements. Synergies and affiliations developed between Cypriot and international medical facilities would be a win-win proposition.
A key competitive advantage of Cyprus is the ease a medical tourist can combine treatments with vacation and leisure. A number of developers are already combining health services and medical aspects to resorts and real estate complexes, proving there are good investment prospects for large scale projects combining these two elements. Many hotels are also looking at possibilities of incorporating health centres or expanding cooperation with existing clinics and hospitals. Deeper collaboration between hotels and medical referral agencies as well as tour operators is increasingly becoming the means to develop an integrated package for medical tourism. The real advantage for innovators and investors with ideas and experience in this market is that Cyprus is in the process of refining its medical tourism product and the current lack of liquidity in Cyprus makes this an opportune time to invest.
Challenges and the Future
The current challenge for Cyprus is to work collectively with all the stakeholders to establish a competitive product and a strategy for the promotion of medical tourism. There is already serious interest from foreign investors, but to capitalise on this, the cooperation between all major stakeholders is vital to turn interest into real investment. Equally important is the political will to support the development of this industry through incentives, simplified and efficient procedures and increasing the accessibility of Cyprus via strategic air connections and medical visas. Countries that have already succeeded in branding themselves as reputable medical tourism destinations have shown that it is essential to establish medical tourism as a key economic sector with a robust support infrastructure in place.
Increasing accessibility in terms of direct flights to target markets and opening the skies to more routes and connections is also a vital factor in ensuring success. Pooling the expertise Cyprus already has, as well as recruiting more talent and establishing affiliations with international medical institutions and insurance providers, could generate innovative solutions and an exciting medical tourism product.
Accessibility, quality and affordability are the three pillars of success in attracting medical tourism and Cyprus is working hard to ensure these goals are achieved. Already enjoying an excellent standard of care and a thriving tourism industry, Cyprus is determined to reach its potential. With all its comparative advantages, the Mediterranean island has great prospects to flourish and evolve into a destination of choice.
Related Reading
- Investment Opportunities in Medical Tourism
- Key Competitive Advantages of Cyprus
- Roundtable: Medical Tourism
- Interview: Christos Petsides, Cyprus Health Services Promotion Board
