The Cypriot economy has been on an upward trajectory for the past six years, since the economic crisis in 2013. GDP has increased to more than 19 billion euros in 2017, and investment has surged while the unemployment rate has plummeted. Leading drivers of this expansion are the hotel and tourism industries.
“In 2017, we reached a record year, both in terms of tourist arrivals, as well as revenues from tourism,” said Haris Loizides, President of the Cyprus Hotel Association (CHA), the trade union and effective lobbying group for almost all hotels and other licensed tourist accommodation units in the country.
Indeed, even off-peak visits have increased 104 percent since 2013. There are a number of factors driving this growth. First and foremost, over the past five years, “an investment of approximately 600 million euros was spent within the hotels in renovation expenses, in product improvements, and in introducing new technologies,” Loizides explained. “Today, I’m very proud to say that the hotel product is the flagship of the tourism growth.”
At the same time, during this five-year period, the hotels drastically reduced their percentage of non-performing loans; from 67 percent in 2015, to about 22 percent today — allowing them to invest even more in their own modernisation.
A third factor goes beyond the hotel industry to a broader governmental effort to promote tourism. “With President Anastasiades and his government, we have been enjoying very productive relations during the past six years,” commented Loizides, adding that the President has made it clear he wants to work even closer with hoteliers — and that nowadays, CHA acts as a sort of government consultant on tourism-related issues.
In a show of heightened support for a more robust national tourism strategy, the government announced the creation of a Deputy Ministry of Tourism in early 2018, and closed the year with a bang, after appointing Savvas Perdios as the new Deputy Minister. Part of that strategy, spearheaded by CHA, has been to move beyond the sun and sea branding of Cyprus, as a summer destination, to a year-round locality, that offers many wonderful experiences beyond the beach.
“There is a lot of discussion on sports tourism,” noted Loizides. “There is a lot of discussion on the archaeological sites — how some of these archaeological sites need to be revamped and renovated, in order to accommodate more people.”
With this diversification strategy, and the hotels adding new infrastructure — like themed restaurants, conference facilities, and additional activities in the hotels — “the hotels can create the basic infrastructure for winter tourism to operate in Cyprus,” Loizides said. And already, the percentage increase in tourism during the off-season is much larger than the increase during the high season.
Part of this increase comes from the new City of Dreams in Limassol — an integrated casino-resort with a shopping mall, conference centre, entertainment centre, and, of course, a hotel that can fill 500 beds — which all attract higher-end tourists.
In this sense, CHA is much more than a Cypriot hotel union — it is a staple of the Cypriot economy. In operation for 82 years — before even the Republic of Cyprus was founded — CHA and its members are a vital driver of foreign investment in the country – major employers – and have a key multiplier effect on other areas of the economy.
“We conducted a study which indicated that of the total revenue of one hotel, what stays within the hotel is about 10-15 percent,” explained Loizides. “Everything else is going out to suppliers, to employees, to the banks, to the authorities, to the electricity, to everything else. So, the multiplier effect of this industry is tremendous.”
And within the sector itself, the hotels are having a kind of ‘multiplier effect’ on their employees. Salaries increased approximately 20 percent this year compared to last year, and, with the industry becoming a 12-month employment possibility, the hotels are starting to hire more and more people.
Still, more work needs to be done to show everyone just how huge hotels and tourism are becoming in Cyprus — and how great it could be to work in the industry.
“The Cypriots started coming back to the industry [after the economic crisis], but we realised that they wouldn’t last because they needed a safer career-oriented position, and not just seasonal employment. So, we have decided that through these efforts to extend the season, we need to run a campaign with young ones to show that … they should come back to the industry,” Loizides commented.
With the record growth in hotels, and the government’s focus on supporting the tourism sector writ large — along with CHA’s substantive efforts to revamp the industry — it looks like the campaign to attract younger employees should be an easy sell.
