Nicosia: President of the Association of Cyprus Tourist Enterprises (ACTE), Akis Vavlitis, expressed cautious optimism that conditions in Cyprus's tourism sector will improve following the decisions by the US and the UK to reinstate Cyprus to the lowest travel advisory level (Level 1). He noted that the impact of this development will become clear in the next two to three weeks.
According to Cyprus News Agency, Vavlitis mentioned that this development has pleased the tourism industry. He added that it will become apparent in two to three weeks to what extent this change in travel guidelines has affected the industry positively. Vavlitis highlighted that the United Kingdom is Cyprus's largest market, and this development acts as a psychological factor for European and Middle East countries.
Vavlitis emphasized that there is cautious optimism regarding improvements due to the decisions by the US and the UK. However, he stated that the full impact would be observed in the coming weeks. An increase in booking numbers would indicate that the updated travel advisories are positively influencing the market.
Regarding the UK, Vavlitis acknowledged the longstanding reliance on this market and stressed the need for diversification. He noted the differences between the UK and Cyprus's second-largest market, Israel. He reflected on the past reliance on the Russian market before the Ukraine conflict and remarked on the increasing frequency and severity of crises impacting the tourism sector.
In a presentation to authorities and the President of the Republic, Vavlitis cited a study by a major international firm, identifying India as the next major tourism market. He noted the challenges in catering to Indian tourists and emphasized the necessity of diversifying market reliance.
Vavlitis reported positive developments in tourist arrivals at the start of the year, with increased bookings compared to last year. However, the war in Iran disrupted forecasts and bookings. He noted that the current situation remains uncertain, impacting potential revenue for hotels and the broader economy. Significant discounts to tour operators have further affected business profitability.
Furthermore, Vavlitis disclosed that hotel businesses face increased costs due to energy price hikes, supply chain issues, and wage increases from collective bargaining agreements in April. Despite these challenges, the hotel industry implemented wage raises without seeking postponements.
Vavlitis shared that ACTE has engaged with commercial banks at the highest level, receiving full support for businesses consistent with banks. This support, alongside government assistance in April, provides optimism for the industry's resilience.
Despite rising costs, accommodation prices have decreased. Vavlitis conveyed to the President of the Republic and relevant Ministers that price reductions alone will not alleviate fears causing reduced bookings. He noted that economic factors, such as inflation and interest rate hikes, impact key source markets like Germany and the UK.
He highlighted that travel has become a way of life rather than a luxury, aiding the tourism industry's recovery from crises. Additionally, Vavlitis mentioned that some hotels have not brought in additional foreign staff, despite approvals, due to interest from abroad in working in Cyprus.
Source: Cyprus News Agency