Major challenges remain for Cyprus tourism, said on Tuesday Finance Minister Charilaos Stavrakis, speaking at the Cyprus Tourism Forum 2010, held in Nicosia.

Stavrakis pointed out that tourist arrival in Cyprus in the last years showed a downward trend, adding, that revenues from tourism over the past two years indicated an even greater decline.

''Major challenges remain for tourism and there are no easy solutions,'' he stated.

The Finance Minster said it would be more appropriate to focus on medium-term measures, in collaboration with the tourism stakeholders rather than focus on temporary measures to improve the tourism product.

According to Stavrakis, among the major problems of Cyprus tourism is the inability to attract tourists with high incomes and high-purchasing power.

Additionally he describe as “non-competitive” the tourism product offered by Cyprus, compared to the product offered by other competitor countries which are cheaper.

He also noted that Cyprus is influenced by some uncertain factors, such as the exchange rate of euro against sterling (GBP).

“It doesn't seem to be easy to regain our competitiveness, taking into account the costs in Cyprus, so definitely the next few years will be difficult”, admitted Stavrakis.

He added that Cyprus would most probably continue to lose market share, but expressed optimism that the picture may improve due to the cyclical recovery from the recession in global markets.

Stavrakis pointed out that despite the large fiscal challenges over the last two years, Cyprus Government has prepared two packages of support for tourism of about 50 million euros per year.

He also referred to indirect support given to tourism by the Government, by having its own state-controlled carriers.

Speaking about the condition of Cyprus Economy, the Minster of Finance recalled that the Government did everything possible to enhance liquidity in the banking and cooperative system.

At the same time he said he was not at all satisfied by the lending rates of banks and cooperative institutions.

“The lending interest rates in Cyprus are still too high compared to Eurozone interest rates, which show major reductions, according to official figures from the European Central Bank”, said the Finance Minister.