Fourth month of decline
There seems to be no end in sight for the collapse in tourism arrivals that began in November, with the latest figures showing a drop of 8.9% year on year in the number of arrivals in February.
Moreover, we don’t even have the excuse of a high baseline in the same period of the previous year, since tourism arrivals also collapsed in February 2005.
Although we are out of peak season, it is still worrying that Cyprus is now into its fourth consecutive month of tourist decline. Arrivals fell year on year by 8.1% in November, 3.9% in December, 6.8% in January and 8.9% in February.
There are probably half a dozen main reasons for the collapse.
First, while teh government struggles to give the national carrier a future, our highly paid pilots, apparently trying to buy Cyprus Airways on the cheap, continue to play havoc with tourists’ plans by going on strike without notice, and thus putting off anyone wishing to come to Cyprus.
Second, Cyprus is a “budget free zone”. No budget airlines have established themselves in Cyprus, probably because years of government feet-dragging and disputed contracts have delayed the upgrading of the airports in a way that would attract budget airlines.
When you can fly to Milan for GBP 50, a flight to Cyprus looks awfully expensive.
Third, a good interest rate return on Cyprus pound deposits is keeping the pound very strong–around 2% above its central parity rate against the euro. This is making Cyprus look expensive for euro-area countries such as Germany. Arrivals from Germany dropped by 29.7% year on year in February.
Then there are the more speculative reasons. Daily Brit-bashing by Cypriot politicians and the media may be putting off nationals from the country that supplies over half of our tourists.
The Helios Airways crash last August may still be putting people off booking flights to Cyprus.
Finally, hostility towards anyone visiting or promoting visits to northern Cyprus could have alienated a brand new market, namely people who came to Cyprus (via the south) for the first time precisely because there was a novelty factor: the ability to stare at the barbed wire constructions and wander over into the north.
Amid all the gloom, however, there are little rays of hope: in eight out of the past nine months, revenue has risen on the year-earlier period.
That may be because the markets that have held up during this downturn–the Gulf, Israel and Russia–tend to be big spenders.
In addition, it is still icy cold in northern Europe, which will help make the 20 degrees Celsius temperatures here (in between showers) particularly attractive.
Fiona Mullen
