COMMENT: Cyprus tourism product competitiveness

By Stavroula Kousiappa

Tourism is undoubtedly one of the strongest, fastest growing and most competitive industries globally. Countries that traditionally used to be among the most favorite destinations for tourists are now confronted with the increasing competition coming especially from regions with nearly no background in the industry.

In this competitive field Cyprus tries to give its best response since tourism is one of its most important providers of economic intensification. More specifically, tourism is the major source of foreign currency inflows, the major employer for the country’s labor force and the most important resource of the government’s revenues. Thus, the government has to be alert about the new conditions and take considerable action in order for Cyprus to be a competitive enough tourism destination.

From the Travel and Tourism Competitivess Report 2007 of the World Economic Forum – which discovers the factors and policies that determine the travel and tourism competitiveness of the countries – Cyprus ranks 20^th overall among 124 countries and it is the country with the highest rank among the countries that recently joined the European Union.

Among the features which assist Cyprus’ ranking are the country’s high tourism infrastructure with high availability of hotel rooms, car rental companies and easy access to ATMs, the strong tourism perception since Cypriots are considered as open  to foreign visitors and the government’s high prioritization and expenditure levels on the travel and tourism industry. The report continues that Cyprus lacks in its policy environment which means the need of lessening the restrictions regarding the ownership of companies by foreigners and the restrictions on the openness of bilateral air service agreements plus the need for improvements on the environmental regulations.

Although the ranking is satisfactory, further issues need to be taken into consideration in order to have a clear view about the performance of the country’s tourist product in international markets. For example, the evaluation of tourists’ satisfaction from visiting Cyprus can provide important signals concerning the possibility of tourists to visit the island again and what the demand level is.

A study carried out by the Economics Research Centre of the University of Cyprus examined how well tourists evaluate Cyprus as a holiday destination. From the results it appears that tourists are in overall satisfied from their stay in Cyprus and more than 49% of the sample will probably visit the island again. This outcome comes from the high scoring of the country’s hospitality and island’s natural and cultural resources. What tourists disliked is that the country is an expensive destination. The prices paid for the quantity and quality of the services being provided are high compared to other destinations. In addition, 28% of the sample stated that Cyprus was worse than what they expected, while an equal percentage supported the opposite opinion that their actual satisfaction was higher than their anticipation.

In general, tourism in Cyprus seems to be on a good track with strong potential, although the region of the Mediterranean Sea has been demystified and it is no longer on the top of the list with the most attractive tourist destinations. Tourists’ preferences are changing through the years and they become more demanding. For that reason the government, in cooperation with the Cyprus Tourism Organization, revised its marketing and promotion strategy by introducing new tourism products like the sports tourism and agrotourism. Of course improvements are still needed but at the same time the companies which are involved in this industry ought to follow the strategic plan and try to become more competitive compared to those in other destinations with features similar to Cyprus. After all, quality and diversification of products will make the difference and will lead to the completion of our country’s target.   

 

* Stavroula Kousiappa has an MA in Industrial Economics and is a Research Executive at Creditinfo Cyprus.