“Our thinking does not need to change, the world does!â€
Cyprus Tourism: Einstein Was Wrong!
“Our thinking does not need to change, the world does!”
BY DR. THEODORE PANAYOTOU
Albert Einstein cautioned us that “we can’t solve our problems by using the same kind of thinking we used when we created them”. Time after time, he was proven right. In Cyprus however, whether the issue is the Cyprus problem, the economy, the environment, or tourism we are confident that we can prove him wrong. We stubbornly insist to keep using the same kind of thinking to solve problems we created them in the first place. Our approach to reviving our tourism, our single largest economic sector, exemplifies this.
A generation ago, Cyprus was an exotic, pastoral, hospitable and picturesque tourist destination with unique cultural experiences for the visitor. In our strife to maximise the number of visitors and our short-term profits we overbuilt, mostly haphazardly, and treated both the environment and tourists as inexhaustible resources to be exploited without mercy, with little concern for the sector’s future, or the country’s reputation as a unique tourist destination. In the process we lost our unique elements, the hospitality, the cultural context, the local colour, our authenticity, our uniqueness, our X-Factor, if you wish.
Having little left that is unique in our “value proposition” to tourists, we began competing entirely on cost. But our costs kept rising along with our standard of living. You got the picture: disappearing uniqueness, loss of character, loss of identity and inexorably rising costs; you do not need an Einstein to tell you that you are in for trouble: selling what has become a very price-sensitive commodity (with many close substitutes) while prices keep rising leads mathematically to a loss of market share especially when new competitors emerge with more authentic products at a lower cost.
At the same time with rising incomes and the information revolution, tourists’ preferences in our traditional markets began to change away from what we offered (sun, sand and the basic needs of food and shelter at the bottom of Manslow’s Pyramid of needs) towards experience–based tourism (adventure, knowledge, history, heritage, healthy living, value). Instead of this change being a boon for us, considering our rich historical, archeological and cultural heritage and attractive natural environment (what is left of it), it has become our nemesis.
Rather than learning our lessons and making a 180 degree turn to rediscover our uniqueness and authenticity in our historical, cultural and natural heritage, we dug in our heels and kept competing on costs by offering discounts and employing lower cost labour from abroad, thus digging ourselves deeper into a hole. This was a real Greek tragedy in the making but, as is in every Greek tragedy, a “deus ex machina” of one kind or another, has saved the day (temporarily). The fall of the Soviet Union and Eastern Europe handed our tourist industry two presents on a golden platter: cheap labour and a new source of customers, friendly Russians in search of kindred spirits and a safe haven by the sea. At the same time the overvaluation of the British pound made Cyprus a retirement haven for the British.
The need for change was averted once more. The precariousness of both windfalls did not enter our short-term profit maximisation calculus. Nor were we too concerned about the further loss of identity and uniqueness of our tourist product with the employment of low-cost labour, without providing the necessary training in local culture and language, let alone in our traditional values of hospitality and customer service. Now that our British and Russian saviours, both victims of the economic crisis and our rising costs, are departing in droves, we are praying for a new “deus ex machina”. One thing we are not doing is what Einstein advised us if we truly and permanently want to solve our problems, “change our thinking, and our mindset”.
The formulation of the new Strategic Plan for Tourism, currently underway, presents a golden opportunity for a new thinking. Such new thinking will draw on both our historical, cultural and natural heritage on the supply side and the new realities and improved tourist preferences on the demand side to transform the tourist sector from its moribund state into a flourishing heritage-and-experience- based hospitality industry. The great risk, however, is that, despite the good intentions of the leadership of both the Cyprus Tourist Organisation and the industry itself, the Strategic Plan would be once more forced into the Procrustean bed of old thinking by short-term vested interests and political expediencies. Let’s hope this does not happen this time around, for there may not be another chance for another five years from now.
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Theodore Panayotou is Director of the Cyprus International Institute of Management (CIIM) and Professor of Environmental Economics and Management at Harvard University. He holds a PhD from the University of British Columbia with specialisation in Environmental and Resource Economics. Dr Panayotou has an extensive research work having written over 100 books, monographs and papers published internationally on subjects ranging from environmental economics and climate change to resource management and tourist development. In 2007, he was recognised for his contribution to the Nobel Prize won by the UN Intergovernmental Panel on Climate Change (IPCC) that year. He has served as advisor to many governments at the highest level including Brazil, China, Cyprus, Indonesia, Russia, Thailand and the US and several countries in Central America, Eastern Europe and the Middle East. He advised the World Bank, UNDP, UNIDO, UNEP, FAO, and USAID and served on the board of directors of the Center for Tropical Forest Science at the Smithsonian Institution, and the China Council for International Co-operation on Environment and Development.
