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The upgrading of the hotel industry over recent years is noticeable, both in terms of buildings, as well as the quality of food and service.
You must have noticed the young, mainly foreign waiters, as well as some imaginative chefs who have made eating out more enjoyable.
The older “traditional” generation is gradually fading out (with their many advantages mind you) and a new generation of tourism industry employee are created, to the extent that various local colleges that train such potential staff are running out of vacancies.
Restaurants with a “theme” such as Italian, Mexican, Chinese (very few Indian we regret to say) are a preference to tourists, in addition to the local meat and fish taverns and despite the rather short tourist season, they have a profitable business.
One Mexican restaurant in Ayia Napa has daily three sittings, another hamburger place on the 5th floor of a hotel has two sittings and another steak house with a reservation waiting period of 7-10 days at least.
Quality is the main attraction, as is the public relations towards the diners.
This upgrading, however, has brought about the increase in prices, which, now, on average is approximately €30 p.p. plus drinks.
The latter (drinks) is unacceptable with the average charge being 3-4 times the supermarket acquisition cost.
What is also shocking is that local Cypriot wines are sometimes difficult to be found on the wine list, with the average charge at €25 per bottle (cost €8 per person at least).
Quality tourists and high-income group clients seem not to be deterred by such costs (if value for money) and despite the locals’ initial negative reaction, it seems that the higher charges are becoming more acceptable than before.
We exclude Limassol, since there the cost is around €70-€100 p.p. Having said that, small tavern-style establishments outside the tourist areas or in the suburbs, do not exceed €20-€30 p.p. (including drinks).
We write this article based on a Greek TV report about Mykonos and the high cost of living there.
It compared a Bougatsa (Greek sweet) in Mykonos which sells at €47, in Athens for the sum of €7 and in Salonica €5.
Although such Mykonos charges are unacceptable, they are in accord with the house prices which show a sales rate of €10,000 per square meter, compared to Athens €2,000/sqm and Salonica €1,500/sqm.
Holiday home prices in Cyprus compare favourably with most holiday destinations which are on average €2,000-€2,500/sqm for average quality homes save Limassol and Larnaca seaside locations, which range from €7,000/sqm (Larnaca) to €15,000/sqm (Limassol).
When one compares the infrastructure facilities provided here, the low cost of property taxes and stamp duties, as well as the other tax benefits (e.g. death duty), the cost is not excessive.
Owning a property in Cyprus is not as costly as in other tourist destinations.
Staying with Greece, the property tax equals almost that of the rental income, but then very few countries have the problem of the common expenses that we have here.
The problem regarding holiday homes is the lack of direct flights at airports close to large European towns.
So, compared with our competitors such as Spain/Portugal/Italy etc a huge part of a potential market (e.g. Germany) is lost.
To have direct connections with some European/Russian destinations is a problem since we seem to think that “we have a connection” – yes but from which town bearing in mind the distance when a potential buyer/tourist has to travel almost 3 hours to the airport and 3 hours back plus travel time to Cyprus.
We are getting there with the numerous infrastructure projects underway, such as the two new marinas (we do not count Paphos and Larnaca) with the casino (again in Limassol).
But there is a lack of frequent public transport (governed by the taxi Mafia – unknown in other countries).
Imagine if we had taxis from Larnaca airport to Nicosia that cost €20/trip instead of the thieving €40-€60 (similar high charges also within the towns) how more attractive the island could be.
Airbnb is coming into the market with increasing demand and the comparative cost vis-à-vis hotel establishments are half the price (with many limitations mind you).
These sort of lettings are attracting real estate buyers since the returns on such an investment is more than 10% p.a.
What is important to note is the upcoming hotel industry in Nicosia, with four new small-scale hotels being built in the centre.
When one compares the ex-Cyprus Hilton charges, these hotels may be an alternative, whereas based on press reports, these boutique hotels earmark gourmet restaurants as an attraction.
So, we expect that Nicosia will benefit from the expected rise in tourists with a positive result for the local real estate market.
