Stakeholders in Cyprus tourism fear that this year’s season may well be over before it has begun as COVID-19 lockdown will continue for Easter while major tourist markets are facing a far worse fate.
While the World Tourism Organisation is saying the coronavirus crisis could impact the growth of the global industry for the next five to seven years, local actors are slowly coming to terms with the fact that this season cannot be saved.
Talking to the Financial Mirror, Fanos Tekelas, UCLAN Cyprus lecturer in Innovation and Entrepreneurship, said that even if restrictions on free movement are lifted, airports are most likely to stay closed until the end of spring, as authorities will be wary of letting the virus back in after it clears up.
“Even if airports do open in time for summer, we should not expect tourists jumping on the plane heading for the island for holidays,” said Tekelas.
“A lot of people in countries, on which Cyprus tourism has traditionally depended on, such as Britain, are being hit badly by the outbreak. Even if the cases flatten out sometime in the summer, the financial blow they will have suffered until then will put a freeze on their holiday plans” he added.
Tekelas argued that the outbreak of the virus in Cyprus and Europe will bring on a recession which will have a greater toll on the industry than the financial crisis which started in 2008 and came to Cyprus in 2011.
“A pandemic can take up to 18 months to clear up. The industry in Cyprus will probably be put on life support for the next couple of years as a result of the coronavirus pandemic.”
He added Cyprus would be lucky if it could get some tourists to come over towards the end of the summer, and maybe the first months of autumn.
Hotels and other tourist enterprises will need state aid to survive as they do not have an alternative.
“Cyprus hotels can and will turn to Cypriot tourists, however, a majority of our fellow citizens will also be in financial dire straits following the crisis as many may lose their jobs”.
Businesses will have to reopen for people to start getting paid proper salaries, and money circulating in the market before Cypriots feel safe to book holidays at resorts.
He said the demise of Cyprus tourism enterprises will spark a chain reaction as many businesses rely on tourism, from restaurants to taxi drivers, which will, in turn, have an impact on the wider economy.
Tourism contributes some €4.5 bln to the country’s economy or 20% of the island’s GDP.
“The state will have to intervene and support tourist resorts, especially the smaller ones, which do not have reserves to keep their businesses alive.
“Unfortunately, that doesn’t seem like an alternative, as the state is currently focusing on overcoming the crisis, concentrating primarily on supporting public health.”
Hotels on life support
Director general of the Cyprus Hotels Association, Zacharias Ioannides said that they are in a tight spot as March, April, and May have already been written off, with hoteliers not optimistic about the summer months. All hotels have been shut down under emergency coronavirus measures.
Ioannides said that many hotels are on life support, hoping the crisis will end as soon as possible so they can survive.
“If it was not for the tax relaxations given by the government and the freeze on paying loan instalments for the next months, most businesses would have already gone under,” said Ioannides.
He also credited the government for standing by hotel employees at this difficult time, which in turn has benefited hotels.
He noted that no one knows when life will return to normal, “but even when it does, people from abroad will not be too keen on travelling”.
Asked about whether hotels will attract local tourists, Ioannides said that the Cypriots were always regarded as one of the most important tourist categories.
“Most certainly we will see hotels trying to attract Cypriot tourists with attractive offers. However, we must not trick ourselves in believing that turning to Cypriot tourists will save the day as inbound tourism is responsible for 93% of our income.”
A source from the Deputy Ministry of Tourism said there were too many unknowns in trying to draft a rescue plan.
“We do not know what we are up against as no one can predict when the crisis will be over. We are trying to draw up an action plan without having a clear picture and data changing day today,” the source said.
The ministry is currently more focused on helping other state services to deal with the health crisis.
The source noted that the DMT was responsible for facilitating the accommodation of a large number of people who had to be quarantined at hotels after returning from countries with a coronavirus outbreak.
“Unfortunately, the crisis caught us by surprise and overturned plans we had made for not only this year but the decade ahead.”
The Deputy Ministry had announced its ten-year strategy in February, aiming to increase tourist arrivals from 5 million and income by 30%.
“We were ready to go to international markets with a very aggressive promotion scheme, but all our plans have gone down the drain”.