Bad businesses shouldn’t be saved

6 mins read

We have studied the announcement by the Small Business Owners Association (POVEK) warning the state not to reduce subsidies the Government is paying them.

The Association declared that approximately 20-25% of the local shops (tourist areas in Ayia Napa-Paralimni) have closed and if the subsidies are reduced/cut, the percentage will increase.

The reduction of the tourist visitors is a fact, but it is worthy looking at the details.

We refer to Protaras-Ayia Napa which is the basis of POVEK’s argument on the subject.

  • In our opinion these shops that closed/have a reduced clientele are those that are not up to it to run a successful business. If we are to take as an example the various souvenir shops that are everywhere, they sell all sorts of rubbish made in China and comparing the souvenirs provided by small artists as handicraft, in other countries made locally, there is no comparison.  Yes, they are more expensive, but Greek-made souvenirs do not face the same problem as we have in Cyprus. Quality products (handcrafted) are for sale in most rival countries of ours and even small Malta has souvenirs depicting the local history and architecture [not made, China/abroad].  Similarly, our supermarket-style souvenir shops in large floor areas, with cold décor (if any) and indifferent staff are some of the causes (the rubbish products apart) of their downfall.
  • Is it not strange that some restaurants/entertainment units are struggling/closed, whereas others in the same locality differ in their occupancy (regarding restaurants) with two sittings per night (usually 7.30-9.30 and after 10.00-12.00), whereas for many of them one requires a reservation for a table ranging from 1-2 weeks ahead?
  • Is it not also strange that quality outlets with food cost EUR 50/p.p. (including drinks) have a high occupancy rate with the cheaper units of EUR 20/p.p. have a very low occupancy?
  • Some entertainment outlets which are not in the tourist areas (say ones at Frenaros, Dherynia, Sotira) located a 30-minute drive from the tourist centres are successful.
  • A pub geared to entertain football/sports fans, charging reasonable prices and light snacks, is another destination where one should be lucky to get a table/stool. A beautiful decor, large tv screens placed everywhere at a low volume and with entertaining hosts are some of the reasons for its success.
  • A café with an average 50-60 clients during the day and around 100 clients in the evening (with a guitar player) is most successful, whereas on the other side of the road the restaurant there is struggling because we believe (having visited both) the second establishment has no clue how to work.
  • We are of the opinion that (using our own Greek proverb) “those who create smoke do not necessarily know how to cook”. This is especially so now that we have difficulties with tourism, and we believe that more shops/outlets will close down and those who have no knowledge of the work, low quality of staff and bad management in their business have no chance to survive.
  • If we are to take our national dish “souvlaki” as another example, there are 5-6 outlets in the area but 4 of them cook the souvlaki on a hot plate, as opposed to charcoal. So, it is not surprising that the 2 who use charcoal have a queue and a most profitable take away business, as opposed to the others who are watching their outlets closing down.

It is not strange that demand for real estate relates in part to the facilities provided in the area.


Quality in demand

So it is with satisfaction that we note that quality places are in good demand (see Asian restaurants in Ayia Napa), French cuisine at Protaras and Ayia Napa (quality music) which upgrades the quality of life for local/foreign real estate seekers.

We attribute the increased demand for holiday homes to this in part to the extent that holiday homes in the region of EUR 250,000-300,000 are hard to find (care on the title issue mind you) whereas on the beach units have reached ±1.5mln which are again difficult to find.

We note also that an Italian restaurant between Ayia Napa-Protaras, in the middle of nowhere, with access only with private cars, has a waiting list and a successful take away business, whereas steak houses of quality are ahead of those in Nicosia (we tasted for the first time the Tomahawk steaks – beautiful).

So, we, Cypriot tourists who have a higher budget and mobility than foreign visitors, learned to shop around and target outlets of quality.

We feel that quality pays.

Covid is one of the reasons local tourism increased and we expect that quality will come to play an increasing role in the success of local businesses.

Although we may sound cruel dear POVEK, but if businesses do not come up to scratch, more will close down and those who do not know how to operate, have no chance to survive.