Tourist arrivals from Russian tumbled by 32% over the year earlier in March, calling into question reports that Larnaca airport was flooded with Russians coming to get their money out of the country as the banks closed for nearly two weeks and capital controls were imposed.
The number of Russians visiting dropped to 7,686 in March 2012 from 11,300 in March 2011, after a drop of 3.6% in February.
Prior to that, Russian arrivals had been driving tourism growth in Cyprus, rising by 42.8% in 2012, 49.2% in 2011 and 50.5% in 2010, while arrivals from the UK, fell cumulatively by more than 10% in the same period.
Tourists from Russia had become the second largest market after the UK, with 477,119 arrivals in 2012, compared with 959,459 for the UK.
Arrivals from Greece also dropped sharply in March, by 15.2% to 8,056, while arrivals from Germany declined by 2.5% to 11,113.
The only major market showing growth was the UK, where arrivals in March (Western Easter was celebrated in that month) rose by 12.2% to 39,170, having fallen by 6% in 2012.
UK arrivals might also have been boosted by the swarm of journalists who arrived on the island during the banking crisis, probably most of which were from Britain.
For the first three months of the year tourism arrivals were down by 10.2%. This also calls into question the idea that Cyprus can rely on tourism to replace banking and financial services, which have taken a severe blow since the crisis.
Until March financial and professional services were the only two main private sectors that had continued to grow (albeit at a slower pace) throughout the six-quarter recession.
They were also the main two sectors creating jobs, particularly among young, educated Cypriots.
According to a recent report by Fiona Mullen and Marina Theodotou published by PwC, employment in business and international services rose on average by 3.9% per year in 2007-011 whereas employment in tourism declined by 1.7% in the same period.
Calls abroad that the banking sector must ne “shrunk” were a key reason for the approach taken by the Eurogroup for its partial bailout of Cyprus.
The Cyprus government will contribute EUR 13 bln, primarily to resolve and recapitalise the banking sector, and the European Support Mechanism and the IMF will contribute EUR 10 bln, primarily to cover maturing debt and budgetary needs.
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