The new growth model for Cyprus and the role of tourism

The new growth model for Cyprus and the role of tourism


 

By Constantinos Petrides, Deputy Minister to the President of the Republic

 

Our new growth model will be – based on our own strengths and on our own capability to create wealth, income, and jobs, rather on the past practice of using borrowed resources,  In tourism we have strengths. Many more than those we have exploited so far. Tourism has the potential to generate much more income for our country and we have a plan, how we can make this a reality.

The importance the Government attaches to tourism is reflected in the policy decisions and actions,  carried out during the past  two difficult years. : :

– Enhancing air connectivity, through  promoting further the implementation of  open skies policy. – Signing of a large number of agreements with tour operators and airlines that help mitigate seasonality and improve Cyprus’ connectivity. We secured important agreements maintaining existing ones and adding significant new routes to Cyprus with ten large international airlines. New routes from Barcelona, Rome, Berlin, Munich, Hamburg, Vienna and many other cities have been added.

– Taking decision for establishing an air connection between Larnaca and Brussels, by offering subsidies to airlines and setting this route as a Public Service Obligation. We soon expect to conclude the process of selecting the airline that will take on this route with regular flights.

– Signing a package of six incentives to entice more airlines to Cyprus, with airports’s operator

 

 

Are these sufficient?

 

Undoubtedly, not. But  are actions that supported tourism during a very difficult period for Cyprus. And it is no coincidence, that tourism was one of the major pillars that helped the economy to keep upright when the crisis hit our country two years ago.

These actions will continue and be intensified.

If we want to unleash the hidden dynamics of Cypriot tourism, we must do much more.

Firstly, we must recognize not only our strengths but also our weaknesses. We admit that a number of tourist firms are in difficulty.

The tourism sector itself suffers from structural problems that we ought to fix in order to make the tourism industry stronger, more competitive, more extroverted.

We cannot be happy if after 13 years of reduction in tourist arrivals our aim is to reach the number of arrivals of 2001, while arrival numbers in other competitive destinations have increased considerably.

Nor can we be happy when 80% of our tourist arrivals are based on only two markets, making this vital sector of the economy highly vulnerable to external shocks.

But, in order to move forward we need to start from a realization. That, as much as we like to say that Cyprus is a unique tourist destination, we are no longer alone. There are other “unique” destinations.

It may well be that 20 years ago Cyprus had a much better infrastructure and a more integrated tourism product than our neighbors. In recent years, however, our competitors have madeextremely important steps forward. In some areas we have been outdone by them. We need not only to catch up with but to overtake them.

It is for this reason that we as Government immediately proceeded to design infrastructure projects. Once completed, these projects will improve and significantly diversify our tourism product, attracting foreign investments and new money.

– With fully transparent procedures, we rapidly completed the relevant studies, consultation, drafting of laws and regulations, for creating an integrated casino resort in Cyprus. We made decisions putting an end to a debate that lasted about 15 years. In a few years, Cyprus will be proud to have a modern Integrated Casino Resort , unique in the region, which is expected to bring hundreds of thousands of quality tourists every year, all year round.

– The Limassol Marina has been completed and we rapidly finalized the licensing procedures for the construction of the Ayia Napa Marina.

– We are working intensively to prepare a notice of interest for the exploitation of state property in the area of Troodos.

For us, the policy and strategy on tourism should not only concern short-term actions or just the promotion of our tourism product. Tourism is more than marketing.

It requires substantial and continuous improvement of the product which we are to promote.

It requires parallel actions and the development of an integrated, horizontal, national strategy.

 

But, how do we proceed?

 

1. Immediate objective: The actual modernization and simplification of tourism legislation

It is the first time this is done. Various studies but also findings of the stakeholders themselves, both public and private, have shown that the current legislative framework needs to be modernized; that it contains distortions which add unnecessary cost to our tourism product without up grading it.

We place great importance on the regulatory framework. That is so because every regulation, procedure or provision affecting either the quality or the cost of our tourism product significantly affects our competitiveness against our neighbors. It may cause tourists not to come to Cyprus and go elsewhere.

2. Strengthening and modernizing the tourism governance framework

We are not pleased when others point out to us that the governance framework of our tourism industry is weak. It is our responsibility to fix it. It is for this reason that in the context of the study for restructuring the competent ministry – that of Energy, Commerce, Industry and Tourism – we address the issue of strengthening the tourism governance framework.

3. A more long-term, national strategy on tourism

The strategy, which will be scientifically documented and examined, with clear actions and not just theories, will include inter alia:

I. Assessing the main problems that hinder the development of tourism in Cyprus including our product competitiveness in both quality and price, and developing concrete actions and measures to tackle them.

II. Evaluating the position of Cyprus compared with other competing destinations.

III. Explaining the not so good performance of Cyprus in recent years in specific markets and examining correction measures.

IV. Assessing prospects in the tourism market and international demand and repositioning Cyprus on the tourist map, identifying the markets where it can compete successfully, taking into account its own characteristics and competitive advantages.

V. Analyzing specific sub-sectors of tourism, such as nautical, weekend, winter, congress, health tourism etc. but also developing specific political actions to promote these subsectors if they are deemed promising; suggesting measures which will include incentives, the construction of appropriate infrastructure, legislative measures, education etc. The aim is quality upgrading and diversification of the tourism product so that it is no longer one-dimensional (sun and sea).

VI. Measures for increasing productivity which is comparatively low.

VII. Integrated projects or master plans for specific areas related to the promotion of a particular kind of tourism, which will also facilitate foreign investment in tourism.

With regard to infrastructure and public spending, the strategy will indicate the deficiencies and needs in specific areas and specific types of tourism.

On the basis of these needs, we will plan the channeling of public and European funds, in order to create a more modern tourism infrastructure in a targeted way.

The benefits of the strategy will become apparent over time. However, it will contribute to the development of a new, more competitive tourism model that will last. For, I really believe that Cyprus can live off tourism.


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