Tourists Accommodations and Occupancies in Cyprus

Accommodation offered in Cyprus mainly consists of hotels, hotel apartments, tourist villages and traditional buildings. There were a total of 790 accommodation units in Cyprus as at 31st December 2016 with an overall bed capacity of 84.238.   The greatest number of accommodation units are found in Paphos (265), which is also the city with the greatest number of tourist villages.

Famagusta has the highest bed capacity of all tourist districts in Cyprus there are currently 30 applications for hotel expansion or renovation in the Famagusta area submitted before the Cyprus Tourism Organization. At the same time there are 6 pending building permit applications for new hotels in Paphos, Limassol and Famagusta area. It is estimated that over half a billion euro has been invested for the renovation or upgrading of hotels in Cyprus over the last years 

 

The highest net occupancy rate in the period January to October 2016 was exhibited in tourist villages (89.1%), followed by hotel apartments (74.60%).

The net occupancy rate across all areas including hill resorts, and for all licensed establishments for the same period was 69.8%, exhibiting an increase of 43.4% for the same period in 2015. 

Most accommodation establishments in Cyprus are not open all year round. This usually depends on demand and on the location of the establishment i.e. seaside / city / hill resorts.  Guest nights for non- resident tourists recorded an increase in all categories of licensed establishments, the largest increase being in Tourist villages (26%). 

As per recent research, countries such as Cyprus, Greece and Portugal need to introduce alternatives to complement sun, sea and sand if they want to remain top tourist destinations and help their economies grow.  Studies claim that these countries could increase their tourism revenue by offering holidays focusing on wine and gastronomy, culture, wellness, religion, conferences and agro tourism, such as farm-based holidays. The expansion of the tourism product may reduce seasonality of sun, sea and sand tourism and may attract visitors with higher spending power. 

Cyprus Government is preparing a new national strategy on tourism that will further promote Cyprus and aim to enhance its advantages as a tourist destination, whereas at the same time address the challenges that hinder growth in this sector  The government aims at assisting in growing the tourist appeal of Cyprus, through a number of measures, including the extension of the tourist season to cover the months of December to March inclusive, as well as the implementation of an “Open Skies” policy in an effort to extend both the number of originating airports as well as flights. This aims to help their goal to increase arrivals of tourists to over 3,5 million over the next five years.

The Government has announced its intention to set up a specialised body, through which the tourist industry will be able to draw funds from the European Commission President’s Investment Plan, to enable them to upgrade the island’s tourist product. The Investment Plan focuses on removing obstacles to investment, providing visibility and technical assistance to investment projects and making smarter use of new and existing financial resources. To achieve these goals, the Investment Plan focuses on three areas (a) mobilizing investments of at least €315 billion in three years, (b) supporting investment in the real economy and (c) creating an investment friendly environment The tourism strategy provides a coherent and detailed presentation of the development of the tourism sector and the positioning of Cyprus on the international tourism scene  The strategy’s objectives are to:

  • Increase total direct and indirect tourism revenue
  • Increase tourism arrivals
  • Deal with the phenomenon of seasonality and subsequently the alleviation of the negative results it creates • Improve the viability of tourism enterprises
  • Upgrade the overall tourism experience offered by Cyprus, by providing an enhanced tourist product with significant value added, thus improving the competitiveness of the tourist industry in Cyprus in comparison to other destinations. 

The strategy incorporates proposals to expand and improve the operating period and occupancy rates of licensed hotels, to improve the competitiveness of the tourism industry in Cyprus, upgrade the appearance of the built environment in the tourist areas and promote professionalism among tourist service providers through continuous upgrading of knowledge, skills and abilities of the people working in the industry

The tourism strategy includes an analytical marketing plan. The plan incorporates substantiated targeting of specific segments of the market (through comparative analysis and evaluation), the development of viable marketing targets and the use of implementable strategies. Advertising and promotion will focus on pillars of creative design, purchase of space/time in the advertising media and the evaluation of advertising actions. Special focus will be placed on the identification and enhancement of awareness of Cyprus as a tourist destination, as well as on improving the accessibility to the island via the development of new air links.

Cyprus has two international airports, one in Larnaca and one in Paphos. Both airports are managed and controlled by Hermes Airports Ltd, which offers an incentive scheme to all airlines flying through the airports. Hermes aims to increase the volume of passengers, reward airlines for long-term capacity growth, open and stimulate new tourism markets, encourage winter tourism and enhance the competitive advantage of Cyprus as a tourist destination. Recent examples are the launch of new services such as Dubai-Larnaca-Athens by Emirates and Larnaca- Brussels by Ryanair in 2016. 

Quality of tourist product and challenges: The tourist product in Cyprus is comparatively more expensive than other Mediterranean destinations. This, accompanied by increased competition, has resulted in the rise of all-inclusive packages, especially for arrivals from the UK, Russia and Sweden.  The quality of the tourist product in Cyprus and the real estate component of the industry need further improvement in order to enhance the value-for-money options for tourists. This means both upgrading and up-scaling of hotels and existing infrastructure (including archaeological and other cultural sites), as well as the addition of new projects