The service sector and especially tourism industry is very important for Cyprus. The direct contribution of tourism was 6% of Gross Domestic Product. The direct contribution includes all internal expenses for tourism and leisure on all sectors.
For the future this is expected to grow further for Cyprus, but the entire international tourism market will continue to grow.
The total number of people visiting Cyprus has risen sharply over the past 3 years, after a deep dip in 2014. 2016 was the most successful year ever for Cyprus. In addition, these tourists are quoted as the highlight of the year with July and most percentage growth in March. Most of these tourists come from Europe. Of these, most tourists come from the UK and every year there are more tourists from UK to Cyprus, but in percentage terms this market share decreases. After the UK, Russia, Germany, Sweden and Greece provide many tourists. Cyprus is also an attractive country for the market in Asia, especially West Asia is relatively rising. Especially by the countries of Israel and Lebanon.
In addition to an increase in the number of arrivals, the total tourism revenue also increases. While the expenses per person per day and the length of stay decrease.
The possibilities of spending the night in Cyprus are: hotels, hotel apartments, tourist villages and traditional buildings. Most options for overnight stay are in Paphos, while Famagusta are the most hotels and hotel apartments. Which means they also have the highest beds capacity in Cyprus. In addition, many hotels in Famagusta want to expand or build new hotels. As a result, substantial investments have already been made in Cyprus in recent years.
Net occupancy rates are calculated by multiplying the number of available beds per night by number of days open per period. Famagusta has the highest occupancy rate on all different parts (hotels, hotel apartments etc.) except in tourist villages in Cyprus.
The total overnight stay in Cyprus has increased the number of guest nights in all areas, but this is mainly reflected in business people who come for the development / increased demand in commercial economy. Looking at the behaviour of residents of Cyprus, it can be said that there is only an increase in hotel apartments.
Cyprus also has a lot to do with seasonal discontinuity. However, a strategic plan has been set up to improve this, with small successes. The strategic plan is to use Cyprus more for alternative holidays for food or other aspects than just summer vacations, which are popular because of the warm climate and the beautiful beaches on the coast. These alternative holidays are increasingly becoming popular with travellers and not only more suitable for niche organizations.
There are various factors that influence the tourism sector. Firstly the place where tourists go, mainly Famagusta, Paphos and Limassol. These are seaside resorts that serve mainly as a summer resort and that is why Paphos and Limassol are open in winter for tourism. The main advantages of Cyprus as a destination for cultural tourism are: the heritage, the archaeological sites that the country offers and the guide possibilities. But health, well-being and religion are also important attractions for the destination.
Another factor that affects the tourism sector is the promotion of Cyprus. The government of Cyprus is working on a national strategy that should increase the benefits of Cyprus and remove the disadvantages. The government is also working on a plan for the European Commission to set up a foundation and to write an investment plan in order to improve the island and make it easier to invest.
The government's strategy includes proposals to increase and improve the occupancy rate and the period of opening of hotels and logistic companies. In order to improve Cyprus's competitive position in tourism. And to improve the appearance of Cyprus and to improve the professionalism of staff in the tourism sector through continuous improvement of knowledge, skills and capacities.
An analytical marketing plan is also described in the strategy. A very important point in this marketing plan is to provide for the tourist season and more airports (currently two) and flights. To attract more visitors. The airport is managed by Hermes Airport, which is engaged in an incentive scheme for airlines flying through airports. This arrangement means that new routes will be created, the winter capacity will be increased and the long-term volume will help companies with these new destinations.
The last factor affecting the tourism sector is the challenges that Cyprus still has. Cyprus is a relatively expensive destination. Making more All-inclusive packages available, partly due to competition and demand.
But it remains important to improve the quality of the tourism product and to expand it with other aspects / facilities.
The Ministry in Cyprus that deals with tourism has also made an incentive scheme for investments in sustainable enrichment and improvement of the tourism product. This is cooperation with the European Regional Development Fund. The main purpose of this plan is to enrich the tourist product and diversify it from other products through modernization.
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