Cyprus Recovering but Challenges Ahead
- Mediterranean summer destinations continue to record strong hotel performances
- Cyprus continues to record tourism growth but still not yet at pre crisis levels
According to figures released by MKG Hospitality's market monitoring benchmark, hoteliers managed to increase both demand and average prices. The analysis also reveals a growing tendency of Europeans opting to holiday closer to home and within the EU – a trend which started back during the 2009 Global Financial Crisis, and was then further spurred by the issues caused during the Arabic Spring. "No doubt, travellers are more comfortable to stay within Europe at the moment, as it is more affordable, shorter distances and safer," states Director of Development, MKG Hospitality, Vanguelis Panayotis.
Cyprus' tourism industry has proven resilient thus far to the adverse economic conditions in Europe, with continued growth. According to the Cyprus Tourism Organisation (CTO), at year-to-date September 2012 tourist arrivals increased by 4.6% over the corresponding period the year prior according. This follows a 10.2% increase in arrivals for the entire year 2011. Tourism revenues also increased by 12.9% so far this year. However, all figures have only just stabilised and still not yet reached pre crisis levels. "Some clever and timely initiatives, such as the support of low cost carrier's expansion to the island have certainly provided a much needed boost, enhancing the destination's accessibility and opening up new markets at a time when the sector was stagnant. This growth also comes during a period when Cyprus took over the EU rotating presidency. Although to see the true impact for the hotel sector, direct benchmarking and comparisons by revenue per available rooms/guest (RevPAR) is more suitable," added Panayotis.
According to MKG, the situation could change drastically as competition from other countries intensifies, and as online travel agencies (OTAs) continue to steal more control over the hotel market.
Mass market destinations in North Africa such as Egypt, Tunisia and Morocco – also very popular with Cyprus' key feeder markets such as the UK, Russia, Germany and other Europeans – are expected to make a big push to restore their industries, whilst fast developing markets Croatia and Turkey will continue their expansion. Tunisia for instance has already bounced back from its severely depressed figures last year, with a significant increase in demand and average prices. Morocco remains only stable, however, there are also clear signs of recovery with the summer month recording exceptional growth. Meanwhile, Croatia and Turkey have showed very good results, and this is considering their fast developing markets. Finally, Malta and Spain's Balearic Islands also faired quite well, enjoying better growth in average room prices, and a relative higher level.
"Aside from the fact that results are positive during a time when the economy is making everything else uncertain, they verify precisely why it's important to monitor and benchmark hotel performance trends in Cyprus. Such data is what allows hoteliers to better understand their position within the global hotel cycle and their competitive markets, thereby allowing them to implement more accurate revenue management strategies to boost bottom line figures," explains Panayotis.
"Now, more than ever, it is crucial that hoteliers know their position in the market, whilst also taking back control of their own distribution channels from OTAs. Indeed, decisions from the industry must be taken now in order to be of benefit in the near future."