Cyprus drives tourism through hospitality investment

Limassol, Cyprus, is scheduled to get a Hard Rock Casino in late 2019 or early 2020.

According to the European Travel Commission’s latest report, Russian outbound tourism is recovering as the ruble improves.

The Mediterranean and the Baltic countries are attracting the most Russian visitors, led by Cyprus with a 48.9-percent increase, where the country’s government is turning to gaming to extend its tourism away from the beach. 

According to the European Travel Commission’s European Tourism – Trends & Prospects report, the majority of destinations reported healthy growth in the last months of 2016. Iceland remained the top growth destination, with visitor numbers up 40 percent, followed by Cyprus up 20 percent, owing to improved air connectivity and off-season visitation. 

FREE DAILY NEWSLETTER

Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

“This performance may have involved some gain in market share at the expense of Turkey…given the recurrent threat of terrorism and the tumultuous political landscape following the attempted military coup in the summer of 2016,” the study said. “Russia was a notable contributor to this growth with arrivals up 48.9 percent and overnights 31.9 percent higher.” 

According to the latest report issued by the World Travel & Tourism Council, the direct contribution of travel and tourism to Cyprus' GDP in 2014 was €1.11 billion—7 percent of its GDP—and was expected to rise by 5.6 percent to €1.17 billion in 2015, and to rise by 4.1 percent per year from 2015-2025, to €1.76 billion (8.3 percent of total GDP) in 2025. 

Drivers

Part of the increase in off-season visits have come as a result of the government’s attempts to extend the tourist season by two months to cover the shoulder months of December and March. Golf has been the driver for this, and the government announced an incentive scheme aiming at accelerating the construction of golf courses.

Gaming is also key. A 500-guestroom casino resort is currently being built in Limassol by Hard Rock International and Melco International Development, at a total cost of a reported €500 million. The site, which is expected to open late 2019 or early 2020, will be preceded this year by a temporary casino. The development will be the first after the Cypriot government reformed its existing gambling regulations to authorize brick-and-mortar casino gambling in 2015. 

The consortium expects to finalize contracts for a 30-year licensing agreement with the Cyprus National Gaming Board and Casino Supervision Commission this April. The consortium will be allowed to operate as a monopoly for the first 15 years.

The government’s goal is to increase arrivals of tourists from the current 2.6 million to 3.5 million over the next five years. To assist this, the government has announced its intention to set up a specialized 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.

“European destinations acknowledge the need to remain competitive in a sector that is swiftly adapting to the diverse needs of travelers from both established and emerging markets,“ Eduardo Santander, executive director, ETC, said. “Only through increased commitment and cooperation from the European tourism authorities will Europe remain a competitive destination and will succeed in fostering inbound travel.”

Cyprus appears to be taking him at his word. 

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.

Suggested Articles

The Inn at Elon, owned by an affiliated entity of Elon University, plans to use all revenue beyond operating costs to fund scholarships.

Her Lyda Sofa, Fascio Collection and Crossbeam table all earned recognition from the Chicago Athenaeum Museum of Architecture and Design.

The wearable device ensures hotel staff can quickly request help anytime and anywhere on property.