The continuing crisis in the Middle East is already affecting both tourism and fuel prices in Cyprus, with authorities closely monitoring developments in an effort to limit potential negative effects on the country’s economy.
Tourism stakeholders have begun recording declines in hotel bookings despite the restoration of air connectivity with Europe. The issue was discussed during a meeting held on Monday at the Deputy Ministry of Tourism, attended by representatives from PASYXE, STEK, ACTTA, Hermes Airports and PASYDIXE.
Decline in bookings and slower demand
Deputy Minister of Tourism Kostas Koumis said after the meeting that Cyprus’ air connectivity with Europe has largely been restored, as all European airlines have resumed their flight programmes to and from the country.
At the same time, he clarified that the flight cancellations currently appearing in the country’s aviation schedule concern airlines operating routes from Middle Eastern countries. In some cases, however, certain airlines have already resumed services.
“With regard to bookings, as already mentioned in recent days, some cancellations have been recorded, mainly for the period of March to April. For the following months there is a slowdown in the pace of new bookings. The most important point for the entire tourism industry is that tourism activity in our country continues without disruption. The rapid return of airlines is certainly a vote of confidence in the Republic of Cyprus, the government and the country’s tourism ecosystem,” Koumis said.
The Director General of the Cyprus Tourism Enterprises Association (STEK), Chrysaimili Psilogeni, told Politis that according to information from members of the association, some cancellations have been recorded in recent days, mainly affecting March, April and May.
“For the following months we are observing a slowdown in the rate of new bookings. Nevertheless, tourism activity in Cyprus continues normally and hotel and tourism businesses are operating without disruption,” she said.
Psilogeni emphasised that it is essential for international markets to receive an accurate picture of Cyprus as a destination.
“The message that must be conveyed to international markets is the real picture of Cyprus, which is one of normality and smooth operation of the tourism sector. It is important to avoid the reproduction of images or impressions that do not reflect reality, so as not to create unnecessary concern among travellers and to safeguard the momentum of tourism and, consequently, the country’s economy,” she said.
Uncertainty affecting the summer outlook
The Director General of the Cyprus Hotel Association (PASYXE), Christos Angelides, said that hotel cancellations have been recorded for March and April, while for May and the rest of the summer there have been cancellations as well as shifts in bookings, though to a lesser extent.
“For the time being we do not see mass cancellations for the summer. However, uncertainty is increasing. New bookings for the summer are at very low levels and the balance compared with last year is negative,” he said.
Angelides added that the uncertainty created by regional developments is affecting the sector, even though Cyprus remains a safe destination.
“Cyprus is a safe destination and this is something we must all highlight as our main advantage. Vigilance, optimism and planning are required in order to minimise any negative effects,” he noted.
The President of the Larnaca Chamber of Commerce and Industry, Nakis Antoniou, pointed out that with 35 to 40 flights being cancelled daily, it is inevitable that hotel cancellations will also occur.
“This is a blow to the country’s tourism sector. We hope the problem will end soon so that we can look forward to a good summer season,” he said.
Air connectivity with Europe restored
Hermes Airports announced on Monday that Cyprus’ air connectivity with Europe has been restored, as flights that had been temporarily suspended due to the Middle East situation resumed in recent days.
Airlines from the Lufthansa Group (Lufthansa, Austrian Airlines, Edelweiss and Eurowings), as well as British Airways, easyJet and Transavia, have resumed operations to and from Larnaca and Paphos airports.
In addition, Emirates resumed its daily Larnaca–Dubai route on Saturday.
The flights that remain cancelled involve routes to and from Israel, as well as services connecting Cyprus with Qatar, Bahrain and Lebanon.
Rising fuel prices
Beyond the impact on tourism, the crisis is also pushing up fuel prices following a surge in global oil prices to around $120 per barrel. Prices fell somewhat during the day but remained above $100 per barrel.
The President of the Cyprus Petrol Station Owners Association, Savvas Prokopiou, told the Cyprus News Agency that gradual increases in fuel prices are expected in the Cypriot market in the coming weeks, following the sharp rise recorded in global oil prices.
The Director of the Consumer Protection Service, Konstantinos Karagiorgis, explained to Politis that if current refinery prices remain elevated, in some cases by as much as 50% for certain fuel categories, the next fuel shipments received by companies are likely to be more expensive.
This, he said, would ultimately lead to higher prices for consumers.
Karagiorgis added that the service will closely monitor price developments and, if unjustified increases are detected, the relevant provisions of consumer protection legislation will be applied.