The Cyprus Tourism Industry
Built around unique and diverse experiences, Cyprus’ tourism sector has always been a major player for the country’ s economy, which is in itself experiencing healthy growth, outperforming forecasts and maintaining its solid outlook.
The tourism market is one of the largest economic sectors in Cyprus and has experienced substantial growth over the last five years with breaking records in both arrivals and revenues, steadily increasing in winter months (Nov-April) with 100% increase in tourism arrivals from 2014 to 2019.
The year 2019 recorded the highest numbers reaching a peak of 4 million of tourists from 2.4 million in 2014, accounting for 13,1% of nominal GDP. Revenues grew to €2.68 billion in 2019, while the country was reported to have the largest growth in ground and port infrastructure in the worldwide travel and tourism index published by the World Economic Forum. According to latest estimates, the sector could contribute around 25% to the country’ s economy by 2030.
National Tourism Strategy 2030
Through a clearly-defined Vision and Strategy to launch the full rebranding of Cyprus and establish the island as a quality, all-year destination, tourism can strengthen its place and be one of the top economic performers by 2030, not only through direct revenues, but also through the major multiplier effects that tourism has on the local economy. The vision of the new Cyprus Tourism Strategy is to develop Cyprus in a sustainable way, which positively impacts our economy, society and the environment, improving seasonality, with the objective of reaching 39% of overnights during November-April and quadrupling overnight stays in the rural areas from 100,000 in 2018 to 400,000 by 2030.
The Tourism Strategy also aims at diversifying into other local and cultural experiences while attracting multi-million investment into large-scale infrastructure projects.
Efforts are focusing on diversifying, enriching and improving the quality of the touristic product and therefore, investment opportunities into thematic areas, such as luxury and lifestyle tourism, nautical tourism, cultural tourism, sports, conference, health and wellness, and agro-tourism.
The tourism and hospitality industry has seen significant investment, with luxury marinas in all coastal cities, golf courses, leisure & theme parks, high-end resorts being developed across the island. The Ayia Napa Marina with an estimated investment of €220 million, is currently under construction and expected to be fully completed in 2022, while a number of multiple multi-million developments are in the planning stage including the Paralimni, Paphos and Larnaca Marinas, expected to exceed €1 billion in total investments.
As a marker of success, is the decision by the Hong Kong-based Melco International Resorts and Entertainment to choose Cyprus for expanding its flagship brand name outside Asia for the first time, investing more than €600 million for Europe’s largest integrated casino resort, which is expected to attract an 1 million visitors per year.
Tourism-related construction activity is highly indicative of the shift towards large scale, high value developments, further strengthening the already strong hospitality industry. Hotels represented the 16,4% of the total value of building permits in 2019, while the total value of new hotel developments was estimated at €610 million.
Today, investors like NCH Capital and Invel Real Estate Partners and leading hotel chain groups like Radisson, Hilton, Marriott, Fattal, Grand Hyatt are expanding their investment projects in Cyprus, investing both into city hotels and sea-side resorts.