Revenues from Cyprus tourism.

Seasonality economics

Many SIDS rely on a single economic sector, like tourism, as their primary source of employment and economic expansion (Pathak et al., 2021). Cyprus has a service-based economy, with tourism being the island’s primary source of economic growth. In fact, Cyprus has experienced tremendous economic growth, primarily from tourism, since the late 1970s. By capitalising on its beaches and good climatic conditions, Cyprus enjoyed rapid tourism expansion (Koutra and Karyopouli, 2013). Every year, the number of individuals travelling inside the country and overseas doubles. In part at least, this is attributable to the emergence of information technologies that allow travellers to purchase flight tickets and accommodation independently and in advance. Each and every destination attracts tourists in a variety of ways throughout the year. In this, the demand for tourism services in a particular area or country may differ according to month. Cyprus, being a destination that is high in demand during the summer period, is having to face the consequences of seasonality on an economic level – each and every year. Although managing seasonality has been a priority of the strategic plan for many years, Cyprus has not as yet, addressed its seasonality problem (Karyopouli and Koutra, 2012). The economic implications of seasonality include the inefficient use of tourism resources and the overcrowding of tourist sites and attractions during high-demand seasons (Ferrante et al., 2018). For small island developing states like Cyprus, it is also evidenced in labour instability and, as a result, the unemployment of workers each year after the peak season period. Although seasonality is typically seen as an issue, one may argue that this is a relatively constrained economic or supply-side perspective and that there are certain benefits to destinations that experience seasonality (Butler, 1998). In his research on seasonality in tourism, Butler gives an example of when seasonality is beneficial. For example, when the demands of tourism and visitors are lower during the off-season, the environment and its inhabitants – both human and non-human – can benefit. During these times, infrastructure can be repaired and upgraded and the natural environment can be rebuilt and restored. While there are some positive aspects of seasonality, there is also a way of mitigating it. Calantone and Johar (1984) propose a method that can be used in the mitigation of seasonality, a marketing concept known as “benefit segmentation” of consumers where customers are divided into groups based on the benefits they hope to receive from a particular product category. By doing so, it is possible to better understand consumers and provide services that relate to travellers’ expectations and needs. This could add value to tourism in a peak season, which is essential for a SIDS like Cyprus.

Sustainability and seasonality

According to a review of research, seasonality is particularly severe in island destinations (Andriotis, 2005) and seasonality and sustainability play a significant role in tourism. Being a key factor, seasonality affects the environment due to the high number of visitors congregating in particular areas (Martın et al., 2014). This leads to resource overuse, interference with flora and fauna, excessive waste production, lower quality of life for residents, and, most importantly, the loss of identity for destinations. Due to these factors, SIDS usually turn to sustainability to lower the impact of seasonality in island states. In practice, sustainable tourism development is primarily seen in small-scale, localised projects that, while admirable in and of themselves, have little in common with the requirements of sustainable development. This may be due to the advances of tourism which involves inherently unbalanced power relationships, and the nature of tourism consumption as an ego- centric activity (Sharpley, 2003). For a state like Cyprus, it is essential to follow sustainability protocols as they relate to tourism, especially in high season months. Further, there are questions about the longer-term contribution of tourism to an island’s ongoing, sustainable development due to the nature and repercussions of tourist development.

Methodology

This study adopts a qualitative approach by examining the information retrieved from statistics published in academic articles and other official documents such as the Cyprus Tourism Strategy 2030. The aim of the study is to identify actions and measures to tackle seasonality. In particular, the research questions are:

RQ1. What are the reasons why Cyprus has a seasonal tourism industry?
RQ2. What are the main steps that the tourism authorities are taking to expand and

diversify tourism demand on a year-round basis?

The analysis of the data is based on a three-step thematic approach: (1) analysing tourism revenues, (2) seasonality in Cyprus and (3) measures to tackle seasonality.

Revenue from tourism

According to the results of the Passenger Survey carried out by the Statistical Service of the Republic of Cyprus (Tourism, n.d.), revenue from tourism reached V69.1 million in March 2022 compared to V25.6 million in March 2020.

Between January and March 2022, revenue from tourism is estimated at V136.9 million compared to V14.6 million in the corresponding, pandemic affected period of 2021 and to V115.3 million during the period January–March 2020 (Revenue from Tourism, n.d.). Despite COVID-19, people were still travelling in 2021. For example, a total of 1,936,931 visitors, including 1,756, 334 from Europe visited Cyprus in 2021. Cyprus was mainly visited by tourists from Russia (519, 174), the United Kingdom (390, 683), Poland (113, 126), Greece (109, 395), Ukraine (95, 811) and Germany (93, 092) (Predefined Tables, n.d.). Tourist arrivals were 315,018 in May 2022 compared to 100,852 arrivals in May 2021. From January through May 2022, tourist arrivals totalled 849,058 compared to 156,825 in the corresponding period in 2021 and 246,556 in the period between January and May 2020 and 1,121.361 arrivals in the period between January and May 2019. Arrivals from the United Kingdom were the primary source of tourism for May 2022, representing 40,1% (126,324) of total arrivals, followed by Poland with 7.4% (23.197), Israel with 6.9% (21.749), Germany with 6.5% (20.592), Sweden with 5.1% (15.943) and Greece with 4.4% (13.905).

A peak in tourist arrivals was seen just before the pandemic hit in 2019 and the most significant decrease in tourist arrivals was at the time of the pandemic in 2020 (see Figure 1).

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For 79.5% of tourists, the purpose of their trip in May 2022 was holidays, 12.5% visited friends and relatives and 7.9% visited for business reasons (see Figure 2).

Tourist arrivals reached 339,242 in September 2021, representing an increase of 288.4% compared to September 2020 (during which 87,334 arrivals were recorded) and a decrease of 35.3% compared to September 2019 (with 524,707 arrivals). For the period of January– September 2021, tourist arrivals totalled 1,299.392 compared to 512,184 in the corresponding period of 2020, reflecting an increase of 153.7% and a decrease of 60.1% compared to the period from January to September 2019 (3,260.546 arrivals). Arrivals from the United

 

Figure 1.

Tourist arrivals

Figure 2.

Tourist arrivals on May 22 vs May 21

  

Figure 3.

Tourist arrivals: September 2021

Kingdom were the primary source of tourism in September 2021, representing 28.8% (97,741) of total arrivals, followed by Russia with 26.2% (88,983), Poland with 6.1% (20,625), Ukraine with 4.4% (14,767), Greece with 4.1% (13,944) and Germany with 3.7% (12,608). In September, 2021, 86.6% of tourists visited for holidays, 9.3% visited friends and relatives and 4.1% visited for business reasons. In September 2020, 79.5% of tourists visited Cyprus for holidays, 13.4% visited friends or relatives, and 7.2% visited Cyprus for business reasons (see Figure 3).

Tourism and seasonality in Cyprus

Seasonality can be defined conceptually in relation to Mediterranean tourism as the periodic divergence that a tourist destination experiences in relation to the conventional time boundaries of the tourist period, which begins in April and ends in October. While tourist markets operate uniformly (Goran Corluka, 2017), Cyprus has consistently been recognised as a summer resort, and recruiting visitors during winter remains difficult. The notion of “sun and sea” has dominated tourist promotion in Cyprus, which has caused seasonality in tourism, resulting in an uneven distribution of tourism inflows throughout the year. However, according to the Cyprus Tourism Report, its highly competitive environment (meaning that the visitor experience greatly influences the appeal of a destination) suggests that Cyprus offers a highly competitive Mediterranean experience. There are five major tourism areas in Cyprus: Famagusta, Paphos, Limassol, Larnaca, and Nicosia. Each area provides a diverse range of tourism products (DW Dynamic Works Ltd, n.d.), drawing a diverse spectrum of travellers.

Cyprus’s peak season for tourist arrivals lasts six months, from May to October (DW Dynamic Works Ltd, n.d.). In an effort to lessen the seasonality impact on tourism, the government plans to extend the season by two months to include the shoulder months of December and March. Karyopouli and Koutra, (2012) suggest that the government should focus on Cyprus as a winter destination rather than a resort summer destination and in so doing could develop its winter season in order to tackle seasonality. It is essential to understand whether Cyprus has and can provide the necessary products to its potential customers in the winter season. Such products could be Christmas holidays in Platres, skiing in the Troodos mountains, or a completely different approach via the development of new forms of tourism, as NFT: “promote the feel of the place and an appreciation of local uniqueness”. Further, the authors point out that seasonality could be created since: “tour operators and air travel companies control most of the tourist flows to Cyprus, and their unwillingness to continue their flights during the winter season creates this one-peak seasonality form, hence negatively affecting any effort to create a year-round destination”. It could be the reason for challenges in developing and promoting Cyprus as a winter destination.

Gronau and Kagermeier (2013) argue that Cyprus can offer more than the majority of Mediterranean destinations and suggest focussing on active tourism. The authors draw a parallel between active tourism being a form of special interest or niche tourism. However: “. . . niche marketing strategies for active tourism products can be seen as a way of repositioning tourism products and destinations. However, they need a highly developed level of entrepreneurship associated with a high quality and service level”. It will, for sure, require re- orientation of a product, and quite complex products will need to be developed and branded. Another challenge is that the national tourism organisations, such as the Cyprus Tourism Organisation (CTO), primarily perceive their role as promoting and guaranteeing a certain level of quality rather than taking on a leadership role at the destination. In the past, however, the organisation made an effort to create “a more authentic tourism product”, such as pilot initiatives in the fields of hiking, biking (bike routes in the Troodos Mountains), and trekking, together with an agrotourism programme and different types of handicrafts (such as the

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Laona project, the museum in Inea, the herbal garden in Pano Akourdalia) all of which are offered to potential customers.

Another study by Boukas (2019) observes that one issue brought up in interviews as a persistent issue facing the traditional Cyprus tourist industry is seasonality, which could be managed with the help of rural tourism. It examines the well-being of residents by considering the growth of rural tourism in Cyprus, its primary forms, and how it improves the quality of life for locals. The author sees the relationship between the development of rural tourism and tackling seasonality and the well-being of the residents and states that: “rural tourism promotes tourist activity in attractions that generate lower pressure on the environment”. A similar study was conducted by Litavniece et al. (2021), where nine rural villages, such as Laiya, one of the villages in the larger Honey Routes Cyprus village network, and Platres, which promotes the lavender theme, were examined.

A study conducted by Loizou et al. (2013) on the competitiveness and prospects of tourism in Cyprus shows that there is a lot to improve on in relation to initiatives that add special interest tourism categories to the Cypriot tourism product. This is clear from the percentage rates of the other types of tourism that receive special incentives when choosing Cyprus (Figure 4):

The image of “sea and sun” has remained unchanged for many years, and travellers tend to choose this type of tourism when coming to Cyprus.

Tackling seasonality in Cyprus

Cyprus’ tourism industry is still steadfastly seasonal. The new Cyprus tourism strategy aims to improve seasonality and develop Cyprus in a way that positively impacts the economy, society, and the environment (Deputy Ministry of Tourism, 2017). The tourism strategy was centred on reviving Cyprus’ tourism growth and revenue, repositioning its tourism brand,

 

Figure 4.

Assessment of the main motive for choosing Cyprus as their ideal holiday destination (scale 1–5)

and strategically shifting towards an enriched and diversified tourism product, able to draw more high-spending tourists and break into new niche segments and markets (National Tourism Strategy of Cyprus–THR, Tourism Industry Advisors, n.d.). This includes attaining 39% of overnight stays between November and April and tripling the number of overnight stays in rural areas from 100,000 in 2018 to 400,000 by 2030 (The Cyprus Tourism Industry, 2020). According to the Deputy Minister of Tourism, along with developing the entire island as a travel destination, the emphasis will not only be on beach resorts but also on ensuring that locals and small local communities are at the centre of the island’s tourism industry (Perdios: Cyprus on Path towards Sustainable and Smart Tourism, 2022). It also means that Cyprus’s distinct cultural history as part of the Eastern Mediterranean provides specific opportunities to differentiate the product from other Mediterranean rivals (Gronau and Kagermeier, 2013). Ecotourism is one of the types of tourism that can address the many reasons for seasonality since it attracts older visitors whose vacations are not constrained by work or school holidays (Agius and Briguglio, 2021).

Spencer and Holecek (2007) suggest that in order to tackle seasonality and reduce its negative impacts on tourism businesses, efforts to attract visitors during non-peak seasons must become more effective, but this can only be achieved by better understanding the characteristics of low-season markets and, alternatively, promoting fall-tourism. However, “achieving this understanding is challenging because of the inherent complexity of the fall season, resulting from the many changes that occur during autumn, including declining temperatures; the reopening of schools; and the arrival and departure of fall foliage . . ., football, and hunting seasons.” As an alternative, individual measures to address seasonality involve hosting events in low seasons to spread demand and help fill existing capacity. For example, marketing strategies targeting specific groups of tourists or products, celebrations (Christmas, New Year, Valentine’s Day), weddings, which are an excellent alternative to hot Cyprus weather in the peak season.

In a study by Cuccia and Rizzo (2011), the patterns of a specific tourism destination’s seasonality are discussed, and it is argued that seasonality may alter over time in relation to the destination’s life cycle, even when the seasonality of the tourism demand varies relatively slowly. This study focuses on Sicily, and one of the examples of tackling seasonality is cultural tourism by exploring natural and historical places and attending cultural events. In this regard, Cyprus possesses a wide array of historical and cultural attractions–a total of 125 - and all are easily accessible (“Cyprus-Tourism,” 2015). Further, promoting cultural and business events, such as concerts or professional exhibitions, summits and forums, can help attract tourists in the low season.

Sutcliffe and Sinclair (1980) proposed the growth of other types of tourism, such as low- cost, off-season vacations that older people could take advantage of; vacations centred around cultural activities, historical tours, sports like skiing, horseback riding, or golf, and business tourism, in addition to de-seasonalising tourism. Aside from these, tourism facilities sometimes lack sufficient funding. Throughout the remainder of the year, off-peak season revenues are frequently relatively low. Furthermore, a place can be more susceptible to unfortunate incidents that could harm tourism (Jang, 2004).

One of the analyses mentioned in the Cyprus Tourism Strategy Report is about the interest in Cyprus. The main point of this analysis is to understand the main aspects that make Cyprus interesting and attractive as a destination. One of the crucial points is the “potential for a long season or even an all-year-round destination” (Cyprus Tourism Strategy Report, 2017).

Among the problems outlined in the Cyprus Tourism Strategy 2030 is seasonality which points out that: “Tourism has always been the heartbeat of Cyprus’ economy . . .”, a National Tourism Strategy (2030) (“Cyprus-Tourism,” 2015) has developed a strategic focus in regards to establishing Cyprus as: (1) a year-round destination, (2) a quality destination, (3) a digitally smart destination and (4) a place where all residents can benefit from tourism. Examples of

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these initiatives are focused on rebranding the island on an international level and offering more than just “sun and sea”, improving airline connectivity to the island, supporting investments in special-interest products, improving price competitiveness and value for money, benchmarking tourism services versus competing destinations by retrieving data from online reputation management platforms, encouraging repeat visits to the destination through a loyalty scheme, and spreading tourism revenue across all regions of Cyprus by promoting the authenticity of rural and mountainous areas and spreading tourism wealth to other sectors of the economy by linking authentic gastronomy with agriculture (National Tourism Strategy, 2030 – Foreword, 2017).

Tourism statistics

The tourism sector in Cyprus has grown steadily and quickly since 2015, following the general global trend. Year-on-year increases in visitor arrivals over the previous five years and significant expenditures on tourism infrastructure have aided the sector’s upward trajectory and re-establishment as a critical part of the local economy. Economically, the 4 million visits from tourists in 2019 brought in V2.7 billion in direct income or 12.2 per cent of nominal GDP (“Effect of Covid-19 on Tourism and Cypriot Industry”, 2021).

Summary

Cyprus has been dealing with seasonality for many decades a phenomenon that is cyclical in nature and connected to changes in the conditions of SIDS. It is common for seasonality to appear in the tourism industry due to consumer demand (high or low) in specific months of the year and it is essential to understand and know how to deal with it. In Mediterranean states like Cyprus, seasonality causes problems for the national economy, with its characteristic seasonal employment pattern of tourism workers and higher unemployment during the low season. Hence, a reduction in seasonality not only engenders a more even pattern of employment but it helps to boost tourism revenue. The key measures that can be taken in terms of tackling seasonality are: to step away from the traditional image of “sea and sun” and instead, focus on portraying Cyprus as a winter destination, with different and alternative tourist activities, such as rural, niche, special interest, active, and cultural tourism. Further, by promoting business and cultural events, the island can hope to attract more tourists during the low season.

References

Agius, K. and Briguglio, M. (2021), “Mitigating seasonality patterns in an archipelago: the role of ecotourism”, Maritime Studies, Vol. 20 No. 4, pp. 409-421.

Andriotis, K. (2005), “Seasonality in crete: problem or a way of life?”, Tourism Economics, Vol. 11 No. 2, pp. 207-224.

Bender, O., Schumacher, K.P. and Stein, D. (2005), “Measuring seasonality in central europe’s tourism– how and for what?”, 10th International Conference on Information and Communication Technologies (ICT) in Urban Planning and Spatial Development and Impacts of ICT on Physical Space, Wien, available at: https://conference.corp.at/archive/CORP2005_BENDER.pdf.

Boukas, N. (2019), “Rural tourism and residents’ well-being in Cyprus: towards a conceptualised framework of the appreciation of rural tourism for islands’ sustainable development and competitiveness”, International Journal of Tourism Anthropology, Vol. 7 No. 1, pp. 60-86.

Butler, R. (1998), “Seasonality in tourism: issues and implications”, The Tourist Review, Vol. 53 No. 3, pp. 18-24, doi: 10.1108/eb058278.

 

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