Maria Eracleous
In a stark indicator of the challenges facing the Limassol casino-resort, the recent dismissal of 181 employees reveals significant issues four months after its grand opening. The construction process was marred by unfavorable circumstances, starting with the onset of the Covid-19 pandemic and compounded by the termination of the passport program supporting the product. The conflicts in Russia's war in Ukraine, ensuing sanctions, and the recent war in Israel further exacerbated the hurdles faced by the mega-project.
The decline in casino traffic, attributed to the loss of tourists from Russian and Israeli markets, prompted the company to issue a statement acknowledging the necessity of difficult decisions. Operating costs are being restructured to ensure the long-term viability of the project. Concurrently, reports suggest an unfavorable working climate, with attitudes leading to resignations even from senior positions. The hotel workers' guilds SEK and PEO emphasize a challenging working environment, restrictions on union access, and the instrumentalization of workers, calling for the intervention of the Minister of Labour. As of now, there has been no update from the Ministry on the matter.
Reflecting on past mistakes, the casino's struggle to attract the expected clientele four months after its inauguration echoes historical missteps. The initial reliance on affluent customers from Russia and Israel, a common practice in tourism, necessitated an early marketing adjustment. Melco CEO Lawrence Ho acknowledged the impact of developments in Israel on City of Dreams Mediterranean during the Q3 2023 financial results, stating that the company is actively working to adapt its marketing strategy. Questions arise about the repetition of reliance on one or two markets, particularly for a business of City of Dreams' magnitude, and whether the company will demonstrate the necessary adaptability to manage the situation.
The project, operational since July 10, initially employed 2000 workers, with an additional 400 hires in subsequent months. Following the recent layoffs, the company's future course remains uncertain. Exploring opportunities, the prospect of opening up to European markets is being considered. However, the performance in other Middle Eastern countries, including the United Arab Emirates, reveals significant divergence. In October, arrivals numbered 1800, with 3454 from Lebanon, 1251 from Jordan, 1184 from Armenia, and minimal numbers from Kuwait (193), Bahrain (208), Qatar (337), and Saudi Arabia (871). These figures underscore the challenge in meeting investment targets of attracting over 300 thousand tourists annually.
