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20 June, 2024
 
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Tourists are spending 13% more in Cyprus

The increase in spending by tourists in Cyprus indicates a growth in the industry for 2023

Maria Eracleous

Maria Eracleous

If there is one thing that has changed in the past year's data on the tourism industry, it is the realization that, even though there are fewer visitors coming in than in 2019, tourism revenues are not declining at the same rate; rather, the difference is much smaller than it was for tourist arrivals. More specifically, statistics made available to the Deputy Ministry of Tourism show that while tourist arrivals were down 20%, revenues were down only 10% (through October 2022). They are estimated to be 2.29 billion in real terms, down from 2.53 billion in the same period of 2019. According to the monthly statistics, October had the highest revenue because it saw an increase from 2019.  In terms of tourism revenue, keeping spending at these levels while seeing an increase in tourist arrivals in 2023, even over last year, is viewed as a very positive development and a target. According to the Deputy Ministry, this year's revenue will be close to reaching full recovery compared to 2019.

Spending more

"the recorded increase suggests that the tourism product offered has improved overall and visitors found a variety of activities and experiences to engage in and spend money on"

But given that tourist arrivals are down in absolute terms, how can the increase in revenue be justified? The data that is available suggests that visitors are now spending more money each time they visit Cyprus (not counting the cost of air tickets). In particular, it is estimated that tourists' spending has increased by about 13% on average for each trip. In fact, visitor spending had grown by 33% as of January 2022. Of course, there were a lot fewer arrivals than usual, so the impact on overall revenue was not as large. When compared to September of last year, tourist spending had increased by 17%, but arrivals had decreased by 21%. The month of October, which set a record for tourism revenue, is a good example. In this month, the gap in arrivals narrowed significantly to -8% compared to 2019, while tourist spending was up 16% and tourism revenue recorded a positive +7%.

Amount per trip

In nominal terms, the cost per trip is estimated at €777 on average for the ten months to 2022. For the same period in 2019, the expenditure per trip was €685. This is an increase of €92. Moreover, the highest spending was recorded in the summer months (ranging from €702 in May to €886 in August), a sign that may indicate that tourism will return to normality. The figures show an increase in the length of stay of tourists in Cyprus - from 9 to 9.5 days. At the same time, daily spending increased by 7.4% - from around €76 per day to around €82 per day. Even more encouraging is the fact that tourist expenditure per trip increased for visitors from all countries for which preliminary data were available from the Statistical Office, with the exception of French tourists (whose arrivals recorded a significant increase in 2022). The largest increases in spending per trip were recorded by tourists from the US (+56.9%), Israel (+35.7%), Denmark (35.4%), Lebanon (32.3%), Italy (30.3%) and Norway (28.5%). The only market from which a decrease in spending was recorded was France for the 10 months in 2022. The average spend per person in January-October 2022 ranged between €371 for tourists from Greece, and was as high as €1,119 per trip for Swiss travelers, and in all but one case, this was higher than the corresponding prices in January-October 2019. Taking into account the average number of nights spent in Cyprus, visitors spent more than €100 per day (including accommodation and other costs but excluding airfare).

Above the average is the daily per capita spending by Swiss tourists (€129), tourists from Israel (€137), Austria (€118), Denmark (€105) and Lebanon (€102). In order to properly estimate the 13.4% increase in spending per trip in the first ten months of 2022 compared to the same period in 2019, it is important to bear in mind that the use of the general Consumer Price Index (CPI) may not accurately reflect tourism spending. For example, a typical tourist may spend more than half of their expenditure on accommodation, while accommodation prices represent only 0.15% of the Index. In its analysis, the Ministry of State says that in order to make a better comparison of tourism expenditure, a more relevant indicator would be the "Accommodation Services" component of the Harmonised Index of Consumer Prices (HICP) published monthly by Eurostat, which takes into account the prices charged by accommodation establishments. In fact, for the reference period (January to October), accommodation prices were 2.5% lower in 2022 compared to 2019, probably due to special offers offered by hoteliers to fill the gap created by the Russian market.

More activities

Both the fact that visitors from the majority of nations spent more money each day and the fact that they stayed in Cyprus longer on average than the average trip length in 2019 are thought to have contributed to the increase in spending per trip. This is a strong signal that the recorded increase in tourism revenues is not only attributable to the change in the country mix but instead suggests that the tourism product offered has improved overall and that visitors found a variety of activities and experiences to engage in and spend money on.

These developments highlight the importance of indicators such as tourism revenues, arrivals, overnight stays and daily expenditure and the need for continuous monitoring and data analysis. The creation of an official database to provide a clearer and more detailed picture of tourism in Cyprus has been requested by tourism bodies, while the creation of a Tourism Observatory, aiming at recording and analyzing data on the whole range of tourism activities both in Cyprus and in competitive destinations, was among the pre-election proposals of President Nicos Christodoulides and should be implemented by the current Deputy Minister of Tourism, Costas Koumis.

[This article was translated from its Greek original and was originally published on Wednesday in Kathimerini's printed edition of 'Oikonomiki']

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Cyprus  |  tourism

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