Cyprus Tourism Strategy 2030 __________________________________________________________________________________________________
Executive Summary
Artists quarter, Larnaca
Innovative Tourism Advisors
Republic of Cyprus
The Cyprus Tourism Strategy has been developed by THR Innovative Tourism Advisors for the Republic of Cyprus.
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Introduction From success to stagnation and recovery In the second half of the previous century and owing to the efforts of many Cypriots, tourism began to steadily develop in the island, soon becoming one of the most important sources of economic prosperity, able to overcome the negative consequences of the country’s occupation. For a variety of both internal and external reasons, at the outset of this century tourism demand for Cyprus stagnated at around 2,6 million international tourists while global and regional demand has continued to grow at a good pace. In the same period (2001-2013), as per the UNWTO, global international tourism demand grew by 60%, while the demand of the south/eastern Mediterranean and European Union member states grew by 50% and 30% respectively. According to statistics from the World Bank, Cyprus was the weakest performing destination among its EU competitors and neighbouring countries throughout that time. This led to a significant deterioration in the contribution of tourism to economic growth and its contribution to the country’s GDP, in terms of income, fell from 10% to 7% in the period of 2001-2013. Additionally, the amount of truly productive investments has fallen sharply due to low overall profitability. Wealth and job creation has been reduced, the multiplier effect on the economy is lower than in the past and confidence in the future of the sector has significantly decreased. The origin of this situation is a combination of several internal and external causes that have led to a significant reduction in competitiveness in a market environment with many new and very aggressive competitors. However, a promising surge in demand has been observed in recent years that opens up new opportunities.
Cyprus has a bright future as a tourist destination Market research and projections performed along the preparation of the new Strategy clearly conclude that Cyprus has excellent potential to grow again as a tourist destination. It will be possible to attract over 7 million tourists in 2030 adopting a “mass tourism” model, and over 6 million with the “Premium destination” model recommended in the Strategy. As a result of an increase in visitors, Cyprus will accrue significant economic benefits, attract new investment, and create thousands of new jobs. Moreover, the multiplier effect of tourism on the remaining economic sectors tourism the island’s will hence be higher, transforming tourism in the main economic driver of the island. In 2030, according to the Premium Demand Strategy, Cyprus could receive over 6 million tourists and generate around 26.000 direct and 19.000 indirect jobs. The contribution of tourism to the country’s GDP would be over 28%, prompting a total investment amount close to 18,5 billion euros (mostly from the private sector).
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The need for a National Tourism Strategy To take advantage of the opportunity for tourism growth that will help to leave behind the current stagnation scenario, a National Tourism Strategy has been prepared to pave the road towards achieving the vision, transforming it into an action plan and allocating the budgets, deadlines and responsibilities needed to properly implement it. The new strategy will also be the basis to generate the necessary stakeholder consensus and support around tourism development and management. In this sense, the tourism sector must be capable of offering positive value for all parties involved: i) for the local population, who must see their quality of life and confidence in the future improved (not worsened) through tourism, ii) for investors, who should be offered attractive and sustainable investment opportunities with minimum barriers and iii) the tourists, to whom Cyprus should offer an exceptional tourism experience and excellent service. The tourism activity should also contribute to the preservation and enhancement of the natural and cultural heritage for future generations.
The four phases of Strategy preparation The preparation of the Cyprus Tourism Strategy was conceived as a four-phased process shown in the figure below: Figure 1. The four phases of the Strategy preparation
Throughout the process, key research and interactive tools have been applied: •
An extended inspection trip.
•
17 sectorial and regional meetings.
•
33 one-to-one interviews.
•
In-depth market research including 1.700 interviews.
•
40 interviews with tour operators and airlines.
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A long questionnaire for the Cyprus Tourism Offices abroad and an analysis of 17 source markets.
•
Meetings with the Sounding Board and the Project Management Team.
CYPRUS TOURISM STRATEGY
Strategy Overview
The Goal: Value for the Stakeholders
•
The success of the Cyprus Tourism Strategy depends largely on its ability to create value for all stakeholders involved: Value for local society: Better quality of life Value for investors: Attractive and easy-to-implement investment opportunities Value for tourists: An exceptional tourism experience Value for collaborators: Attractive business opportunities
The Core Strategy •
The Strategy Objectives Main variables
2015
2030 Premium Variation model
International 2,66 4,85(1) 82% Visitors (Mill.) Tourism revenue (Mill. 2.391 6.815 185% Euro) Total Tourism 73.500 119.229 62% Employment Production 4.380 12.482 185% (Mill. Euro) Tourism 14% 28% +14 Income/GDP Total investment 18.576 (2016-2030) (Mill. Euro) Wise tourism 850/1000 index (1) International visitors include day visitors Source: CYSTAT 2015 and THR projections
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The Competitive advantage of Cyprus Main competitive advantage The best climate in Europe, all year-round.
And 3 main reinforcers A great menu of tourism experiences, 8 special destination attributes and specific competitive advantages per each business model.
•
The business scope An attractive portfolio of products Sun & Sea, Itineraries & Culture, Meetings, Amateur – Pro Sports and Cycling as first priority. Plus, Short breaks, 4th generation resorts, Wellness, Sailing and Yachting, High -end homes, Nature, Golf, and Weddings as second priority.
Source markets in which to focus efforts to conquer customers UK, Russia, Germany, Nordic, France, Switzerland, Israel, and Ukraine as first priority. And Belgium, The Netherlands, Poland, Ireland, Lebanon, Austria, and UAE/Qatar as second priority
The Premium Destination Strategy A lower growth in the volume of tourists but targeting a larger proportion of higher spending segments that will multiply the contribution per tourist to the Cyprus economy.
Strategy Directions This component of the strategy establishes which directions to follow in order to address each of the Key Issues (a kind of “vision” for each Key Issue). The Strategy Directions give answer to the Strategic Questions and lead to the 22 objectives grouped into the 7 Strategy Outcomes.
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Action Plan The 7 outcomes and 22 initiatives
Six Separate Action Plans
Outcome 1. Deliver an exceptional tourism experience
Plan 1. Cyprus Brand
1. Setting up the “Experience Cyprus” program 2. Introducing the Cyprus Quality Label system 3. Running a visual pollution initiative
Reviewing the current brand, developing a new brand concept, and increasing the brand power by 2-10% per year (depending on the source market).
Outcome 2. Excel in planning and development 4. Implementing the National Tourism Planning initiative 5. Steering Cyprus Tourism Growth model 6. Installing Product Development Unit
Outcome 3. Attract the right amount of vetted investors and MSMEs 7. Establishing Tourinvest Cyprus unit within Cyprus Investment Promotion Agency 8. Launching MSME support program 9. Starting Market partnering initiative
Outcome 4. Conquer more and better yielding customers 10. Building a new brand management system 11. Implementing a world-class marketing plan 12. Managing seasonality reduction initiative
Outcome 5. Benefiting the local society and the environment 13. Elaborating the Wise Tourism Index 14. Fostering carbon footprint reduction 15. Launching “Made in Cyprus” and “Soul of Cyprus” initiatives
Outcome 6. Develop a highly competitive diamond for the tourism sector 16. Creating the Competitiveness Unit inside the NTA 17. Reengineering the legal and regulatory framework 18. Starting human capital initiative 19. Running airline partnership initiative
Outcome 7. Implement smart governance and tourism management framework 20. Installing a new governance system 21. Transforming tourism system management 22. Launching performance monitor
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Plan 2. Products /Segments Establishing a process to successfully develop a select group of products/segments
Plan 3. Priority Source Markets Implementing strategies and types of marketing actions that must be implemented in order to generate tourist traffic towards Cyprus from each selected source market.
Plan 4. Seasonality Reduction Attracting more tourist arrivals during the Pre and Post season, as well as the Winter Season.
Plan 5. Improvement of the Quality Launching a world-class system of quality labels. Tourists will have an easily accessible informative system on the quality offered by Cyprus’ different providers.
Plan 6. Integrated Spatial Tourism Development for major Tourism Areas Guiding a tourism development master planning effort for the 2017-2030 period that can be easily implemented.
A “softer” growth alternative Within every Premium Destination Strategy, a “soft” alternative may be found, based on the “Premium & wise growth” model but with an even lower volume of tourists, maintaining their high spending profile, therefore it requires less new developments. Please refer to section 9.8 of this document for more details.
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A Strategy Map with 7 outcomes and 22 objectives The figure below illustrates the Strategy Map which provides us with a general overview of the Strategy, demonstrating the Goal to achieve, the Strategy’s objectives, the value to generate for stakeholders and the 22 strategic objectives to accomplish, organised into 7 outcomes or themes. Figure 2. Cyprus’ Tourism Strategy Map (Premium destination & wise growth version)
Value for stakeholders
Results for Cyprus (2030)
Become, before 2030, an all year-round sustainable destination receiving 4,8m intl. tourists - 40% of whom during Nov-Apr International tourists (M.) 4,8
Tourism Revenue (M. €) 7.000
New tourism keys to develop 29.000
PARTNERS Attractive business opportunities
CUSTOMERS An exceptional tourism experience 1.
Strategic Processes DRIVERS
GDP Contribution 28%
2.
Total new Employment 45.000
INVESTORS Attractive investment environment & opportunities 3.
Attract the right amount of vetted investors and MSMEs
Wise tourism index 850/1000
SOCIETY Better quality of life and sustainability
4.
Conquer more better yielding customers
5.
Deliver an exceptional tourism experience
Excel in planning and development
A. Dev elop a system of high v alue experiences in Cyprus
D. Implement excellent tourism dev elopment master planning
G. Attract necessary v etted investors
J. Dev elop a powerful tourism brand
M. Design and manage a tool to assess tourism sustainability
B. Significantly improve the v alue along the customer journey
E. Define and manage clear growth models for all regions
H. Ensure competitive MSMEs grow in Cyprus
K. Conquer more higher yielding tourists
N. Reduce carbon footprint of tourism activ ity in Cyprus
C. Dramatically reduce visual pollution in the destination
F. Increase product div ersification and innov ation
I. Increase the quantity and quality of market partners
L. Reduce seasonality
O. Enhance vulnerable economic activ ities and protect cultural identity
6.
Develop a highly competitive diamond for the tourism sector
ENABLERS
Learn and growth
Investment required (public & private) (M. €) 18.500
P. Promote productiv ity improvement tools Q. Reengineer legal and regulatory framework R. Educate and train the right people
S. Dev elop air capacity
7.
Implement a governance & management framework and culture
T. Establish a sound system of modern gov ernance U. Implement an efficient management framework V. Launch a state-of-the-art monitoring system
Source: THR based on “The Execution Premium”, Kaplan & Norton
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Benefiting the local society and the environment
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Acknowledgements Many people have contributed to the preparation of the Cyprus Tourism Strategy. We would like to thank all officials supervising the Strategy, particularly the Project Management Team, comprising of members of the Presidency of the Republic, the Ministry of Energy, Commerce, Industry and Tourism, the Cyprus Tourism Organisation and Hermes Airports which provided valuable inputs and comments, while keeping a close track of progress throughout the process. We would also like to thank the members of the Sounding Board Committee, which included distinguished professionals representing the private tourism sector and other relevant sectors. Our gratitude also goes out to the participants of the 17 territorial/sectoral workshops and 33 interviews, as well as the 41 tour operators and airline companies for their valuable contributions to this plan stemming from their know-how and experience. We re-iterate our appreciation for all those that have contributed, for their excellent cooperation during the strategy preparation process. We are confident of their continued contribution in the upcoming important phase of implementing the Strategy, where the formulated plans need to be converted into tangible realities and benefits for the Cypriot people. We would like to extend our appreciation to the Cyprus Tourism Organisation, and its Regional Offices and Offices abroad, for the focused and sustained efforts they have placed in the preparation of the Strategy. Thanks are additionally extended to the Ministry experts who provided professional support and relevant information and to the administrative staff for undertaking important administrative and financial tasks related to the Strategy Project. Gratitude is also extended to Hermes Airports for sharing with us their knowledge and expertise and providing valuable inputs during the process. Finally, we give special thanks to the Deputy Minister to the President and the Officials of the Presidency who have excellently directed the entire process and have provided significant support and inputs throughout the duration of the project.
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Table of Contents Part A. Tourism business in Cyprus: Vision and challenges
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1.
Tourism in Cyprus today
12
2.
Envisioning
14
3.
Strategic analysis and key issues to be tackled by the Strategy
16
Part B.
The Cyprus Tourism Strategy 2030
29
4.
The goal of the Strategy
31
5.
The Core Strategy
32
6.
Twenty two Strategy Directions and Objectives
42
Part C. Action Plan
47
7.
The Action Plan
48
8.
Six Separate Action Plans
65
Part D. 9.
Implementing the Strategy
Implementing the strategy
79 80
Epilogue
91
Glossary of Terms
95
List of acronyms
97
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Part A ______________________________________________________________________________________________________
Tourism business in Cyprus: Vision and challenges
Kamara tou Koraka Natural Bridge, Protaras
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Tourism in Cyprus today A brief historical overview 1960-74: Cyprus was a pioneering and successful tourist destination that during this time experienced significant and stable growth – mainly within the UK market – achieving extraordinarily high annual growth rates. 1974: The occupation of part of its territory meant Cyprus lost more than half of its coastline and around 40% of its tourism. However, thanks to a major collective effort and an extensive growth in European demand, the island was able to achieve a growth of 350% from 198090 and a further 72% in the following decade (1990-2000). 2000: The emergence of new and important destinations (Turkey, Egypt, Tunisia, Morocco, and Croatia) became much more evident (occasionally due to major governmental support) from this year onwards. These countries managed to gain almost 40 million tourists, which would affect Cyprus. From this moment on, Cyprus has been unable to maintain its market share in both the global and European markets, which have continued to grow. The number of tourists the island receives (including many VFRs) has stagnated at 2,5 million a year, despite the growth of the Russian market. Herein lies a crucial question that the Strategy should try to answer. 2009-2016: The island seems to be recovering somewhat and may even receive around 3,1 million tourists in 2016, its highest number ever. However, this should be analysed carefully as it may be due to safety and security problems in certain tourist destinations that are located in Cyprus’ part of the Mediterranean – Spain, for example, has received an estimated 4 to 6 million “borrowed” tourists for this same reason.
A well-developed and experienced tourism sector Cyprus has competed in international tourism markets for over 50 years by way of its comprehensively developed tourism sector. The figure on the page opposite sums up the sheer size and diversity of the tourism “cluster” on the island of Cyprus. Figure 3. Key components of Cyprus’ value creation system (as per 2014) Attractions and resources Good weather all year round
1260 Archaeol. sites, museums and churches
90 Kms of beach
3 UNESCO Sites
350 Kms of coastline
3 I ntangible cultural heritage
59 Blue Flag beaches
11 National parks
Etc.
Tourism infrastructure
Etc.
2 I nternational airports
12.862 Kms of road network
2 Cruise ports
257 Km of motorw ay
3 Marinas (1,337 berths)
1.784 Taxis
5 Ports
9.458 Rental cars
1 Ski center
2.581 Buses
Tourism services 226 Hotels
4.840 Catering Establishments
801 Accom. Establishments (84.529 beds)
4 18-hole golf courses
500 Trav el agencies & TOs
21 Recreation and water parks
264 Licensed tourist guides
A netw ork of 43 CTO offices in Cyprus & abroad
Etc.
Source: Cyprus Tourism Handbook, CTO 2014 and Foundation for Environmental Education - Blue Flag Programme.
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An important economic dimension Today, tourism is still an important driver of the island’s economy. The tourism sector not only generates direct wealth through wages, business profits and significant tax revenues, but also through the major multiplier effect it has on the rest of the economy – close to an additional 70% over the direct tourism expenditure. The table below shows the main indicators of the tourism sector’s economic significance: Table 1. Main economic indicators of the tourism sector in Cyprus Main indicators
2005
2010
2015
1.718
1.550
2.161
2.470
2.170
2.656
Same day Visitors (Thousands) (2)
187
277
120
Domestic Visitors (Thousands)
914
1.247
1.297
Tourist volume (Thousands)
3.571
3.694
4.070
Overnight Stays (Thousands) (4)
15.058
13.801
13.715
Total Tourism Employment (5)
82,828
61.460
73.500
Tourism Revenues (Mill. Euro) (1) International Visitors (Thousands)
(1)
(3)
Source: (1) CYSTAT 2015; (2) CYSTAT 2014-Statistics on Movements of Travellers ; (3) CYSTAT 2014 Annual data on domestic and outbound trips of Residents of Cyprus; (4) CYSTAT 2014 Hotel and similar establishments overnights; (5) WTTC.
Tourism is present in almost every district The tourism activity in Cyprus is distributed throughout the island’s territory, bringing benefits to most parts of the country as shown in the following figure: Figure 4. Accommodation capacity by district (2015)
Source: THR based on CTO
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Envisioning a. Cyprus: Excellent potential for tourism development Market research performed clearly concludes that Cyprus can obtain between 5,7 – 7,2 million tourists by 2030 depending on the price/quality strategy that is adopted. This can achieve significant economic benefits, attract new investment, create thousands of new jobs, lead to a higher multiplier effect on the rest of the economic sectors and transform tourism into the island’s main economic driver.
Table 2. Projected Tourist Arrivals 2030 by alternative models Millions
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8 7 6 5 4 3 2 1 0
7,240 6,214
5,700 Domestic Day Visitors VFR Business Pleasure
Standard destination
Premium destination
High-end destination
Source: THR projections
b. Vision and mission for the tourism sector in Cyprus 2030 Mission statement: what do we want tourism to achieve in Cyprus Mission Statement Offer the world memorable tourism experiences and improve the quality of life of the Cypriots
The Mission has two priorities. • Offering memorable experiences for the international tourists. • Ensuring that tourism will improve the quality of life of the local population while preserving their local identities and instilling greater confidence in their future.
2030 Vision statement: the mid to long term goals for the tourism sector Vision Statement Become, before 2030, a year-round sustainable destination receiving 4,8 million international tourists (40% of whom during November-April)
The Vision contains 3 main components: • The stretch goal: be among the top 5 year-round tourist destinations in the Mediterranean. • Definition of niche: Multiproduct/multimarket destination. • Time horizon: By 2030.
Additional goals to the stretch the main goal The Vision 2030 includes, as complementary goals, developing a tourism sector which is: Figure 5. Additional goals 1
2
3
4
5
Competitive, profitable and sustainable
With a diversified offer
Operational all yearround
With sufficient air connectivity
Able to contribute to 28% of Cyprus’ GDP
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c. Guiding principles The Vision for the tourism sector is accompanied by 5 ‘Guiding Principles’ that should inspire all future decisions made on product, development, communication and management. This set of Guiding Principles will shape Cyprus’ very own tourism model and are what, in the medium to long term, will generate truly sustainable prosperity for the country. Figure 6. The 5 Guiding Principles
d. Change agenda Communicating and creating awareness about the need for transformational change in the tourism sector to all the players involved is not an easy task. The following change agenda summarises the current status versus the desired situation in10 years. Figure 7. Cyprus’ strategic change agenda
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Strategic analysis and key issues to be tackled by the Strategy Once the Vision 2030 had been established, a thorough internal (within Cyprus) and external (in the source markets) analysis was carried out in order to identify relevant factors that positively or negatively affect its achievement. The Strategy must address these, with the aim of activating the more favourable ones and stopping or neutralising those which impede achieving the Vision. Figure 8. Content and purpose of the Strategic Analysis
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Tools employed for the Strategic Analysis a. Internal analysis (in Cyprus) • Setting up of the Project Management Team composed of representatives of the Presidency, MECIT, the CTO and Hermes Airports. Meetings totalling over 60 hours have been held between the PMT and THR Innovative Tourism Advisors. • Establishment of the Sounding Board, made up of prominent members of the tourism industry and presidents of leading business associations that have held meetings with the team for more than 15 hours. • 33 one-on-one in-depth interviews with relevant people in Government, the tourism industry and other fields related to tourism. • 17 regional and thematic workshops with the full participation of more than 80 attendees to analyse issues in the various districts and subsectors such as hotels, meetings, culture, etc. • Technical meetings with CTO and Hermes Airports directors and officers who have contributed their excellent insights on relevant aspects.
b. External analysis (Abroad) •
Questionnaires for the directors of Cyprus’ tourism offices abroad who have assisted us with their knowledge on the main source markets.
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Interviews with more than 40 TOs and airlines to learn of their attitudes and opinions on Cyprus’ current situation and potential as a tourist destination.
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17 market research reports on the same amount of source markets, providing information on their potential and Cyprus’ opportunities in each.
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1.700 surveys with potential tourists in 6 major source markets. The comprehensive research effort detailed above has facilitated a deep analysis of the reality of Cyprus’ tourism sector from multiple enriching perspectives. It has also allowed to identify the key issues and market opportunities, gain a full understanding of the preferences and priorities of the industry and Government, and identify Strategic Directions. The following pages summarise the essence of this research and analysis.
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3.1
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Internal analysis: the competitiveness of the “Cyprus” tourism cluster The island of Cyprus is a tourism “cluster” that creates value for tourists, therefore competing with its rivals worldwide. The cluster’s competitiveness (its ability to successfully compete against its greatest rivals with low social and environmental costs) is medium-low. This means that Cyprus should sell its tourism services at a higher price and/or produce these services at a lower cost by offering the market higher value than its rivals, which include Greece, Malta, Mallorca, Antalya, Crete, etc. The elements which contribute, be it positively or negatively, to this evaluation are presented below. • Cyprus’ competitiveness as a tourist destination is medium-low Key findings
Implications for Cyprus
The island’s ability to offer high value to the market and thus compete successfully with its rivals is medium-low, obliging it to compete in terms of price and face the subsequent consequences that this represents for profits and wages. The main causes of Cyprus’ competitiveness performance have been highlighted below.
This situation does not favour profits, investments, and decent wages. Cyprus should make significant economic and political efforts to improve its competitiveness as a tourist destination by improving its value proposition, air capacity and levels of cooperation and governance
• Cyprus’ customer base presents three major weaknesses and challenges Key findings
Implications for Cyprus
Most customers come from the United Kingdom and Russia, purchase Sun & Sea holidays, and do so through packages sold by large tour operators, which negatively affects the seasonality and profitability of Cyprus’ operations and constitutes a very large strategic risk.
Cyprus is currently assuming a very dangerous ‘triple risk’. The island must reduce its seasonality by way of a Separate Action Plan as well as reducing the relative weight of UK and Russian demand, which will mean increasing the market share of other selected source markets. At the same time, it should increase the weight of FIT tourists.
• Cyprus has no relevant strategic assets Key findings
Implications for Cyprus
As a tourist destination, Cyprus has relevant assets such as good beaches, very clean sea water, experience in managing tourism services, etc. However, it lacks strategic assets upon which to build differentiation and a great competitive advantage. The only strategic asset which can be considered unique and differentiating is its climate, a foundation upon which a powerful comparative advantage can be built.
It is imperative that this is compensated in three ways. On the one hand, a comparative advantage must be created based on the island’s climate. On the other, a unique system of memorable experiences should be developed that constitute a real competitive advantage. Finally, various aspects of Cyprus’ general competitiveness should be improved such as its visual pollution, gastronomical weaknesses, internal public transport from the airport, etc.
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• The menu of unique and memorable tourism experiences Cyprus offers is very weak Key findings
Implications for Cyprus
The island doesn’t offer any experiences that work as important travel motivators or contribute to differentiating and giving special value to the destination. This begins to become a “point of parity” where Cyprus is very weak.
This is a huge weakness, as the demand for experiences is one of the most important demand trends that there are. Major efforts will be required here to excellently develop and operate a menu of unique and memorable experiences.
• Insufficient air capacity is a critical challenge Key findings
Implications for Cyprus
Despite great efforts made by the Government, Hermes and other stakeholders, air capacity with the island is extremely lacking, especially with regards to certain source markets and in the medium and low seasons.
This is the most critical weakness of all that cannot be compensated for in any alternative way. The huge efforts made by the Government and Hermes should be further strengthened, including modifications to some traditional paradigms and a greater economic effort for 3-5 years.
• Cyprus has the potential to operate successfully in the medium and low seasons, but today it does not sufficiently meet the conditions to do so Key findings
Implications for Cyprus
A large amount of the activities and tourism services that are offered close in the low or even medium seasons and this complicates things. Air capacity outside the high season is another critical issue.
Cyprus should become a pre-post destination in a first phase and then a winter destination in a second phase. However, in order to do this, the island will have to develop a suitable CVP for these months of the year and conquer new market segments that are likely to generate demand outside the high season.
• Cyprus’ brand as a tourist destination is very weak Key findings
Implications for Cyprus
Potential customers know that Cyprus is a tourist destination, but have no idea what the destination offers. Nor do they know about the benefits and advantages of going on holiday to the island. They have no particular reason to choose Cyprus over other Mediterranean destinations.
This is the second-largest weakness for Cyprus as a tourist destination after air capacity. Developing a powerful brand should be a priority in the coming years and Cyprus must do so very efficiently by including this programme in the new integrated marketing activities that ought to be implemented immediately
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• Visual pollution in tourist areas is a serious problem Key findings
Implications for Cyprus
Due, amongst other things, to poor urban planning and/or a lack of this being complied with, the visual pollution situation today is serious as the aesthetics and personality of tourist areas is one of their main motivations when booking a trip. Some urban tourist areas in Cyprus are beginning to look like highly banal “plastic destinations”.
Most of Cyprus’ urban tourist environments have lost personality and therefore their ability to seduce and differentiate. This means that is essential that the political agreements needed to “decontaminate” these environments and give them back a high level of aesthetics with a strongly Cypriot personality are achieved.
• The legal and regulatory framework is an obstacle to Cyprus’ competitiveness Key findings
Implications for Cyprus
It is complex, insufficiently transparent and objective, very bureaucratic and slow, making it difficult to ensure that development complies with what the system establishes. This represents, moreover, a critical obstacle to investment and particularly foreign investment.
If the current situation does not change dramatically, it will be very difficult to attract the significant volume of investment and SME development that is required. The CTS should not consider simply improving the situation incrementally, rather it should totally reengineer the current system that nevertheless continues adequately regulating that which is fundamental.
• The low performance of governance, leadership and cooperation mechanisms refrain a competitive development Key findings
Implications for Cyprus
The tourism sector in Cyprus has not benefited from an adequate leadership of the successive governments which, moreover, have been unable to collaborate with an organised and strongly positioned private sector. Furthermore, there has been no National Tourism Authority that has the power, budget, and prestige to lead the implementation of policies and strategies.
The current situation does not facilitate realistic consensus among key Cyprus stakeholders at all, making it almost impossible to implement consistent and protracted policies over time. Cyprus must completely transform this situation by increasing the level of government involvement, promoting efficient partnerships amongst the private sector and creating the necessary government bodies to manage the island’s tourism system well. • The absence of efficient collaboration mechanisms between public and private bodies Key findings
Implications for Cyprus
They are usually present in tourist destinations have not been observed in Cyprus, representing an opportunity that should be considered in order to improve the island’s competitive position.
Without this type of collaboration, it is impossible to improve the competitiveness of a destination. Cyprus must encourage the mechanisms and spirit that is required to make this both possible and frequent. The most relevant key players in the sector should be appropriately involved in this.
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Cyprus nevertheless has competitive strengths it must use to its advantage: • High levels of safety comfort and convenience Key findings
Implications for Cyprus
These are critical criteria for choosing a holiday destination that Cyprus should embed into its marketing efforts. However, research has found that about 30% of potential customers are unaware that Cyprus is a member of the EU and have a negative image of the island in terms of security.
This is a first-class strength that Cyprus must exploit much more than it does currently for two reasons. The first is because it is the first criterion used to pick a tourist destination. Secondly, it is because many consumers still have negative images on the subject in their minds, that must be altered.
• An attractive and trustworthy place for business Key findings
Implications for Cyprus
Attracting investors and partners for tourism business deals is easy thanks to the good business climate on the island.
This is very positive, especially for investment. Cyprus should further capitalise on the international recognition it possesses in this regard.
• Outstanding weather conditions Key findings
Implications for Cyprus
This is a great comparative advantage, as Cyprus has the best climate in Europe all year-round. The weather may also further become a competitive advantage if Cyprus imaginatively develops this theme.
Good weather is still the second-most important criterion (after security) when it comes to choosing a tourist destination. Cyprus objectively benefits from the best climate in Europe throughout the entire year and could even become the Mediterranean Canary Islands if it plays its cards well.
• Extensive experience in tourism management Key findings
Implications for Cyprus
Cyprus has over 60 years of experience in tourism and is home to a large group of entrepreneurs, executives and middle managers who know the business in depth. This is one of the main assets upon which Cyprus can build an attractive future.
The tourism industry in Cyprus benefits from an important experience curve accumulated by hundreds of large and small tourism entrepreneurs. The country must make the most of this by supporting these companies/individuals in future developments that are aligned with the Strategy.
• Outbound operators in source markets and airlines interested in Cyprus Key findings
Implications for Cyprus
Both have expressed their interest in Cyprus as well as their commitment to foster the commercialisation of its tourism products as soon as the efforts to improve the destination brand and the air capacity are in place.
There is a lot of positive energy working in Cyprus’ favour in the source markets which should be taken advantage of. Improved air capacity and highly effective marketing will be key to exploiting this excellent opportunity.
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• Diversity of tourism resources and attractions Key findings
Implications for Cyprus
Cyprus doesn’t have any exceptional or unique tourist attractions. However, across its relatively small territory, there is a reasonable diversity of attractions and activities. These could be a foundation upon which to develop memorable experiences that could turn into a relevant competitive advantage.
A reasonably diverse range concentrated in a relatively small terrain can be converted into an advantage. By properly combining heritage, natural and beach resources, Cyprus should create an attractive value proposition for customers with greater “exploratory” motivations.
• Opportunities to reduce operational costs Key findings
Implications for Cyprus
Opportunities exist to reduce operational costs, most of which are based on intercompany cooperation formulas, allowing for several sector’s consolidated purchase initiatives.
The tourism industry in general and hotels in particular are faced with some operational costs that are high, reducing profits. Cyprus should put mechanisms and formulas in place (generally of a collaborative and/or cooperative nature) that will allow for reduced costs.
• Significant opportunities for targeting new markets / segments and improving the Customer Value Proposition Key findings
Implications for Cyprus
Research has shown that Cyprus has good opportunities to expand and diversify the supply of tourism services and activities. New tourist needs are emerging that must be met. Moreover, new and important segments are beginning to appear. Cyprus has opportunities in many of these.
This is one of the greatest opportunities that Cyprus can benefit from by developing products (for existing markets) and markets (for new products). That said, Cyprus should take appropriate measures in order to ensure that its entry into new types of tourism is done properly, profitably, and sustainably. This is a huge risk that must be avoided at all costs.
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3.2
23
External analysis: the business environment The elements which contribute, be it positively or negatively, to this evaluation are presented below. • Growth in demand Key findings This growth more or less affects all source markets, types of tourism and segments. In order to take advantage of this opportunity, Cyprus must make necessary marketing investments to conquer these new clients. Implications for Cyprus This should lead to an intensive use of digital marketing and the creation of a larger and more sophisticated network of collaborators in the major - well-chosen - source markets. • New, emerging tourist needs Key findings New clients want more experiences, more personalisation, more contact with the local culture and more healthy activities in their trips and they are willing to pay more for these needs to be met. Implications for Cyprus In order to make the most of these opportunities, Cyprus’ tourism businesses, as well as the Government, will have to evolve and innovate in order to adequately respond to these new needs. The Government will promote the creation of an attractive menu of memorable experiences, while at the same time supporting companies in developing signature experiences. Digital marketing should be used intelligently in order to customise holidays, which will require an increased usage of digital vacation planners and private apps specialising in facilitating this personalisation. Cyprus should also encourage the development of cultural expressions with a strong Cypriot personality (theatre, folklore, festivals, traditions, etc.) and facilitate these being accessed by tourists by way of providing abundant digital information on them. Wellness and other types of healthy activities will soon become a crucial “point of parity”. The development of a huge wellness centre in each so-called “destination” providing very local treatments and products based on Cyprus’ light and climate is an interesting option that should be seriously considered by the sector and the Government. Finally, there is a growing trend towards “Discovery” travel, that is growing at a faster rate than “Relax travel”. The opportunity for Cyprus comprises developing products such as the Grand Tour of Cyprus, which meet this new and growing need in a wholly satisfactory way.
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CYPRUS TOURISM STRATEGY
• Emergence of new segments Key findings This is another trend that presents huge opportunities. The fast growth in Millennials, seniors, free independent travellers (FITs) and affluent travellers, alongside the extremely rapid growth in Special Interest travel, niche meetings, etc. are some of the most prominent trends that Cyprus should use to its advantage. Implications for Cyprus For this purpose, the island must develop attractive value propositions for each of these new segments following the general guidelines provided below: Millennials. This will require extensively developing online trip planning and reservation platforms and comprehensively managing experiences in the destination. It will also be necessary to produce quality labels that will optimise decision-making etc. Seniors. Exploiting this opportunity requires developing value propositions based on familiarity, many activities, opportunities for socialisation and healthy food, complemented by light medical attention, etc. The Free Independent Travellers (FIT) will soon represent 20% of the total demand. They will need single (or double for single use) rooms and decent social activity proposals. The affluent travellers. Soon, almost 30% of the total demand will comprise affluent travellers. They want “premium” services and are an important target for Cyprus. In order to make the most of this opportunity, Cyprus must develop “premium” value proposals that include specific attributes and certain privileges, both in terms of the accommodation offer as well as excursions, shops, restaurants, experiences, etc. Special Interest Travel. Today, this includes over 300 special interest products, ranging from whale watching to shaman tours, visiting famous battlefields, bird watching, speleology, etc. Cyprus has interesting opportunities in this field. Once again, in order to exploit these, it should develop attractive value propositions which always require human teams and specialised DMCs. Governmental support will be key. Niche meetings. Original and exclusive places to hold memorable meetings are being sought out (although currently small) more and more, where the professional and experiential are combined. Cyprus has opportunities in this niche if it develops suitable value propositions.
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• The growing demand for experiences Key findings Almost 20 years after Pine and Gilmore published their celebrated book “The Experience Economy”, these have become an unstoppable trend worldwide in general and particularly in the world of tourism. People want to live through memorable, and preferably unique, experiences. Very recently, large companies such as Trip Advisor and Booking.com have included an option to be able seek experiences all over the world on their homepages and see customer reviews of these. Until that time, it was estimated that the number of tourists who begin their decision-making process by choosing the activity or experience they want to enjoy was almost at 30%. In a few years, this number will approach 60%. Implications for Cyprus Cyprus must take advantage of this opportunity developing a suitable menu of 3 types of experiences: top experiences, brand experiences and signature experiences. These allow the island to compensate for the lack of relevant “core assets • The emergence of the online universe Key findings A tourist destination without a competitive digital strategy will be off the market within 8-10 years. However, with a good digital strategy, destinations can benefit from previously unimaginable business opportunities. Implications for Cyprus In order to exploit these, Cyprus must start a “digital revolution” that will inspire demand, generate transactions across the entire sector, provide services to tourists before during and after their trips and create links between the island and its clients. All the above will be carried out by highly specialised teams, supervised from within Visit Cyprus and located both inside and outside Cyprus.
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SWOT analysis The SWOT analysis identifies the Cyprus tourism sector’s existing strengths and weaknesses, emerging opportunities, and the threats to be taken into consideration by the Strategy and, if possible, neutralised.
Value for stakeholders
Results for Cyprus
Table 3. SWOT elements to be considered by the Strategy Strengths
Weaknesses
Opportunities
Threats
Current positive financial performance
Current negative financial performance
Opportunities for revenue growth and productivity improvement
Threats to sustaining or improving financial performance
1. High seasonality 2. Weak sector performance
3. Opportunities for revenue growth
4. High market and product portfolio risk
Current weaknesses of Cyprus’ Customer Value Proposition (as perceived by consumers, markets and competitors)
Opportunities to expand the customer base, target new markets and improve the Customer Value Proposition
Threats to expanding the customer base, targeting new markets, and improving the Customer Value Proposition
9. Low experiential value of the offer 10. High level of visual pollution 11. Weaknesses in air capacity
12.
13. International trade and airline interest in Cyprus
Weaknesses in our internal processes and value chain
Opportunities for internal processes improvement
Threats posed by internal process weaknesses
16. Lack of a clear Strategy 17. Lack of strategic thinking, objectives and planning 18. Poor branding and marketing performance 19. Weak industry innovation, intelligence and technology support processes
20. Opportunities to reduce operational costs
21. Weak legal, regulatory and administrative system
Opportunities to develop culture, core competencies and capabilities to enable strategic priorities
Threats to developing culture, core competencies and capabilities to enable strategic priorities
Current strengths of Cyprus’ Customer Value Proposition (as perceived by consumers, markets and competitors)
5. Outstanding climatic conditions 6. Diversity of tourism assets 7. Safety, comfort, and convenience 8. Attractive and trustworthy place for business Strengths in our internal processes; where we excel
Strategic processes
3.3
CYPRUS TOURISM STRATEGY
15. Extensive experience in tourism management
Strengths in terms of people, culture, core competencies and strategic capabilities
Enablers
26
Weaknesses in terms of people, culture, core competencies and strategic capabilities
22. Weak governance, cooperation and management system 23. Lack of stakeholder trust and collaboration
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Significant opportunities for targeting new markets and improving the CVP
14. Decreasing net value of customer journey
24. Low commitment towards ‘wise tourism’ and criticism of the current tourism model 25. Deficiently managed Human Capital
CYPRUS TOURISM STRATEGY
Key Issues to be addressed by the Strategy and strategic question Based on the analyses already outlined, the key Issues for which the CTS provides guidance have been identified and each of them has been transformed into a Strategic Question.
Key Issues to be addressed
Strategic Questions
A. Results for Cyprus
• Growth •
Volume of demand
What volume of demand should we achieve by 2030?
•
Contribution to the GDP
How will tourism contribute to Cyprus’ GDP?
•
Investors and employment
•
The “Value Gap”
What volume of investment and employment should we achieve? What “Value Gap” will the Strategy implementation fill?
• Benefits for the Tourism Sector •
Competitiveness
How can Cyprus increase its competitiveness?
•
Product diversification
How can we diversify the tourism product?
•
Sustainability
How can Cyprus improve its sustainability?
•
Seasonality
How can we reduce seasonality?
•
Market risks
How can we lessen market risks?
• Value proposition
•
Stakeholders to serve
Which are the main stakeholders?
•
Value to be delivered
Which competitive advantage employ in each case?
•
Tourist segments and geomarkets
Which targets (both consumer and geographical) should Cyprus conquer?
B. Value for stakeholders
3.4
27
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Key Issue to be addressed
Strategic Questions
• The tourism experience
•
Tourism experiences
How can we develop a unique system of tourism experiences in Cyprus?
•
Service satisfaction
What can we do to improve service satisfaction?
•
Visual pollution
How can we dramatically reduce visual pollution in Cyprus?
C. Strategic processes
• Planning and development
•
Planning
•
Growth model
•
Innovation
How can we substantially improve the planning process? Which growth model should Cyprus follow for the next 15 years? Which new innovative products and services should we develop?
• Investment and collaborators
•
Investment
How can we attract relevant investors?
•
MSMEs
What can we do to promote new competitive micro and small companies?
•
Collaborators
How can we develop better links with collaborators?
• Marketing and seasonality
•
Brand
•
Conquering tourists
•
Seasonality
How can we develop a powerful tourism brand for Cyprus? How (and from where) can Cyprus conquer more and higher yielding tourists? How can we transform Cyprus into an ‘all year-round destination’?
• Benefits for the local society
•
Employment
How can we generate more jobs and benefits for Cypriots?
•
Social identity
What can we do to preserve social identity?
•
Vulnerable elements
How can elements?
we
protect
vulnerable
systematic
• Competitive Diamond for the Tourism Sector How can we help to improve the efficiency and • Profitability profitability of the sector? How can we substantially improve Cyprus’ legal and • Legal and regulatory framework regulatory framework?
D. Enablers
28
•
Human capital
How can Cyprus develop the right human capital?
•
Air capacity
How can Cyprus achieve its required air capacity?
• Governance and management framework
•
Governance
How can we create a highly efficient governance framework?
•
Management
How can we improve management of the system?
•
Performance
How can we monitor the sector’s performance?
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Part B ____________________________________________________________________________________________________
The Cyprus Tourism Strategy 2030 Milomeri waterfalls, Troodos
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CYPRUS TOURISM STRATEGY
In order to achieve a superior financial and social performance and add value for all stakeholders the Strategy is made up of two components: •
The Goal. The final result the Strategy is expected to achieve.
•
The “Core Strategy” that spells out the objectives we want to achieve by 2030, the main competitive advantage to develop, and the business scope of the Island as a tourism destination.
•
The “Strategy Directions”, indicating how each one of the identified Key Issues will be addressed in order to achieve the Vision Figure 9. The 3 components of the Strategy
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4.
31
The goal of the Strategy The value to be delivered to stakeholders To achieve the objectives of the Strategy it is essential to reach the right numbers and quality of tourists with the support of airlines and sales collaborators. This will require attracting significant investments to develop the adequate offering, developing numerous MSMEs. So, the success of the Cyprus Tourism Strategy depends largely on its ability to create value for all stakeholders involved: local population, investors, tourists, and collaborators. Table 4. Main goal: to deliver value to stakeholders Value for local society
Value for investors
Better quality of life
Attractive and easy-to-implement investment opportunities
No tourist destination can maintain longterm tourism prosperity without delivering value to its local population, who must clearly see the benefits that tourism brings them in terms of prosperity, well-being, reinforcement of local identity and confidence in the future. Improving the locals’ quality of life is one of the major goals of the strategy.
Without investment, there is no tourism development; without a good investment climate, there is no investment. Thus, the strategy must provide a high value for investors both for large projects and MSMEs. The value to be delivered to investors must consist in providing them with a good menu of investment opportunities, a seamless investment climate and simple, flexible, and transparent administrative regulations.
Value for tourists
Value for Collaborators
An exceptional tourism experience
Attractive business opportunities
Cyprus will only be able to acquire more and higher-quality tourists if it offers them an exceptional tourism experience complemented by warm hospitality, quality service, high security, and good levels of comfort. Both the “customer journey” and the “experience map” should be highly competitive. This requires investment, knowledge, technology, and human capital to deliver high value “gain creators”, “pain relievers” and products and services. The Strategy must contain specific Strategy Directions for this.
Cyprus must also offer attractive business opportunities to airlines, the travel trade, specialised media, added-value service providers, etc. in order to maintain and increase their interest in doing business and/or operating in Cyprus. Moreover, it is also important to provide them with local reliable support, good facilities, and easy access and transport within Cyprus. Promoting the proactivity of these collaborators with regards to Cyprus is another strategy goal.
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CYPRUS TOURISM STRATEGY
The Core Strategy The “Core Strategy” represents the essence of the Cyprus Tourism Strategy. It has the following components:
5.1
The objective of the Strategy: economic prosperity and employment The aim of the new tourism strategy is to create more wealth, attracting more investment, income, revenue, and jobs. Below we present the main objectives for 2030, based on the “Premium” strategy which is the one that is primarily recommended by the CTS. Important note: However, an equally “Premium” strategy, yet softer in terms of growth and development, is proposed later on (Part D. Implementing the Strategy) as an alternative option in case political, financial etc. reasons call for an even more qualitative and restrained growth. Table 5. More visitors, revenue, investment, and employment Main variables
2015
2030 Premium model
Variation
International Visitors (Mill.)
2,66
4,85(1)
82%
Tourism revenue (Mill. Euro)
2.391
6.815
185%
Total Tourism Employment
73.500
119.229
62%
Production (Mill. Euro) [Direct + Indirect]
4.380
12.482
185%
Tourism income / GDP
14%
28%
+14
Total investment (2016-2030) (Mill. Euro)
-
18.567
-
Wise tourism index
-
850/1000
-
(1) International visitors include day visitors
Source: CYSTAT 2015 and THR projections
5.2
The island’s competitive advantage The competitive advantage specifies what Cyprus must do better than or differently from its competitors. It is, in fact, the differentiating element that indicates which tourist needs Cyprus will satisfy better than its rivals. According to extensive research performed by THR, when it comes to making a decision on a tourist destination, tourists consider their perceptions of the following items, in order of priority: 1. Safety
2. Climate / light
3. Hospitality
4. Things to see / do
5. Comfort / service
Nowadays, the vast majority of Cyprus’ potential customers have no real perception on the 5 previous points when it comes to the island. When comparing Cyprus with Mallorca, the Costa del Sol, Sardinia, Malta, Crete, etc., the country is well placed in terms of “points of parity” but not when it comes to “points of differentiation”. However, one important aspect stands out: Climate/light. Cyprus has the best climate in Europe, throughout the year.
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After carefully analysing various different options, it is recommended that Cyprus develops a competitive advantage based on having the best climate in Europe accompanied by 3 complementary advantages which serve to reinforce the main competitive advantage. This will require a greater communication effort but will provide better results. Figure 10. The four elements of the competitive advantage of Cyprus Main competitive advantage
The best climate in Europe, all year-round “The best climate in Europe”
“All year-round”
A factor which directly relates to one of the basic requirements for tourism activity – great weather conditions – complemented by the fact that it is in EU territory.
A factor that brings substantial added value to the construction of the image of Cyprus as an all yearround destination.
3 competitive reinforcers Reinforcer 1
Reinforcer 2
A great menu of tourism experiences
8 special destination attributes
Offering the market an attractive system of tourism experiences, in which the Cypriot character and personality represent a differentiated, high added value. The 3 kinds of experiences to be developed: • Top experiences: An exclusive selection of once-in-a-lifetime travel experiences. • Brand experiences: Micro experiences that create a local flavour. • Signature experiences: A set of travel experiences managed by local companies.
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The country: • Member of the EU and Eurozone. • Modern and cosmopolitan with toplevel infrastructure. The destination’s 6 special features: • A very safe, family-friendly and hospitable country. • Enjoyable Mediterranean character and lifestyle. • Good accommodation facilities. • Convenience of being a small island with great diversity of attractive tourism activities. • The cleanest and hottest waters in the Mediterranean. • The highest number of Blue Flags per capita.
Reinforcer 3
Specific competitive advantages per each business model • Sun & Sea: Sea water quality and a country behind the beaches. • Itineraries & Culture: 101 things to see and do less than an hour away from the hotel. • Meetings: Attractive for small and medium size meetings with state-ofthe-art facilities and natural scenarios. • Cycling: Convenient size of the island and its weather. • Sport stages: Its great climatic conditions.
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5.3
CYPRUS TOURISM STRATEGY
Cyprus’ system of tourism experiences An increasingly sophisticated and demanding consumer is forcing destinations all over the word to move away from a focus on facilities and services and towards customised experiences. Cyprus needs to move from activities to memorable tourist experiences which tourists are willing to pay for. Cyprus needs to move from activities to memorable tourist experiences...
… which tourists are willing to pay for. 35,0%
35,0%
15,0% 5,0%
Not willing to pay more
5,0%
<15%
+15-40%
+40-50%
>50%
Source: Consumer research commissioned by THR, 2012.
The Cyprus Tourism Strategy proposes 3 kinds of experiences, as illustrated below: •
Top Experiences are to be promoted and developed by the Government if possible in PPP with private investors.
•
Brand experiences are to be promoted by the National Tourism Authority but executed by private companies.
•
Signature experiences are to be developed by private sector under the framework developed by the NTA.
Experience type
Description
Quantity
Top experiences are stateowned and managed, becoming the centrepiece of travel experiences in Cyprus and acting as a benchmark for private operators that wish to design experiences on a smaller scale. 5-7
Size
20
Experiences that are deeply rooted in local culture while being inherently personal. Their essence is engaging the senses and connecting travellers with places and people that deliver a taste of the local culture. +50
Experiences that are perceived by all those who visit the destination just for the mere fact of “being there”. They help visitors feel truly connected to the heart and soul of Cyprus.
Large/XLarge
Micro/Small
Medium/Small
Responsible
Public
Public Private
Private
Responsibilities
Development & Control
Promotion & tools
Invitation & Filtering
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A.
35
Top experiences
Ideas for Cypriot current activities or experiences that, with effort and creative re-design, could become Top Experiences, are described below: Island
The Grand Tour of Cyprus An opportunity to discover the true taste of the Island in 5-10 days with the highest quality services and customisation. Explore the beauty of Cyprus in an ideal way for road and off-road trips, offering fascinating landscapes, memorable natural and cultural experiences, hospitable people, and true authenticity. Ancient Kourion, take a trip to the past A calendar of open-air events all year-round, like classical music recitals, theatre performances; taking advantage of the unique amphitheatre setting, the pleasant weather and the history behind the walls. Furthermore, dramatised visits occur by day and night, depicting the lives of characters played by actors.
Immersion into the roots of Cyprusâ&#x20AC;&#x2122; wine and local cuisine Taste traditional Cypriot Mediterranean flavours. Be a part of the way traditional Cypriot food is sourced and prepared according to the season. Stroll through the numerous local vineyards, and witness first-hand the production of Cypriot wine.
Encounter ancient Cypriot culture in charming villages Visit the unspoilt hinterlands, a collection of fascinating villages stepped in timeless tradition. Embody the life of a Cypriot, in all its simplicity and harshness. Become a local for the day and fall in love with genuine traditions, habits, and local homemade meals.
Innovative pools and themed beaches A unique and exceptional pool accompanied by a menu of beaches, each with a different theme (e.g. Hawaiian beach, Mediterranean beach, familyoriented, adults-only, etc.). These themed beaches differ in terms of the vegetation, the food and beverage items on the menu, the uniforms of the personnel, the decoration of the surroundings, etc.
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CYPRUS TOURISM STRATEGY
B.
Brand experiences
These are some ideas for brand experiences that should be set up at hotels, restaurants, airports, museums, tourist information centres and other places frequented by tourists: A traditional cup of Cypriot coffee Cyprus coffee is quite unique and represents a characteristic part of the island’s coffee culture. Hotels could offer Cypriot coffee to guests upon arrival, as well as at certain museums, tourist attractions or places where visitors may encounter locals in a relaxed atmosphere.
Mezze, culinary experience These bite-size dishes are a great way to get into the local cuisine of Cyprus. Mezze includes stuffed vine leaves and local cheeses such as feta, halloumi and kaskavalli. Restaurants and hotel bars must upgrade and modernise what they currently offer before they can offer Mezze as an authentic local tasting experience. Made in Cyprus shopping experience Making sure tourists return home with the most genuine souvenirs of Cyprus. Inside the ‘Made in Cyprus’ shops, tourists will find a wide assortment of lace-work from Lefkara, colourful homespun linen articles, painted gourds, silverware, pottery, intricate crochet, etc.
C.
Signature experiences
The Signature experiences programme is created by the Government, which sets and coordinates the framework for individual operators to register upon completion of the affiliation criteria. Therefore, these experiences are designed, operated, and delivered by private partners (DMCs, experience operators, etc.) under the conditions defined in the programme. Businesses wishing to be included in this programme must comply with the standards to be endorsed. Figure 11. Cyprus’ Signature Experience Process
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Traditional Signature Experiences (suggestions) •
Thrilling nature parks. Take the chance to come closer to the natural beauty of Cyprus in some of the 10 parks that have been accredited as National Forest Parks.
•
Admire turtles nesting and hatching at the protected area of Lara beach. Enjoy one of the Mediterranean’s last breeding grounds for turtles.
•
Diving for the underwater treasures in Zenobia. Perfectly warm sea temperatures combined with a range of marine life, sea caves, reefs, and ship wrecks.
•
Walking around the Holy Monastery of the Virgin of Kykkos. Return to the 11th century, contemplating the beautiful paintings and the monument dedicated to Virgin Mary.
•
The Hammam steam bathing ritual. Combine the benefits of the hammam with peeling and massage treatments.
•
Horse-riding at sunset in Pafos. A wildly unique experience with a wide range of ponies and horses ready to take you on a beautiful sunset ride.
•
Spend a memorable day surrounded by camels. Ride camels with the family around an amazing park in Larnaca.
Innovative Signature Experiences (suggestions) •
Cyprus from the sky. A stunning scenic flight over the island by hot air balloon, helicopter, or a light aircraft.
•
Cyprus’ coastline on-board. Spend a day or a few discovering the 350 kms of Cypriot coastline on a sailing vessel, houseboat, or motor yacht. Be your own captain or hire professional crew.
•
Bike camping at Troodos packages. Guided biking trails that take riding adventures to a whole new level. Spend the night at your own tent and be ready to start again as soon as the sun rises. Bike and tent rentals, meals, baggage transfer and shuttle will be provided.
•
Stargazing, experience the darkest night skies. A 'hands-on' guided astronomy experience rural hillside location at Pafos. Get inspired with facts about neighbouring stars, galaxies, star clusters, and planets while using a range of scientific telescopes to view through.
•
Fishing with fishermen.
•
Visiting craft workshops affiliated with the “Made in Cyprus” programme.
•
Visiting fish auctions.
•
Participating in workshops related to lace-work, silverware, pottery, intricate crochet, etc.
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5.4
CYPRUS TOURISM STRATEGY
The business scope The business scope proposed by the CTS is made up of three elements: the products/segments portfolio, the source markets portfolio, and the Premium Destination Strategy.
a. The product/segment portfolio CTS proposes to develop an attractive portfolio of products other than Sun & Sea with the aim of diversifying its product offer, attracting a higher yielding customer, and alleviating the seasonality issue.
Figure 12. Product prioritisation matrix
The new portfolio has been elaborated by assessing the attractiveness of each product, as well as its strategic fit as indicated below. As a result, two priorities are determined. Priority A Cyprus should embark on the following market segments as first priority: Sun & Sea, Itineraries & Culture, Meetings, Amateur â&#x20AC;&#x201C; Pro Sports and Cycling. Priority B The next tier of products is: Short breaks, 4th Generation resort, Wellness, Sailing and Yachting, High-end homes, Nature, Golf, and Weddings.
Table 6. Criteria used to evaluate product attractiveness and strategic fit Strategic fit Strategic benefits Alignment with Vision & Goals
Ease of development Intellectual and human capital needed
Market positioning
Existing infrastructure
Contribution to sustainability Impact on seasonality reduction
Investment requirements Ability to leverage core assets
Product attractiveness General attract Market size Economic value creation Historic growth
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Porterâ&#x20AC;&#x2122;s 5 forces Threat of new entrants Threat of substitutes Bargaining power of buyers Bargaining power of suppliers Rivalry among competitors
CYPRUS TOURISM STRATEGY
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b. Source markets in which to focus efforts to conquer customers Considering that marketing resources are limited, it is crucial to target source markets in which Cyprus presents good value in relation to an attractiveness/competitiveness ratio.
Figure 13. Source market prioritisation matrix
The approach used to assess the geomarkets combines both attractiveness and Cyprus’ competitiveness separately into one. Again, two priorities are established: Priority A UK, Russia, Germany, Nordic, France, Switzerland, Israel, and Ukraine. Priority B Belgium, The Netherlands, Poland, Ireland, Austria, Lebanon, and UAE/Qatar. Table 7. Criteria used to assess source market attractiveness and Cyprus’ competitiveness Competitive strength Cyprus’ position in the market
Current demand for Cyprus
Cyprus’ competitiveness Forecasted growth of arrivals to Cyprus Flight connections Motivational fit
Source market attractiveness Market size
Performance Forecasted growth of arrivals to Europe
Outbound departures to Europe
Economic value creation Seasonality reduction
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c. The Premium Destination Strategy (PDS) Four types of tourist in terms of average daily expenditure Not every international tourist spends the same amount of money when travelling. Not even the same individual has the same daily expenditure every time he/she travels. From a daily per capita AVERAGE expenditure perspective, tourist can be grouped into 4 types: Table 8. Types of tourists in terms of average daily per capita expenditure Type of tourist Budget tourist World average tourist Affluent tourist
Average daily expenditure Average – 35% Average Average + 30/50%
Luxury tourist
Average + 100/150%
i.e. Backpackers Majority of big TO´s clients Those using “Premium” products and services Those using “high end” products and services
Four types of destination based on its client “mix” On the other hand, tourist destinations receive four types of clients, but in different proportions. While in “Low-Cost” and “Standard” destinations, the share of “Affluent” and “Luxury” customers are less than 30%, in “Premium” and “High-end” destinations this proportion ranges between 40% and 90% as illustrated in the table below. Table 9. Destination positioning strategies in terms of client mix Destination types
% of affluent and luxury tourists
Low-cost destination Standard destination
10 30
Premium destination
40-60
High-end destination
50-80
Tunisia, Bulgaria, Greece Cyprus, Turkey Malta, Balearic Islands, Fiji, Croatia Dubai, Austria
Prioritising yield versus volume Based on the research and analyses conducted, a Premium Destination Strategy for Cyprus is recommended for the future. That means aiming at a lower growth in the volume of tourists but targeting a larger proportion of high-spending segments that will multiply the contribution per tourist to the Cyprus economy.
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CYPRUS TOURISM STRATEGY
Figure 15. Projected Tourism Arrivals 2030 under different positioning strategies Millions
Figure 14.Evolution of the Positioning Strategy
41
8
7,240
7
6,214
6
5,700
5 4 3 2 1 0 Standard destination Pleasure
Business
Premium destination VFR
High-end destination
Day Visitors
Domestic
Source: THR projections
Cyprus to become a â&#x20AC;&#x153;Premium Destinationâ&#x20AC;? All things considered, and as per the results obtained from the economic simulation platform that has been developed for Cyprus, the Premium Destination Strategy offers the most appropriate combination of net positive elements in the long term. Therefore, we highly recommended Cyprus to implements this strategy. See below the difference in economic impacts. Table 10. Economic impact projections for the 3 positioning strategies by 2030 Standard destination
Premium destination
High-end destination
7.2
6.2
5.7
6.335
7.133
7.737
Total Tourism Jobs
112.779
119.229
126.966
Production (Mill. Euro)
11.086
12.482
13.540
Income (Mill. Euro)
6.053
6.815
7.393
24,87%
28,00%
30,38%
Main variables Tourists (Millions) Tourism Expenditure - (Million Euro)
Income / GDP
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6.
CYPRUS TOURISM STRATEGY
Twenty-Two Strategy Directions and Objectives This component of the strategy establishes which directions to follow in order to address each of the Key Issues (a kind of “vision” for each Key Issue). The Strategy Directions have been chosen from a vast range of options, in such a way that each strategy is, by definition, something unique. Here is where the creative component of the strategy elaboration process attains its full value. The Strategy Directions give answer to the Strategic Questions and lead to the 22 objectives grouped into the 7 Strategy Outcomes, as presented below.
6.1
The drivers: Five outcomes and 15 Strategy Directions Outcome 1.
Deliver an exceptional tourist experience
Issue 1.1 Tourism Experiences How can we increase Cyprus’ experiential value?
1.2 Service satisfaction How can we increase customer satisfaction?
1.3 Visual Pollution How can we eliminate visual pollution?
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Strategy Directions Statement
Strategic Objective
All over Cyprus we will “wow” our guests with a range of unique and authentic natural and cultural experiences. The public sector will lead this development of a new experience culture, applying highly creative methods and smart management, generating happy visitors and profitable businesses.
A. Develop a high value system of experiences in Cyprus
With the help of an attractive labelling system we will increase and guarantee selected quality standards and characteristics, guide tourists, and help to manage expectations. We will constantly monitor and manage customer satisfaction across the different labelled destinations, products, and services.
B. Significantly improve the value along the customer journey
All stakeholders will make maximum efforts to enhance and protect the visual aesthetic of Cyprus. We will remove unnecessary and/or degraded signage and advertising panels, protect urban spaces from unregulated development and pollution, and reflect our cultural heritage in our planning and building design.
C. Dramatically reduce visual pollution in the destination
CYPRUS TOURISM STRATEGY
Outcome 2.
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Excel in planning and development
Issue
Strategy Directions Statement It will be ensured at all times, that spatial planning and development will be aligned with the strategy. We will translate the integrated development plan into concrete and attractive investment and business opportunities, ensuring healthy, competitive, and complementary development of our different resorts in all designated tourism development regions.
2.1 Tourism planning How can the we substantially improve the planning process?
Strategic Objective D. Implement excellent tourism development master planning
. 2.2 Growth Model Which growth model should Cyprus follow?
2.3 Product diversification How can we diversify the product portfolio?
Outcome 3.
We will keep growing in a healthy and dynamic way, maintaining a pre-defined balance between mass, affluent and luxury tourism. The speed and volume of investments in new and existing superstructure, planned in a realistic and sustainable way, will be subject to constant monitoring and smart growth adjustments.
E. Define and manage clear growth models for all regions
We will manage outstanding overall tourist experiences for different target segments thanks to a diversified portfolio of innovative quality products and services. New product types and developments will follow a clearly planned strategic portfolio approach.
F. Increase product diversification and innovation
Attract the right amount of vetted investors and MSMEs
3.1 Investment How can Cyprus attract the required investment?
3.2 MSMEs What must be done to promote new competitive MSMEs? 3.3 Market partners How can Cyprus establish stronger market partnerships?
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Through a highly proactive tourism investment promotion approach we will attract more strategic investors from both inside and outside Cyprus. We will provide attractive investment schemes, clearly defined opportunities, strong local partners and excellent support services in collaboration with CIPA.
G. Attract necessary vetted investors
Our industry capability building efforts will be especially strong for MSMEs. We will support the improved competitiveness of existing MSMEs and keep stimulating the creation of successful tourism start-ups through technical on- and offline support, events, services, and schemes.
H. Ensure competitive MSMEs grow in Cyprus
Thanks to well-planned strategic win-win partnerships with trade and promotion companies, we will be able to reach, attract and retain the right volume and type of partners and customers as targeted. The mix of partners will help to balance the projected demand between the strategic regions, products, and seasons.
I. Increase the quantity and quality of market partners
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Outcome 4.
Conquer more and better yielding customers
Issue
Strategy Directions Statement
4.1 Brand How can we develop a powerful tourism Brand for Cyprus?
4.2 Conquering tourists How can Cyprus attract more tourists?
How can we reduce seasonality?
Outcome 5.
Both public and private sector marketing will be based on the strong brand weâ&#x20AC;&#x2122;ll create and manage with utmost care, generating awareness, differentiation, and relevance in our target segments. Markets will understand our competitive advantage and the safety of Cyprus as key elements, letting us achieve a clearly differentiated and attractive market positioning.
J. Develop a powerful tourism brand
We will market Cyprus in a strategically focused way, attracting and satisfying the desired volumes and type of tourists as envisioned by the strategy. With the help of marketing planning, we will continuously stimulate demand in our target markets in a highly effective and efficient manner.
K. Conquer more higher yielding tourists
When deciding on markets and products we will focus on a much better spread of business and employee incomes across all 12 months of the year. Both tour operator driven and individual travel will contribute to this, especially via a very well balanced mix of tourism product types for shoulder and winter seasons.
4.3 Seasonality
Strategic Objective
L. Reduce seasonality
Benefiting the local society and the environment
5.1 Sustainability How can we encourage the sector to adopt principles of sustainable tourism?
5.2 Ecologic impact How can we reduce the ecologic impact of tourism? 5.3 Spread the benefits of tourism How can we spread the benefits of tourism among Cypriots, promoting their well-being?
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Through a monitoring tool perfectly adapted to the tourism reality and the major sustainability challenges of Cyprus we will be able to monitor and improve the sustainability of tourism in our country in terms of all of its ecological, social, and cultural impacts.
Our industry players will clearly understand the impact of the tourism sector on the environment and especially climate change, and will take pride in continuously reducing their environmental impact. Cyprus will be known and respected among both trade and tourists for its consequently environment-friendly tourism sector.
Thanks to a dynamisation of authentic Cypriot products and customs and their professionally managed development into attractive products and experiences, we will not only contribute to strengthening the cultural identity of Cypriots but also create attractive business models, entrepreneurial opportunities, and jobs for the local population.
M. Design and manage a tool to assess tourism sustainability N. Reduce carbon footprint of tourism activity in Cyprus O. Enhance vulnerable economic activities and protect cultural identity
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6.2
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The enablers: Two outcomes and Seven Strategy Directions Outcome 6.
Develop a positive Competitiveness Diamond for the tourism sector
Issue 6.1 Sector profitability How can we increase the sectorâ&#x20AC;&#x2122;s productivity?
6.2 Legal and regulatory framework How can we substantially improve the legal and regulatory framework? 6.3 Human Capital How can we empower human capital for the new tourism system?
6.4 Airlines How can Cyprus secure sufficient airline capacity?
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Strategy Directions Statement Through a balanced diversification of products and markets, year-round tourism, and increased value creation, Cypriot tourism businesses will have the basis to operate profitably. MSMEs especially will be well supported regarding technology, innovation, processes and creation of synergies in order to optimise their operational cost and business competitiveness.
Strategic Objective
P. Promote productivity improvement tools
We will continue to revise and reform tourism relevant legislation and regulations, supporting the everimproving competitiveness of the sector. Processes will be simplified and made more transparent, helping authorities to perform more efficiently and investors and businesses to significantly increase flexibility and speedto-market.
Q. Reengineer legal and regulatory framework
We will effectively support the industry in their efforts to constantly educate and train executives and staff, especially with new inputs like experiential tourism and new methods like micro-training, etc. This approach will be aligned with college and university tourism programmes, benefitting from internationalisation, practical industry collaboration, and e-learning.
R. Educate and train the right people
. In alignment with the core strategy, we will identify and attract the right airline partners in our strategic markets. We will convince them to provide the necessary routes and capacities with the help of the new all year-round strategy, incentive schemes, trade, and marketing alliances, lobbying, and improved service levels.
S. Develop air capacity
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Outcome 7.
Implement a smart governance and management framework and culture Strategy Directions Statement
Issue 7.1 Governance
How can Cyprus develop a smart system of governance?
7.2 Tourism system management How can we develop an efficient management framework? 7.3 Monitoring system performance How can we monitor the performance system and competitors?
A dedicated minister or deputy minister will lead the strategic sector development. Implementation will be driven by a capable, efficient, and motivated tourism authority in close collaboration with the private sector. There will be a dedicated team ensuring tourism development in Cyprus follows the National Strategy at all times, also thanks to effective collaboration between the different ministries that are involved.
T. Establish a sound system of modern governance
CTO will be transformed into a dynamic sector development facilitator. It will manage the Strategyâ&#x20AC;&#x2122;s Balanced Scorecard (BSC) system, key policies, and processes in a highly efficient way, stimulate publicprivate collaboration and support a transparent strategy communication, step by step regaining trust and credibility in the private sector.
U. Implement an efficient management framework
We will cultivate a common understanding that the performance of the sector can only be as good as that of the implementation of the strategy. We will make use of the BSC system and complementary monitoring activities in order to closely watch the achievement of the defined KPIs and foster an intelligence-based decision-making culture in both the public and private sectors.
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Strategic Objective
V. Launch a state-of-theart monitoring system
Part C ________________________________________________________________________
Action Plan
Sanctuary of Apollo Ylatis â&#x20AC;&#x201C; Limassol
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7.
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The Action Plan Each Key Issue that must be addressed in order to achieve the Vision 2030 has led to Strategy Directions that indicate how they should be approached. This, alongside the Core Strategy, is the Strategy. Now is the time to convert the Strategy into a Plan, establishing objectives, measures, KPIs and initiatives that should be used as a guide for effectively implementing the Strategy. For this purpose we have used the principles of the Balanced Score Card. The Strategy Map (7.1). The figure below illustrates the Strategy Map which provides us with a general overview of the Strategy, demonstrating the Goal to achieve, the Strategy’s objectives, the value to generate for stakeholders and the 22 strategic objectives to accomplish, organised into 7 outcomes or themes. The Balanced Score Card (7.2). Each objective is subsequently transformed into measures, KPIs and initiatives so that the Strategy can be implemented and monitored correctly.
A Strategy Map with 7 outcomes and 22 objectives The Cyprus’ Strategy Map arranges the Objectives into 7 outcomes, each of which is designed to produce an output relevant to achieving the Strategy goal. Table 11. Cyprus’ Tourism Strategy Map
Value for stakeholders
Results for Cyprus (2030)
Become, before 2030, an all year-round sustainable destination receiving 4,8m intl. tourists - 40% of whom during Nov-Apr International tourists (M.) 4,8
Tourism Revenue (M. €) 7.000
Strategic Processes DRIVERS
GDP Contribution 28%
New tourism keys to develop 29.000
PARTNERS Attractive business opportunities
CUSTOMERS An exceptional tourism experience 1.
2.
Total new Employment 45.000
Investment required (public & private) (M. €) 18.500
INVESTORS Attractive investment environment & opportunities 3.
Attract the right amount of vetted investors and MSMEs
Wise tourism index 850/1000
SOCIETY Better quality of life and sustainability
4.
Conquer more better yielding customers
5.
Deliver an exceptional tourism experience
Excel in planning and development
A. Dev elop a system of high v alue experiences in Cyprus
D. Implement excellent tourism dev elopment master planning
G. Attract necessary v etted investors
J. Dev elop a powerful tourism brand
M. Design and manage a tool to assess tourism sustainability
B. Significantly improve the v alue along the customer journey
E. Define and manage clear growth models for all regions
H. Ensure competitive MSMEs grow in Cyprus
K. Conquer more higher yielding tourists
N. Reduce carbon footprint of tourism activ ity in Cyprus
C. Dramatically reduce visual pollution in the destination
F. Increase product div ersification and innov ation
I. Increase the quantity and quality of market partners
L. Reduce seasonality
O. Enhance vulnerable economic activ ities and protect cultural identity
6.
Develop a highly competitive diamond for the tourism sector
ENABLERS
Learn and growth
7.1
P. Promote productiv ity improvement tools Q. Reengineer legal and regulatory framework R. Educate and train the right people
S. Dev elop air capacity
7.
Implement a governance & management framework and culture
T. Establish a sound system of modern gov ernance U. Implement an efficient management framework V. Launch a state-of-the-art monitoring system
Source: THR based on “The Execution Premium”, Kaplan & Norton
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Benefiting the local society and the environment
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7.2
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A Balanced Scorecard with 22 objectives, measures, targets, and initiatives The Cyprus Balanced Scorecard (BSC) contains 22 objectives, their measures (KPI’s) and targets, as well as the initiatives proposed to achieve them. Strategic Objective
Strategy map figure
The Outcome
Refers to a concise statement describing the specific things a destination must do-well in order to execute its strategy.
Indicates the outcome which we are referring to. It works as a browser within the strategic map.
Highlights the outcome that groups together the related objectives. In Cyprus’ Strategy Map the objectives are grouped into 7 outcomes, 5 drivers and 2 enablers.
Outcome 1. Deliver a world-class tourism experience
Strategic objective
Measure
Target
Initiatives and work streams 1 “Experience Cyprus” Program
A. Develop a high-value system of experiences
Number of • 2018: 2 brand experiences experiences developed • 2019: 3 top and 10 signature experiences
A strategic long term program guided by the public sector dedicated to design, manage, and marketing of authentic and memorable experiences. 2 Cyprus quality labels
B. Improve the value of tourism services in Cyprus
% of tourism • 2018: 15% services and • 2019: 20% companies • 2020: 30% labelled
A system of labels for specific type of sites and services that comply a series of certain characteristics, creativity, and quality criteria. 3 Visual pollution initiative
C. Carefully reduce visual pollution in the destination
“Black spots” removed
Measures and Targets The key performance measures (KPIs) are the means to measure success in achieving the objectives. Meanwhile, the targets establish the level of performance expected for each KPI. Updated version 23.03.2017
• 2018: 10 • 2019: 15 • 2020: 20
A vision of a cleaner and aesthetic Cyprus encompassing 4 different aspects: outdoor signage & advertising, pollution, land use & protection, architecture.
Initiatives Indicates the actions or group of actions that constitute what will be done to achieve the objective.
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Outcome 1. Deliver an exceptional tourism experience Strategic objective A. Develop a system of high value experiences in Cyprus
Measure
Number of experiences developed/ year
Target
• •
2018: 2 brand experiences 2019: 3 top and 10 signature experiences
% of tourism services and companies labelled/ year
• • •
2018: 15% 2019: 20% 2020: 30%
A powerful system of labels for specific types of sites and services that comply with a series of certain characteristics, creativity, and quality criteria. 3 Run a visual pollution initiative
C. Dramatically reduce visual pollution in the destination
1 Set up the “Experience Cyprus” program A strategic long term programme guided by the public sector dedicated to design, manage, and market unique, authentic, and memorable Cypriot experiences. 2 Introduce the Cyprus Quality Label system
B. Significantly improve the value along the customer journey
Initiatives
“Black spots” removed /year
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• • •
2018: 10 2019: 15 2020: 20
A programme for a cleaner, more aesthetic, and authentic Cyprus encompassing aspects like outdoor signage and advertising, pollution, land use and protection, architecture.
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Actions needed to deliver an exceptional tourism experience 1 Set up the “Experience Cyprus” programme
2 Introduce the Cyprus Quality Label system
3 Run a visual pollution initiative
The current experiential level offered in Cyprus is very low. Consequently, the resulting value generated for both tourists and local businesses is deficient and the differentiation of Cyprus within the marketplace weak.
The role of the public sector with regards to quality control is currently seen as a business barrier rather than a business facilitator, and is a deterrent to build a quality and innovation culture in the sector.
Visual pollution is extremely high in Cyprus, not only in almost all tourist areas but also along roadsides and in villages tourists drive through when visiting many of the most popular tourist attractions on the island.
“Experience Cyprus” is a strategic long-term programme initiated and guided by the public sector, with the purpose of creating, managing and marketing unique, authentic, and memorable Cypriot experiences.
A team of label specialists should be appointed and trained in order to establish a system of labels for a specific type of destinations, attractions, and services. An international benchmark of tourism labelling will inform the design of a proprietary system for Cyprus.
A vision of a cleaner, more authentic, and aesthetic Cyprus will be developed, encompassing 4 different categories: outdoor signage & advertising, pollution, land use & protection, and architecture. A dedicated team within the ministry will review, enforce, and improve respective laws, regulations, and processes.
This initiative will require to: Install the Cyprus Experience Agency. A newly created external entity responsible for creating, investing, finding operators, and marketing a whole new system of tourism experiences, with the support of the NTA’s Tourism Experience department. Start the Top Experience programme. Focus on developing and implementing minimum 3 Top experiences. Launch the Signature Experiences programme. Creation and coordination of this private sector experiences program, as well as managing the affiliation process. Promote Brand Experiences. Launch a system of small yet memorable “typical of Cyprus” experiences and ensure they are performed in a standardised, authentic, and unique way wherever tourists go in Cyprus. Initiate experience marketing and communication system. Continuously promote the experiences to both end users and local entrepreneurs.
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This initiative will require to: Set up the Cyprus Quality Labels Management Unit. Define the organisation, functions, roles, and budget of the Unit and enable staff with the help of international labelling experts. Develop the Cyprus Quality Labels system. Define a limited number of concepts for destinations, attractions, and services, the criteria, and standards. Deploy the CQL system. Create an e-platform, train the advisors, and conduct the initial assessment. Market and promote the CQL system in Cyprus and the markets. Communication should target local label candidates, tourists, and the travel trade. Implement a strong monitoring and enforcement system. This must include mystery visits, regular customer surveys and the Customer Net Promoter Score Index. Setting up annual Quality Excellence Awards will support recognition of those who join the system and will be a source of news and media coverage.
This initiative will require to: “Dark spot” elimination programme. The most critical spots and elements all across Cyprus will be detected, documented, and prioritised according to the urgency and importance of an aesthetic makeover. A system of financial and other incentives and measures will ensure the implementation of the initiative. “Care for Cyprus” education programme. This involves education and activities in schools, colleges, universities, and communities in order to activate and generate strong commitment of the local population. Enhance the built environment. This programme will foster the use of traditional Cypriot architectural elements in new and existing buildings
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Outcome 2. Excel in planning and development Strategic objective D. Implement excellent tourism development master planning
Measure
Target
4 Implement the National Tourism Planning initiative Number of Tourism Development Master Plans elaborated/ year
• •
2017: 6 areas 2018: +6 areas
Growth models • developed/ • year
2017: National + 6 areas 2018: +6 areas
Based on an intelligence and performance monitoring system a dedicated Centralised Tourism Planning Unit (CTPU) will take care of adjusting the speed and form of planning implementation to a set of external and internal criteria. 6 Install Product Development Unit
F. Increase product diversification and innovation
A highly capable central planning unit will be set up within the NTA’s Integrated Planning Department to perform a smart high level national and regional planning based on the strategy. 5 Steer Cyprus Tourism Growth model
E. Define and manage clear growth models for all regions
Initiatives
Number of product types strategically launched
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• • • •
2017: 3 2018: 6 2019: 9 2020: 12 (numbers accumulated)
Set up the unit within the NTA that will foster the expansion of the strategic product/segment portfolio in the next 4 years, mainly by the private sector, by professionally (re-) launching the key tourism products/segments prioritised in the Strategy.
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Actions needed to excel in planning and development 4 Implement the National Tourism Planning Initiative Historic development in Cyprus has resulted in excessive linear coastal building activities and a fairly homogenous product. Little attention has been paid to opportunities in rural areas. Meanwhile, the real estate sector has, to a large degree, been operating autonomously, failing to plan, and build the right quantity and quality of second homes. A newly installed Centralised Tourism Planning Unit will change this, setting up and managing well-planned tourism development all over the country. In addition, it will establish the basis for attracting and activating the right mix of investors. This initiative will require to: Establish a Centralised Tourism Planning Unit (CTPU). This organisation will be responsible for planning and monitoring Cyprusâ&#x20AC;&#x2122; tourism development, advising the government, and supporting relevant industry stakeholders accordingly. Launch Regional Tourism Development Master Plans. The regional plans will establish a concrete framework for tourism development and the value creating operation of identified tourist areas. Review and redraft the Legal and Regulatory Framework. The existing laws and regulations relating to planning, development, and sustainability shall be reviewed to bring them up to date as per the needs of tourism and related sectors. Establish a Land Acquisition Strategy. To secure enough and non-speculative land is available for priority projects.
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5 Steer Cyprus Tourism Growth modelling Tourism in Cyprus has been left largely uncontrolled for a number of years. Tourism investors have been making their own decisions on when, where and with what product to establish or expand tourism businesses. This has resulted in a lack of developments targeting new markets and segments. A specialised unit within the CTPU will ensure future developments are aligned with market dynamics and trends and target segment needs and wants. It will also advise and support on the speed of growth, adapting to market realities and developments. This initiative will require to: Establish a Development Intelligence department at CTPU. This department will be responsible for monitoring tourism development growth on one hand and market behaviour on the other. It will provide the necessary intelligence allowing CTPU and private stakeholders to grow intelligently. Start an online Development Intelligence Centre. The department will set up and manage a central intelligence platform stakeholders can consult for market data, tourist surveys and observation, and development statistics and information. Monitor and steer development processes. The department will provide accurate information and develop recommendations regarding speed, type, and volume of growth. CTPU will use this information in order to enforce an optimal and flexible steering of developments.
6 Install Product Development Unit Tourism in Cyprus is still highly dependent on the classic Sun & Beach model and the problematic consequences of its overreliance are many. Special interest tourism has good potential thanks to the diversity of the tourism assets and outstanding climatic conditions, but it is far from being well-developed and the current activities in the field of Special Interest tourism are not the result of strategic planning and efforts. We recommend establishing a dedicated unit of experts within the Ministry, which will focus on the development of a more diverse product portfolio in alignment with the tourism strategy. Over the coming years new strategic product types will be launched and their business models developed and implemented. This initiative will require to: Create Product Development Unit within National Tourism Authority. A newly formed and established team will centrally lead the strategic product portfolio/segment development. Elaborate strategic product portfolio development plan. The new tourism types cannot be implemented all at once, a 5 year-plan is suggested. Start first 3 new product/ segments developments in 2017. Starting three tourism product types per year is feasible and allows for concentrated planning and development at the same time, in order to create credible and attractive references of success cases, inspiring the private sector to follow the new product strategy.
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Outcome 3. Attract the right amount of vetted investors and MSMEs Strategic objective G. Attract necessary vetted investors
Measure
Target
7 Establish Tourinvest Cyprus unit within CIPA • Share of investment needs covered at least two years in advance (starting from 2018)
80%
Number of new MSMEs /year using the Program
• • •
2018: 20 enterprises 2019: 30 enterprises 2020: 40 enterprises
A user-friendly industry support platform and programme where MSMEs and start-ups make use of a rich collection of practical technical support content, trainings, events, and services leveraging Cyprus’ MSME competitiveness. 9 Start Market partnering initiative
I. Increase the quantity and quality of market partners
A highly skilled new tourism unit within CIPA will translate the investment opportunities defined by CTPU into concrete and detailed prospects and professionally attract and support investors. 8 Launch MSME support program
H. Ensure competitive MSMEs grow in Cyprus
Initiatives
Number of new agreements signed/ year
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• • •
2018: 10 2019: 15 2020: 30
Negotiate partnership agreements with highly attractive and strategically targeted trade and airline partners aimed at fostering growth in key source markets and product types.
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Actions needed to attract the right amount of vetted investors and MSMEs 7 Establish Tourinvest Cyprus unit within CIPA Considering the high complexity of the tourism sector and the legal and administrative challenges for tourism investors, a specialised unit is needed. New international investors must be identified and contacted as new products and destinations are being developed following the new tourism strategy. Tourinvest Cyprus will be a dedicated CIPA unit prepared to handle the necessary high number, diversity, and volumes of tourism investment opportunities coming from the strategy. Its highly skilled experts will attract, inform, and pragmatically support investors to overcome legal, regulatory, and other hurdles. This initiative will require to: Activate the “Tourinvest Cyprus” unit within CIPA. It will be responsible for fostering, capturing, and supporting investment through user-friendly procedures and high level technical advice. Build trust among Cypriot and international investors. The unit will have a proactive ‘can-do’ approach and will provide data, host investor briefings and manage an updated portfolio of projects. Develop an attractive portfolio of investment opportunities. Excellent investment dossiers will be prepared for each project in order to generate interest and facilitate investment decisions. Streamline investment procedures in Cyprus. Tourinvest will set-up efficient procedures with minimum bureaucracy barriers and rigid regulations with the aim of facilitating the decision to invest in Cyprus.
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8 Launch an MSME support programme
9 Start Market partnering initiative
The new strategic focus on experiential tourism and Special Interest markets requires a competent and innovative MSME “landscape”. Currently, companies in Cyprus are unfamiliar with the new tourism types, changing quality approaches (labels) and are not empowered enough to master the required shift to innovative services and experiences. A much-needed entrepreneurship support system is not in place.
There is currently no strategic approach to guide and prioritise, commercial channels, media, and other partners in each source market. Although CTO is already working together with a series of tour operators with positive results, the marketing alliances often suffer from complex and bureaucratic approval processes and sometimes of a lack of understanding regarding the latest digital marketing mechanisms.
Launching an MSME support programme is essential for the successful implementation of the Cyprus Tourism Strategy, stimulating innovation and providing high quality and authentic tourism experiences, products, and services. At the heart of the MSME programme will be an online platform where tourism and related enterprises can find well-structured, highly pragmatic content helping them to become more competitive and successful in what they do.
In the future, market partners will be approached proactively, following the geo-markets and product types prioritised in the new strategy. A central unit in Nicosia and the abroad offices in their new role as business development agencies- will prepare, negotiate, and manage a highly effective network of win-win marketing partnerships.
This initiative will require to: Create an MSME support service. The National Tourism Authority will launch a support service to prepare and assist MSMEs so they can get information and take advantage of business opportunities resulting from the new strategy. Develop a special start-up and entrepreneurship programme. The National Tourism Authority will strongly encourage, guide, and support successful tourism entrepreneurship, especially among women and youth, a core of new tourism start-up culture in Cyprus.
This initiative will require to: Activate new central market Partnering team within National Tourism Authority. A dedicated team will proactively identify partners and negotiate agreements. Activate the NTA offices abroad. In addition to their marketing functions, they will provide support to attract investors. Approach strategic partners. Reaching out to strategic partners will follow a structured process based on understanding and addressing each target partner’s needs, wants and potential contributions to tourism in Cyprus in a professional way.
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Outcome 4. Conquer more and better yielding customers Strategic objective
Measure
Target
10 Build a new brand management system
J. Develop a powerful tourism brand
Bi-annual Brand Power measurement
•
Yearly increase of 2 to10% (depending of the source market) for the next five years
Increase of short- to midterm purchase intention per market and year
•
+1% to 5% per year depending on the market
A first 3-year marketing plan developed by the public sector will be launched, supported by the new offices abroad and the increased marketing competence and activity of the private sector. 12 Manage seasonality reduction initiative
L. Reduce seasonality
Development of a powerful tourism brand to improve the destination brand equity among targeted consumers and trade partners in the strategic source markets. 11 Implement a world-class marketing plan
K. Conquer more higher yielding tourists
Initiatives
Share of tourism arrivals generated in month NovApr
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• • •
2020: 28% 2025: 34% 2030: 40%
Implementation of new value proposals and supporting communication plans specifically designed for both shoulder and winter seasons.
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Actions needed to conquer more and better yielding customers 10 Build a new brand management system The absence of a strong and differentiated destination brand is an issue that negatively impacts the effectiveness of Cyprus’ marketing. The destination is not understood within markets - people know it’s a tourist destination, but they aren’t aware of the tourist offer and the high level of safety and infrastructure the country offers. The overarching objective is to increase the brand power of Cyprus as a tourist destination by 2-10% yearly in the main markets through the implementation of a powerful, differentiated brand strategy. A new brand visual will help to increase awareness, esteem, differentiation, and consumer relevance in the key markets year by year. This initiative will require to: Implement the branding system. A proposal of Cyprus’ brand identity and positioning was submitted with this strategy. The new brand needs to be agreed upon with stakeholders, then implemented, together with the final brand architecture. Align the new tourism brand visual with the Strategy. Commission their creation to an international or reputed national branding agency and ensure a total alignment with the strategy. Perform an integrated 360º brand communication system. Hire a communication agency to produce the ‘Big Idea’ and execute a special media program, targeted advertising, and co-op branding actions. Monitor the brand implementation and its performance. Control the activities and practices to detect any deviations and perform a yearly brand audit in strategic target markets.
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11 Implement a worldclass marketing plan The level of awareness and destination understanding and the current value proposition of Cyprus as a tourist destination is still rather low in the targeted strategic source markets. The current marketing mix is slightly outdated and lacks effectiveness, especially in the field of digital marketing. This initiative focuses on the implementation of a strategybased Operational Marketing Plan using best practices and tools to significantly influence the targeted audiences and attract more tourists from the strategic geo-markets and segments towards Cyprus. This initiative will require to: Carry out an Operational Marketing Plan. The implementation includes launching a Media Relations Special Programme with the support of a global firm and the NTA Offices abroad, deploying a new digital marketing strategy and supporting the industry with new co-op marketing approaches. Support the tourism industry. Build marketing expertise among tourism MSMEs across the island, providing knowhow, tools, methods, bestpractice examples, and relevant market intelligence. Fostering networking activities to build a strong collaborative culture. Restructure the NTA offices abroad. The NTA offices abroad will have six important responsibilities: marketing planning and operations, business and air capacity development, support to the Cypriot tourism industry, generate market intelligence and identify co-marketing and investment opportunities.
12 Manage seasonality reduction initiative Over the past few years, the majority of the tourist arrivals to Cyprus were recorded during the 4 summer months, with peaks in July and August while many national destinations almost had to “close down” in the low season. This initiative aims to attract more tourism arrivals during the Pre and Post Season (PPS), as well as in the winter season, by adapting and expanding Cyprus’ value proposition and offering. This initiative will require to: Create a PPS Product Club and a PPS label system. The PPS label system will benefit the industry with a better organisation and presentation of the PPS offer, as well as improved commercialisation. Develop attractive products for the PPS. Differentiate and enhance the tourism product portfolio for the off-season, and create specific top quality PPS experiences. Develop a specific PPS communication strategy. Transmit the PPS value propositions through a specific PPS website, efficient PPS online campaigns and Media relation actions in priority source markets. Develop and implement a specific PPS sales system. Work closely with the travel trade and airline companies through collaboration agreements, while preparing a specific PPS web booking platform. Prepare and implement the Winter Season strategy. Test the adapted actions for winter season in a selected cluster and execute and rollout plan for the rest of clusters with “winter potential” as identified.
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Outcome 5. Benefiting the local society and the environment Strategic objective
Measure
Target
13 Elaborate the Wise Tourism Index
M. Design and manage a tool to assess tourism sustainability
Performance score on tourism sustainability
• • • • •
Year 1: 600/1000 Year 2: 700/1000 Year 3: 750/1000 Year 4: 800/1000 Year 5: 850/1000
Number of companies adhered to the initiative
• • • • •
Year 1: 20 Year 2: 50 Year 3: 100 Year 4: 150 Year 5: 200
Activities to educate and motivate tourism enterprises to continuously reduce the emission of greenhouse gases, and take pride in and advantage of becoming a more and more sustainable destination. 15 Launch “Made in Cyprus” and “Soul of Cyprus” initiatives
O. Enhance vulnerable economic activities and protect cultural identity
An expert task force of public, private and NGO experts defining and applying a relevant and pragmatic index used to continuously measure and improve the environmental, cultural, and social sustainability of tourism in Cyprus. 14 Foster carbon footprint reduction
N. Reduce carbon footprint of tourism activity in Cyprus
Initiatives
Number of local companies joining the program
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• • • • •
Year 1: 10 Year 2: 30 Year 3: 50 Year 4: 80 Year 5: 100
Increase the production and sale of authentic local quality products to tourists and the tourism industry, and promote fascinating Cypriot cultural experiences and events.
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Actions needed to benefit the local society and the environment 13 Elaborate the Wise Tourism Index
14 Foster carbon footprint reduction
To ensure the sustainability of the tourism activity in Cyprus, there is a need to dedicate efforts aimed at creating a strong culture of sustainability in the island.
According to studies, tourism is responsible for 5 to 12% of global CO2 emissions. This results from the energy used up by tourism activities, which mainly comes from fossil fuels.
It is recommended to set up a Wise Tourism Index that will serve as a tool to recognise and reward tourism players that have adopted ecologically, socially, and culturally sustainable practices in Cyprus.
Given the importance of tourism for Cyprus’ economy and considering the effect that CO2 has on the environment, and particularly on climate change, national tourism authorities shall establish clear and conclusive guidelines that contribute to minimising the carbon footprint generated by the tourism activity. Moreover, they shall communicate the benefits of travelling to a sustainable destination.
This initiative will require to: Define Cyprus’ Wise Tourism Index. The methodology to estimate the index will be adjusted based on internationally recognised and consolidated sustainability monitoring systems. Measure and publish the Wise Tourism Index results. The Wise Tourism Index will be measured by a team of trained evaluators and supervised by a team of international experts. Once measured, Wise Tourism Index results will be broadly disseminated (industry stakeholders, source markets, media and the public at large). Provide technical support for local authorities for continuous sustainability improvement. National Tourism Authority with the cooperation of the Ministry of Agriculture, Rural Development and Environment will provide technical assistance for local authorities in order to obtain better wise tourism index results year after year.
This initiative will require to: Implement a programme assessing and calculating the carbon footprint of Cyprus’ tourism businesses to reduce and/or compensate the emissions. Kickstart an educational programme on reducing carbon footprint – aimed at tourism professionals so they can manage carbon footprint reduction plans. Launch a practical carbon footprint reduction manual. Develop and distribute best practices and pragmatic recommendations on the matter. Support the tourism sector (public and private) in executing carbon reduction plans through specialised technical assistance. Implement a “Carbon Footprint Friendly Company” programme, endorsing companies committed to reducing their carbon footprint and help them to communicate the benefits of travelling to Cyprus as a sustainable destination.
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15 Launch “Made in Cyprus” and “Soul of Cyprus” initiatives Cyprus’ current tourism development model doesn’t generate sufficient wealth for local communities while safeguarding their culture. This initiative aims to help locals increase their tourism income and preserve their cultural identities at the same time. Under proprietary brands, authentic local products will find a platform as will truly Cypriot cultural expressions in different forms: theatre, musical events, films, etc. responding to both traditions and modernity of Cyprus. This initiative will require to: Launch the “Made in Cyprus” certification (MiC). Sustainable local products meeting a defined set of criteria will be certified and form part of the MiC manufacturer’s association. Sell MiC products to the tourism industry. The association will focus on managing the product portfolio and selling to Cypriot tourism companies. Sell MiC products to tourists. Tourists can buy MiC products online, at the airport and other hotspots. Promote 20 MiC shops. NTA will select investors for 20 MiC shops all over Cyprus. Develop the SoC concept and its inventory. Providers of authentic Cypriot cultural experiences and events will form the SoC association. Communicate and promote the SoC. Listed events and experiences will be sold via the new marketing platform of Visit Cyprus. Provide technical assistance. The NTA will assist local authorities to help tourism companies implement the MiC and SoC programmes.
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Outcome 6. Develop a highly competitive diamond for the tourism sector Strategic objective
Measure
Target
16 Create the Competitiveness Unit inside the NTA
P. Promote productivity improvement tools
% of relevant companies and bodies improving in productivity/ year
• • •
2018: 10% 2019: 15% 2020: 30%
Average length of selected legal, regulatory, and administrative key processes
•
Reduction of process lengths at least 70% on average before 2020
Industry satisfaction of the initiated program
• • •
2017: 60% 2018: 70% 2019: 80%
Overhauling the existing formal tourism education and training system incorporating innovation, hitech, and internationalisation in the continuous professional development on all levels. 19 Run airline partnership initiative
S. Develop air capacity
Elaboration of a new comprehensive tourism law, simplified and strategically oriented regulations and transparent and fast administrative systems, facilitating sector growth and competitiveness. 18 Start human capital initiative
R. Educate and train the right people
A new unit focused on sector competitiveness will develop a programme aimed at improving the productivity of the tourism industry in Cyprus. 17 Reengineer the legal and regulatory framework
Q. Reengineer legal and regulatory framework
Initiatives
Increase of air capacity per strategic market and year
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•
+5% to 10% according to each strategic market/year
A dedicated new unit will work closely with Hermes Airports preparing credible growth scenarios and concrete proposals for winning airline partners in strategic catchment areas, supported by DCA and private sector partners.
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Actions needed to develop a highly competitive diamond for the tourism sector 16 Create the Competitiveness Unit inside the NTA
The Cyprus tourism industry’s financial results are poor due to the country’s low competitiveness as a tourist destination. Innovative technologies and management approaches are largely absent, market and business intelligence use not widely spread and strategic partnerships seldom. A Competitiveness Unit will be created within the National Tourism Authority to promote the use of “best practices”, new technologies and innovation amongst all of Cyprus’ tourism businesses, as well as arranging symbiotic partnerships with both domestic and international companies. This initiative will require to: Install the Tourism Competitiveness Unit. Determine the organisation of the department, as well as its functions, roles, processes, and work procedures. There will dedicated teams for technology and innovation, MIS, HCD, Legal, Partnerships, etc. Organise the annual Tourism Competitiveness Forum. An annual meeting, bringing together all of Cyprus’ tourism industry stakeholders to exchange ideas, know-how and technologies, stimulate collaboration and innovation. Directly support the use of best practices, new technologies, innovation, and partnerships. Promoting the use of these through 3 tools: research, executive education, and advisory services.
17 Reengineer the legal and regulatory framework
18 Start human capital initiative
This initiative aims to reengineer the legal and regulatory framework that regulates the entire tourism sector dramatically.
To substantially improve its competitiveness, Cyprus should change its current paradigm to respond to the needs of more horizontal education and training, as well as solve the foreign labour problem. It should make educational efforts to focus on the right people that show the appropriate attitude and specially the new professions necessary to support the strategy.
This initiative will require to:
This initiative will require to:
Elaboration of the Cyprus Tourism Law. Providing a competitive environment for tourism enterprises, and regulating the relationship of service providers and consumers.
Implement the “Cyprus Leadership Executive Education” programme. Deliver high-quality education alongside specialised activities in strategic sub-sectors.
Simplification of the current regulatory framework. Speed-up the work already done by the specialised entity.
Launch an executive education programme at the NTA. Provide NTA officials with a programme so as to effectively guide the entire Strategy implementation.
Cyprus’ current legal and regulatory framework is very uncompetitive: excessive regulations, little transparency, a large diversity of stakeholders, slow processes, etc.
Create a Public Electronic Platform for legal matters. This will contribute to building a business-friendly legal framework, to stimulate investment and support a more competitive industry. Create a One-Stop Shop/ fast track for administrative processes. Transparent and secure environment for investors, simplifying and accelerating legal procedures. Facilitate regularisation of the unlicensed accommodation offer. Law changes to encourage homeowners to register with the National Tourism Authority.
Upgrade the existing tourism education and training system. Adapt programmes to address the full spectrum of tourism professions following the CTS. Create a Tourism Overseas Scholarship Programme. Set up in partnership with top international universities. Operate an innovative online learning platform. With the best international standards, as well as guidelines to train employees. Additionally, a Tourijobs platform will be created with job vacancies of the sector. Training & educating foreign tourism labour. So, they can quickly gain specific skills, attitudes, and values. Create the Cyprus Culinary Centre. Gastronomy will become an indispensable tool to fascinate visitors of the Cypriot culture and lifestyle.
19 Run airline partnership initiative There is a clear issue with flights in almost all interesting potential markets, both inside and outside Europe, except for the British and Russian markets. This initiative is all about creating business and consequently tourist demand, working closely with Hermes Airports and in coordinated efforts with the Market Partnering Unit, the DCA and private sector stakeholders. This initiative will require to: Activate Air Traffic Development Unit and a Tourism Connectivity Committee (TCC). A small unit will work closely with Hermes Airports to develop strategic and tactic business/air traffic approaches in collaboration with the DCA aligned with the market strategy of the CTS.
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Prepare demand opportunities. In collaboration with selected tour operators, air capacity demand scenarios are elaborated for strategic markets. Potential airline partners will be analysed in order to prepare convincing win(airlines)win(trade)-win (Cyprus’ tourism sector) proposals.
Execute the airline partnership programme. Special packages and deals will be negotiated and promoted in selected catchment areas, if with high probability of longterm success even with heavy subsidies/other means of support.
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Outcome 7. Implement smart governance and tourism management framework Strategic objective T. Establish a sound system of modern governance
U. Implement an efficient management framework
Measure
Target
20 Install a new governance system Relevant dimensions and agreements made by year
• • • •
2017: 2 2018: 3 2019: 4 2020: 4
The future governance system will be based on a new National Tourism Authority, a strong private sector counterpart, a dynamic Inter- Ministerial Committee, and the Office of the Strategy Manager. 21 Transform tourism system management
Deviation of Balanced Scorecard KPIs from targets
• • • •
2017: < 20% 2018: < 10% 2019: < 7% 2020: < 7%
A new structure responsible for dynamically managing and implementing CTS policies and programs in fruitful collaboration with the private sector in the key areas of competitiveness, marketing, and sustainability. 22 Launch performance monitor
V. Launch a state-of-the-art monitoring system
Initiatives
Share of KPIs measured at the planned points of time
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• • • •
2017: 70% 2018: 80% 2019: 90% 2020: 100%
A central monitoring system will be launched to provide relevant quantitative and qualitative information and intelligence in a user-friendly way, ensuring both public and private sector decisionmaking is based on sound knowledge.
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Actions needed to implement smart governance and tourism management framework 20 Install a new governance system The implementation of the CTS is a complex process that requires strong, continuous leadership. Despite positive political stability overall and the commitment shown by the Government, the current governance system is weak and ineffective, due to a lack of a clear and strategic leadership. A new governance framework including private sector stakeholders will provide this missing leadership in the future. It will effectively stimulate, guide, and monitor a successful implementation of the Cyprus Tourism Strategy through improved cooperation, complicity, and shared key decisions. This initiative will require to: Constitute the Governance framework. The implementation of Cyprus Tourism Strategy requires the creation of four key institutions: the Inter-Ministerial Committee for Tourism, the National Alliance for Tourism, the Office of the Strategy Manager and The National Tourism Authority (NTA). Execute a governance programme. The matters that the programme must include are: the legal/judicial framework to develop tourism activities, tourism development planning and spatial planning, sustainable usage of Cyprus’ natural and cultural resources, tourism enterprise competitiveness, the perceived benefits for the local society, etc. Launch the Office of the Strategy Manager (OSM). Reporting directly to the President’s Office, the OSM will be responsible for supervising all activities related to the CTS from its formulation to its execution.
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21 Transform tourism system management
22 Launch performance monitor
Historically, the public body responsible for managing tourism in the country has been the CTO. However, an excessively bureaucratic administrative approach has taken over. This has led to a lack of time and resources needed to address important challenges that lie ahead, in terms of competitiveness, planning, quality, marketing, industry support, etc.
There is currently no comprehensive system used to monitor Cyprus’ tourism performance as a tourist destination. Data on variables and indicators and resulting market and business intelligence that are relevant to assessing the country’s performance are available, elaborated, and used only to an insufficient degree.
A new National Tourism Authority will have to be formed, capable of supporting the implementation of the tourism strategy and the tourism system as a whole. It will regain the trust of private sector stakeholders through new systems of collaboration and participation.
A comprehensive system of relevant data, information and intelligence needs will be defined, gathered, and published in a structured and pragmatic way. With the help of an intelligence platform, both public and private sector stakeholders will learn to appreciate basing future decisions on extremely useful and applicable intelligence.
This initiative will require to: Set up the new National Tourism Authority. This new body’s main task is to lead the tourism system management of Cyprus. It will focus on managing the sector well rather than using excessive bureaucratic, administrative tasks with little added value. Involve key stakeholders in Tourism System Management. Although the NTA is the main component of the tourism system management, it will also involve relevant public and private stakeholders in the system using participatory tools and methods. Launch the new Tourism System Management. The TSM will have a programme of actions to implement in the short, medium, and long-term. This programme will be proposed by the NTA and be based on crucial matters agreed upon by key bodies in the Governance System, following the CTS.
This initiative will require to: Determine sector’s performance metrics. The monitoring system must feature an approach which measures the sector’s performance in markets and destinations, but also relevant data and information related to industry and consumers in the source markets and to competitor destinations, for example. Launch a tourism intelligence platform. The Tourism Intelligence Platform should monitor Cyprus’ performance as a tourist destination, combining advanced statistical analytics, high-speed processing of large amounts of tourism data, and easyto-use query and reporting tools. It is more intelligence than data focused, serving both public and private sector stakeholders and extremely user-friendly.
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8.
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Six Separate Action Plans These plans have been developed in order to go into further depth on six matters of particular importance that, despite already being considered by the Strategy, require special attention. These six plans and a brief description of their content is demonstrated below. Each Plan includes: its objective and priorities, the actions required for its execution, recommended measures to accompany said actions and the stakeholders that will be involved in its implementation. Table 12. The Six Separate Action Plans Plan 1. Cyprus Brand
Objective: Review the current brand, developing a new brand concept, and increasing the brand power by 2-10% per year (depending on the source market).
Plan 2. Products /Segments
Objective: Establish a process successfully develop select group products/segments.
Plan 3. Priority Source Markets
to a of
Objective: Implement strategies and types of marketing actions that must be implemented in order to generate tourist traffic towards Cyprus from each selected source market.
Plan 4. Seasonality Reduction
Plan 5. Improvement of the Quality
Plan 6. Integrated Spatial Tourism Development for major Tourism Areas
Objective: Attract more tourist arrivals during the pre and post season, as well as the winter season.
Objective: Launch a world-class system of quality labels. Tourists will have an easily accessible informative system on the quality offered by Cyprusâ&#x20AC;&#x2122; different providers.
Objective: Guide a tourism development master planning effort for the 20172030 period that can be easily implemented.
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Separate Action Plan 1. Cyprus Brand Issue to tackle and objective to achieved Issue Research has clearly proven that the current Cyprus Destination brand is very weak, dramatically reducing the island’s capacity to exploit its market potential. Objective To develop a new brand concept and outline the ways of increasing the brand power by 2-10% per year depending on the source market.
Setting priorities to build a powerful tourism brand for Cyprus The brand elements to build a powerful tourism brand for Cyprus have been identified. The following brand identity prism describes what the destination stands for and how it wants to be perceived by consumers. With that in mind, the positioning proposed for Cyprus can be summarised as follows:
Figure 16. Cyprus’ Brand Identity Prism
“To the lovers of unforgettable holidays and journeys, Cyprus offers a unique set of premium experiences and services for Relax, Discovery and Enjoyment. With the best weather in Europe all year round, Cyprus is convenient and friendly, and its positive energy will make you enjoy the time of your life. All this is possible due to the magical Source: Proposal for Cyprus based on the radiance of tour unique light, the Identity Prism Model exceptional quality of our crystal clear waters, the richness of our cultural and natural attractions, and the expertise gained in over 60 years spent making people happy.” For Cyprus to develop a powerful tourism brand, we need to make sure that: • • • •
The brand concept, positioning and integration are the adequate. The brand visual is aligned with the concept and positioning. The communication of the brand is highly effective. The entire branding process is well monitored and managed.
Actions needed to build a powerful brand • The brand concept, positioning and integration are the adequate. To achieve this, we need to do the following: 1. Achieve a general agreement on the CTS proposal for brand promise, attributes, and personality.
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2. Approve a tourism brand architecture encompassing other product and regional brands and labels. • The brand visual is aligned with the concept and positioning. To achieve this, we need to do the following: 3. Commission the design of the new brand visual. 4. Test the proposals of brand visuals and get the official approval. 5. Commission and implement ‘Big idea’ for Cyprus. It will be the “umbrella” message throughout the 360º brand communication system. The communication of the brand is highly effective.
•
To achieve this, we need to do the following: 6. Implement a strong launching of the new brand. 7. Ensure proper use of the brand on the official and private marketing supports both online and offline. 8. Organise specific programs to introduce the new brand to the media and commercial channels in the source markets. 9. Launch online campaigns introducing the new brand to potential tourists and to travel professionals. The entire branding process is well monitored and managed.
•
To achieve this, we need to do the following: 10. Appoint a Tourism Brand Manager position within the new National Tourism Authority. 11. Activate a ‘National Brand Committee’ with public and private sector members. 12. Periodically audit Cyprus’ brand performance (surveys among visitors and in source markets).
Related measures to accompany the previous actions To achieve the previous, we need to complete the following accompanying measures: • Ensure to contract the best professionals and creative minds to assist Cyprus in delivering a brand with which Cypriots can feel identified and which will attract tourists. •
Ensure high level government support for the new brand.
•
Fully brief the staff of the offices abroad about the new brand.
Stakeholders involved in this Plan The National Tourism Authority, the ‘Tourism Brand Committee’, the tourism industry, regional tourism offices, offices abroad, local media.
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Separate Action Plan 2. Products/Segments Issue to tackle and objective to achieved Issue The Sun & Beach product currently is generating by far the largest part of arrivals and income from tourism in Cyprus. This brings along various significant challenges for industry and society: the heavy focus of the tourism economy along the coastline, high seasonality, dependency of large tour operators and their business models, low margin business prevalence, etc. Objective To establish a powerful system for the development / improvement of the main products of the new strategic portfolio, namely:
• • •
Sun & Sea Itineraries and Culture Meetings
• •
Cycling Sport stages
The long-term potential in terms of tourist arrivals and revenue for each segment has been estimated based on primary market research and secondary sources: Table 13. Objectives per product/segment
Sun & Sea Itineraries & Culture Meeting & Events Cycling Sports Stages
Arrivals Revenues (mil. EUR) Arrivals Revenues (mil. EUR) Arrivals Revenues (tho. EUR) Arrivals Revenues (mil. EUR) Arrivals Revenues (tho. EUR)
2020 2.397.724 2.170,2 260.511 264,4 33.967 30,4 23.536 23,1 53.000 83.345
2025 2.917.198 3.000,0 400.829 462,3 57.238 48,4 47.340 52,8 85.358 152.474
2030 3.691.186 4.235,9 616.725 793,8 75.939 69,7 72.939 90,8 108.941 217.210
Setting priorities for product development For Cyprus to succeed in developing/improving the strategic segments we need to make sure that: • Target users have been clearly identified per product. • The government and partners are capable of designing and managing an attractive customer value proposition for each segment. Activities that are critical to delivering an attractive CVP are properly performed, both within the government as well as in the private sector. The necessary financial, human, and other resources and key partners are made available.
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• •
Other specific complementary measures, e.g. legal, infrastructure, etc., are taken in order to create viable business models. Efficient and very well targeted marketing communication is established.
Actions needed for a successful product development In order for these five priorities to be achieved, a variety of different actions must be carried out from the fields of value creation, regulations, infrastructure, training, marketing, etc.
Table 14. The 7 types of action that we will mostly use for the product development Action 1. Market research performed by Visit Cyprus in order to better understand the potential, preferences and KSFs of each segment.
2. Support in developing innovative value propositions that attract more tourists and differentiate Cyprus from its competitors. 3. Executive training for products and services that make up the CVP of each segment are used to their fullest potential. 4. Actions aimed at integrating the right partners in order to guarantee all critical activities are successfully implemented. 5. Continuous supervision of customer satisfaction for each of the 6 priority segments.
6. Marketing efforts to advertise the Cypriot tourism offer and make its products more popular than those of the competitors. 7. Legal, infrastructural etc., actions to complement the above.
Examples • Researching the most attractive products and services in order to include them in the CVP of the Grand Tour of Cyprus. • Focus groups with managers of sports clubs to identify new opportunities in this segment. • Developing “Themed Beaches”. • Implementing “Cyprus Quality Labels”.
• Executive education on key success factors in experience management.
• Establishing the ‘Grand Tour of Cyprus Partners’, agreements with meeting planners in source markets. • Performing a bi-annual Passenger Exit Survey to measure client satisfaction. • Implementing an instant service satisfaction system via smartphone. • Setting up a specific microsite for each segment linked to the main tourism portal. • 3 branded videos on bicycle touring. • Conditioning 200 kilometres of tracks for bicycle touring.
Stakeholders involved in this Plan Special efforts are needed from the Ministry and the Inter-Ministerial Committee, the National Tourism Authority, the National Tourism Planning Unit, Invest Cyprus, the Cyprus Quality Labels unit, the Cyprus Experience Agency, local authorities, private stakeholders, and the local tourism industry.
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Separate Action Plan 3. Priority Source Markets Issues to tackle and objectives to achieve Issue At the time being, Cyprus relies on a highly risky geo-market portfolio as the majority of tourists in the past years came from two markets only, namely UK and Russia. In addition to the high portfolio risk, both markets are clearly Sun & Beach dominated and do not provide for the right market basis for a healthy product diversification and seasonality reduction. Objective The objective of this separate action plan is to recommend strategies and types of marketing actions that must be implemented in order to generate the targeted tourist traffic towards Cyprus from each selected source market. The source markets in which Cyprus must compete were identified previously within Core Strategy and Business Scoped. See list of Priority A, B, and C markets below. The selection has taken into account the opportunities and obstacles that were identified during our market research, the established objectives in terms of visitors and revenue, and recommended marketing actions to achieve those objectives, alongside budgets, partners and deadlines needed to do so. Table 15. Cyprus source market prioritisation Priority A • • • • • • • •
UK Russia Germany Nordic France Switzerland Israel Ukraine
• • • • • • •
Priority B Belgium Netherlands Poland Ireland Lebanon Austria UAE/Qatar
• • • • • •
Italy China India Greece Jordan USA
Priority C • Bulgaria • Belarus • Hungary • Lithuania • Romania • Japan
Actions needed to generate tourist traffic towards Cyprus All of this constitutes a new model for the planning, execution and management of Cyprus’ tourism marketing. This must then be converted into a National Marketing Plan, produced by the new Visit Cyprus, as quickly as possible. This new model revolves around 10 key actions: • • • • • • • • •
Centralise all marketing efforts within “Visit Cyprus”. Prioritise the source markets. A new role for Tourist Offices Abroad. A huge shift towards online and screen marketing. From traditional advertising to centralised Media Relations. Using a Cyprus-specific “Marketing Toolbox”. Marketing support for the private sector. Co-financing. Cooperative new generation marketing. The use of performance indicators.
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Related measures to accompany the previous actions The CTS’ new marketing tools The majority of the net marketing budget will be absorbed by the following: • • • •
Market research and intelligence. Labels and endorsements. Media relations. Digital marketing and branded content.
• • •
Customer Relationship Management. Marketing support for the local industry. Using marketing metrics.
Active presence and financial effort strategy: priorities In order to develop this strategy, it has been assumed an annual marketing investment budget (overheads aside) of 30 million euros, of which 25 million will come from Visit Cyprus and 5 million from private sector contributions in the form of hard and soft money. The presence strategy is the result of combining 3 elements, namely: • • •
The technical priority of the relevant market according to the portfolio. The need for business development and/or penetration. The need for greater air capacity.
Table 16. Marketing “toolbox” components for Cyprus source markets 1.
Media relations programme (incl. building media network).
11.
Winter season campaigns.
2.
Content generation (in source market language).
12.
Collateral materials (brochures, copy and images for operators, etc.).
3.
Press trips and blog trips.
13.
Provide links to wholesalers’ websites.
4.
Co-op campaigns (with travel brands and non-travel brands.)
14.
Co-op marketing campaigns with travel trade and airlines.
5.
Targeted online advertising campaigns.
15.
Trade shows and tourism fairs.
6.
Social media own profiles management (in source market language).
16.
Channel marketing (special packages, exclusive promotions).
7.
Website/Apps (in market language).
17.
‘Buy & Sell’ Cyprus events and workshops (between the trade with the industry).
8.
Mobile marketing.
18.
Customer relationship marketing.
9.
Email marketing.
19.
Country presentations/events.
10.
Pre and Post Season special campaigns.
20.
Industry support and seminars).
source
special
(webinars
Stakeholders involved in this Plan To be successful we need additional efforts from: The NTA, Offices abroad, new central Market Partnering unit, new Air Traffic Development unit, new Product Development unit, private sector networks in Cyprus and abroad, etc.
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Separate Action Plan 4. Seasonality Reduction Issue to tackle and objective to achieve Issue Due to the current overreliance on the classic Sun & Beach tourism model, Cyprus generates the majority of visitors and income during the summer months. On the one hand this leads to overcrowding and overuse of resources in summer, on the other hand to closed destinations, businesses and unemployment during winter and shoulder months. Objective Attract more tourist arrivals during the pre and post season, as well as winter season. The share of tourism arrivals generated in Nov-Apr should be 40% in 2030. However, reducing tourism seasonality does not equate to immediately becoming an all year-round destination. The latter requires working in two phases - first, extending Cyprus’ peak season into the Pre- and Post- months (May - Jun, Sep- Oct). Then, focusing efforts on increasing demand during the Winter Season (Nov-Apr).
Setting priorities to reduce seasonality For Cyprus to successfully balance the tourism activity across the year, we need to make sure that: •
Ensure that the PPS offering is better structured, organised and presented.
•
Cyprus’ value proposition and offering is expanded to include the Pre and Post Season(PPS).
•
Efficiently communicate the PPS offering to the target markets.
•
Air capacity and distribution by the travel trade is stimulated in PPS and Winter.
•
A strategy for the winter season is well-prepared so as to be implemented .
Actions needed to reduce Cyprus’ seasonality • Ensure that the PPS offering is better structured, organised and presented. To achieve this, we need to do the following: 1. Constitute a PPS Club, composed of stakeholders that want to become fundamental part of the PPS offerings.
2. Initiate a PPS label system for a better structure, organisation and presentation of the tourist offer and a better destination commercialisation for the PPS months. • Cyprus’ value proposition and offering is expanded to include the Pre and Post Season(PPS) To achieve this, we need to do the following: 3. Diversify the portfolio with Special Interest Tourism and other products/segments with PPS potential.
4. Offer a specific system of PPS experiences, some of those with the potential to work all-year round. 5. Support the organisation of high impact events attracting tourists with different interests and motivations to Cyprus during PPS.
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• Efficiently communicate the PPS offering to the target markets. To achieve this, we need to do the following: 6. Communicate PPS advantages through PR and targeted advertising and with well-designed and consistent conceptual messages.
7. Launch an outstanding website for the PPS offering that will be public-privately managed following an innovative, interactive and user-friendly design. • Air capacity and distribution by the travel trade is stimulated in PPS and Winter. To achieve this, we need to do the following: 8. Keep a “push” attitude towards the travel trade and airlines closing collaboration agreements with selected potential partners for PPS.
9. Set up an online PPS sales system. A platform that enables Cyprus’ tourism suppliers to offer attractive PPS proposals to end – customers. 10. Organise training sessions and informative workshops to support the local industry in better commercializing the PPS products. • A strategy for the winter season is well-prepared so as to be implemented. To achieve this, we need to do the following: 11. Prepare and test the Winter Season strategy in one of the identified clusters following the same guidelines explained on this plan for the PPS.
12. Implement the tested Winter Season strategy for the rest of the clusters with potential.
Related measures to accompany the previous actions To achieve the previous, we need to complete the following accompanying measures: • Perform workshops with key industry stakeholders to train them on the PPS project and its implications for the sales system. • Carry out specific training sessions for Buy & Sell Cyprus PPS to have higher ratios when closing agreements with international distributors. • Closely collaborate with the new central Market Partnering and Air Traffic Development units in designing and executing trade and airline partnership approaches.
Stakeholders involved in this Plan The NTA, new central Market Partnering and Air Traffic Development units, the local Tourism Industry, airline companies, tour operators and travel agents, CTO offices abroad, regional tourism offices, etc.
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Separate Action Plan 5. Improvement of the Quality Issue to tackle and objective to achieve Issue The quality of most of Cyprus’ tourism services are in line with the competitive set average, which means that Cyprus has no competitive advantages. In certain cases, Cyprus’ position is even risky (such as transport to and inside the destination, which ranked as unsatisfactory in the Cyprus customer experience journey). It is necessary then to increase the quality of the island’s tourism services so as to boost the destination’s competitiveness and contribute to delivering first-class tourism services. Moreover, a widely-accepted quality label system will unify product quality standards from all of Cyprus’ destinations. Objective Launch a world-class system of quality labels. Tourists will have an easily accessible informative system on the quality offered by Cyprus’ different providers and the island will have the tools to manage said system. Priorities for implementation are: destinations, accommodation, attractions, tour operators and transport services.
Setting priorities to develop a powerful system of labels For Cyprus to implement and manage an attractive and powerful system of tourism labels, we need to make sure that: •
The Cyprus Quality Label Unit is established inside the NTA.
•
The system of quality labels is successfully implemented across Cyprus.
•
The quality label system is marketed in markets and destinations.
•
The operations and quality of the implemented label owners are systematically monitored and controlled.
Actions needed to implement a powerful system of quality labels •
The Cyprus Quality Label Unit is established inside the NTA. To achieve this, we need to do the following: 1. Constitute the unit’s organisation structure considering its main functions: label development, management, admission and control, marketing, e-platform operations, etc. 2. Staff the unit with talented people coming from public agencies and outside the public sector. 3. Empower the team with a highly practical education and training approach before launching the unit.
•
The system of quality labels is successfully implemented across Cyprus. To achieve this, we need to do the following: 4. Define and develop the best system of labels for Cyprus studying existing international labelling approaches and the specific conditions of tourism resources in Cyprus.
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5. Establish the quality criteria and processes for each label (rights and duties of members, in/out of membership, promotion to a new category, penalties, etc.). 6. Set up an informative e-platform explaining and market the label system to different “customers”: the Cypriot industry, travellers, tour operators and even the media. •
The quality label system is marketed in markets and destinations. To achieve this, we need to do the following: 7. Promote the new label system to the Cypriot industry through regional stakeholders’ meetings, media campaigns, etc. 8. Implement the CQL System Marketing Plan, defining the key messages, types of content, and communication channels to market the system to local stakeholder, international trade, and tourists. 9. Develop rich B2C marketing material. Provide excellent multimedia content about the labelled destinations, attractions, and services to the end-users.
•
The operations and quality of the implemented label owners are systematically monitored and controlled. To achieve this, we need to do the following: 10. Control quality standards on a regular basis to ensure compliance with label criteria. Let well-trained inspectors perform the control visits ensuring the quality of the operations and the satisfaction of the visitors. 11. Continuously monitor customer satisfaction through frequent surveys and big data analysis, sharing results with the industry. 12. Implement the Quality Excellence Awards ceremony every two years, constituting a jury with industry reputed experts and professionals.
Related measures to accompany the previous actions To achieve the above, we need to complete the following accompanying measures: •
Engage Private industry stakeholders, invite them to participate in defining the quality standards of the label systems, ensuring that they fully adhere to the system.
•
Train entrepreneurs with online seminars about the processes required to join CQL and remain accredited.
Stakeholders involved in this Plan To be successful we need additional efforts from: The National Tourism Authority, Regional and Local Tourist Authorities, private stakeholders, Industry Associations, Travel Trade, specialised media, etc.
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Separate Action Plan 6. Integrated Spatial Tourism Development for major Tourism Areas Issue to tackle and objective to achieve Issue Cyprus is lacking a systematic tourism development also on the ground. Resort, hotel, and real estate developments have not followed a strategic masterplan, leading to rather homogeneous, massive, and opportunity driven coastal building activity, often chaotic or even illegal. Without proper tourism development master planning, market and product diversification will not be possible, and the quality of products and environments will continue to suffer. Objective Define a basis for a tourism development master planning effort for the 2017-2030 period that can be implemented by the relevant government organisations. It specifies how much (volume), where, how and at what speed tourism growth can and should be achieved during the 2017 – 2030 period and considers the integration and alignment of tourism planning and development with governmental strategy in the areas of infrastructure, agriculture, and environment.
Setting priorities to develop a powerful tourism development planning system For Cyprus to implement and manage an attractive and powerful system of tourism labels, we need to make sure that: •
A dedicated and empowered central government organisation is planning and guiding all touristic developments.
•
Strategic tourism development only takes place in carefully selected and defined zones and ways.
•
A legal and regulatory framework supporting an effective implementation of the planning, especially for private investors.
Actions needed to implement world-class planning • A dedicated and empowered central government organisation is planning and guiding all touristic developments. To achieve this, we need to do the following: 1. Place the unit in an empowering organisational environment, well connected to major ministries and other stakeholders. Carefully plan, staff and enable the unit. 2. Identify and ensure the right funding of the unit. • Strategic tourism development only takes place in carefully selected and defined zones and ways. To achieve this, we need to do the following: 3. Set up multidisciplinary planning teams for each region to be developed. 4. Deeply analyse each local destination including touristic resources, economic, social, and environmental situation. 5. Craft the story of each place in order to guide place and product development.
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6. Develop detailed plans including development program, business models, land use, infrastructure and local design language and style. 7. Ensure financial feasibility and, in collaboration with Invest Cyprus, attract the right type of investors. 8. Define the right development model between public and private stakeholders and a detailed implementation programme for each region. • A legal and regulatory framework supporting an effective implementation of the planning, especially for private investors. To achieve this, we need to do the following: 9. Carefully review and redraft the elements of the current legal and regulatory framework affecting tourism planning, investment, and development. 10. Anchor sustainable development conditions within the new framework, both ecological and social.
Related measures to accompany the previous actions To achieve the previous actions, accompanying measures are required: • •
•
the
following
Review and redefine development of existing tourism development areas. Establish the Land Acquisition & Procurement strategy: The definition of a policy on land (acquisition, procurement, and compensation) facilitates the planning and development of new tourist accommodation and associated facilities and services to meet future tourism demand. Initiate an online Development Intelligence Centre: Managing all key tourism development data using an intelligence platform helps to guide the decision-making processes of the Centralised Tourism Planning Unit.
Stakeholders involved in this Plan To be successful we need additional efforts from: The National Tourism Authority, MECIT, Ministry of Interior (Dpt. of Town Planning & Housing and Dpt. of Lands and Surveys), Ministry of Agriculture, Rural Development and Environment, Regional and Local Authorities, Governmental Agencies (CYSTAT…), private sector, local population, etc.
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Figure 17. Cyprusâ&#x20AC;&#x2122; development areas and clusters
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Part D _____________________________________________________________________________________________________
Implementing the Strategy
Akamas, Pafos
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9.
Implementing the strategy
9.1
Who is going to implement the Strategy? The successful implementation of the Cyprus Tourism Strategy requires the setting up of a number of organisations and specialised bodies as well as strengthening existing ones. Among these, four specific organisations form the core of the institutional framework and are key to the successful implementation of the CTS: Figure 18. Institutional Framework for the implementation of the CTS
The Inter-Ministerial Committee for Tourism (IMCT) will provide guidance and monitoring progress along the implementation of the CTS. It will also foresee constraints and make recommendations on how to address them. The IMCT will be composed by top-level representatives of the Ministries that are directly involved in tourism as well as those having a significant impact on tourism development. The National Alliance for Tourism (NAT) will be composed by 30 members including representatives from the tourism industry, as well as representatives of related sectorâ&#x20AC;&#x2122;s. Its main role is to be the main government counterpart to discuss and reach consensus on major issues related to tourism development and promotion. The Office of the Strategy Manager (OSM) will monitor the implementation of the Strategy and will be set up under the Office of the President of Cyprus, and will directly report to the President. It will recommend corrective actions where necessary and ensure that all initiatives and programmes are developed according to plan. The future National Tourism Authority (NTA) will have an important role in implementing the Strategy as the entity in charge of planning, regulating and promoting sustainable tourism. In order to do so, its organisational structure will be fully aligned with the Strategy. The NTA will work closely with all entities (public and private) to ensure the successful roll-out of the Strategy. Alongside the OSM and the NTA, over 300 relevant stakeholders from the public and private sectors will have a leading role in implementation: private companies, professional and business associations, tourism enabling entities, regulatory sector custodians and especially the future National Alliance for Tourism.
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9.2
81
What will be the major implementation milestones? The implementation of the Strategy is divided into four main phases over the next 14 years, as demonstrated in the graph below:
a. The Strategy implementation phases Figure 19. Implementation phasing 2017-2030
Phase 1 Organising for growth (2017-2018): In this phase, Cyprus should organise its efforts to prepare for impending growth. This phase is very laborious and investment-intensive (activation of the 1st set of experiences, village restoration, etc.). Particular attention will be given to establishing Governmental entities that will prepare the groundwork for implementing different initiatives and projects. Phase 2 Take off (2019-2020): During this phase, quick wins -projects in different clusters delivering early value- should be prioritised and executed. Key investments will be in experiences (Grand Tour of Cyprus, etc.), tourist accommodation and tourism infrastructure projects. Phase 3 Growth (2021-2025): In this phase, cluster development started in phase 2 will continue together with the development of new clusters. Phase 4 Stabilisation (2026-2030): This final phase of the CTS will continue the direction of previous phases, focusing on the completion of tourism infrastructure and supra-structure in key projects, mostly in terms of experience systems, accommodation facilities, as well as broadening and diversifying the tourism facilities and services.
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b. Key milestones to be achieved by the Strategy implementation The figure below shows the roadmap for the next 14 years, considering the key milestones to be achieved in each period: Figure 20. High-level Execution Roadmap 2017-2030 New t ourism governance framework launched
11.000+ new hospit alit y keys operat ional 1st Top Experience launched
4 Top Experiences launched
2017-2020 Signat ure Experience Program (SEP) launched
22.000+ new hospit alit y keys operat ional 8 Top Experiences launched
2021-2025
15,000 new direct employment s act ivated 1st TZNIs launched
33.000+ new hospit alit y keys operat ional
2026-2030
19.000 new direct employment s act ivated
26.000 new direct employment s act ivated
Key milestones
Note (1): The number of keys includes 5.000 unlicensed keys and Serviced Units. Note (2): For the alternative Premium & Soft growth model, the distribution of new keys for each phase is as follows: 7.000+ new keys by 2020, 14.000+ new keys by 2025 and 22.000+ new keys by 2030. Regarding employment, the distribution of new direct employments activated for each phase is distributed as follows: 11.000+ new employment by 2020, 14.000+ new direct employments activated by 2025 and 18.000+ new direct employments by 2030.
Although the Strategy covers the 2017-30 period, many of its projects and initiatives will come into being in the next few years, ensuring that Cypriots will see the benefits of the Strategy relatively soon. The following roadmap shows the full list of critical milestones for the next 4 years (2017-20), organised into drivers and enablers outcomes: Figure 21. First 4-year Execution Roadmap 2017-20
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9.3
83
What are the economic implication and impacts of the Strategy a. The economic investment required The total investment required is around 18.500 million Euros, of which around 10% is from the public sector. With regards to private investment, the majority is intended to come from various types of Cypriot investors, although a certain amount of foreign investment (the minority) is considered desirable – especially that which is willing to collaborate with local investors in also providing technology, competitive advantages, and clients. This investment has been grouped into five main types as can be seen below: a. Soft investment: strategy planning, management, and execution b. Experience System: Cyprus’ system of tourism experiences (for enjoying Cyprus) c. Infrastructure and utilities: tourism utilities and serviced lands in good conditions d. Tourism accommodation: excluding hotel serviced units (for staying in Cyprus) e. Real Estate: including hotel serviced units (for staying in Cyprus) Table 17. The five types of investment: 2017-2030 (Million Euro) Phase 1
Concept
Phase 2
Phase 3
Phase 4
Total
%
2017-18 2019-20 2021-25 2026-30 2017-30
%
Public
a. “Soft” Investment
92
110
224
192
618
3%
90
b. Experiential System c. Infrastructure & Utilities d. Tourism Accommodation & Resorts (excluding hotel serviced units) e. Real Estate (including hotel serviced units)
106 986
160 1.643
174 1.972
158 1972
598 6.573
3% 35%
63 15
526
802
1.278
2.406
5.012
27%
0
756
1.224
1.623
2.174
5.777
31%
0
2,466
3,938
5,270
6,902
18,576
100
10
Total
Note: The numbers have been rounded up, so slight differences may be found.
Tourism industry will benefit from large public investments (national or regional) that have not been included in the above table as they are not specifically “tourist-related”, rather they are oriented towards general regional economic development (e.g. infrastructures like highways, motorways, water treatment plants, etc.). A distribution of investment over four time periods, as well as the split between the public and private sectors, is presented in the figure opposite. When referring to public investment in developing tourism, this must be considered within the framework of the broader economic system, since other economic activities and society as a whole also benefit from it.
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Figure 22. Distribution of projected investment required 2017-2030 (Mill. Euro) 18.576
Public Investment Private Investment
6.902 2.466
3.938
5.270
90%
90%
90%
90%
90%
2017-2018
2019-2020
2021-2025
2026-2030
2017-2030
Note: The numbers have been rounded up, so slight differences may be found.
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b. The production value, tourism income and the contribution of tourism to the GDP The contribution of tourism to the GDP is projected based on: the direct tourism production (also called tourism expenditure); the total (direct + indirect) tourism production; and the total tourism income. Therefore, considering the growth of both, the GDP and tourism income, it can be concluded that the average contribution of tourism to the Cyprus GDP will increase, from 15,9% by 2020 (from 13% in 2015) to 28% by 2030.
Table 18. Share of tourism expenditure and tourism production of the GDP (CAGR =2,3%) Concept
2020
2025
2030
GDP (Million Euro)
19.953 22.856
24.338
Direct tourism production (Million Euro)
3.323
4.638
7.133
Total (direct+indirect) tourism production (Million Euro)
5.816
8.116
12.482
Total tourism income (Million Euro)
3.175
4.432
6.815
Tourism income over GDP (%)
15,9%
20,4%
28,0%
c. The multiplier effect on Cyprus’ economy A crucial effect of tourism growth that should be highlighted is the impact of tourism expenditure over other sectors of the productive system. During their stay in a destination, tourists generate a certain expenditure which becomes tourism income for the destination. In the case of Cyprus’ economy, tourism contributes around 13% to the GDP. At the same time, the effect on production is not limited solely to the economic activities where tourist expenditure is directed. Following the multiplier methodology (Leontief’s InputOutput model), a cascade effect on the entire economic system is created due to an additional production of goods and services provided by other industries which is required to satisfy direct expenses.
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Table 19. Impact of the current tourism model on Cyprus’ economic activity (Million Euro) 2015
2030
Primary
0
0
Industry
65
185
Construction
17
48
Utilities
12
33
Retail and services Accommodation & food services Total (Mill.)
862
2.457
1.436
4.092
2.391
6.815
Source: CYSTAT
CYPRUS TOURISM STRATEGY
85
d. How much employment will be generated by the Strategy implementation? The Premium Destination Strategy aims to provide higher quality for tourists, which in turn requires more employees. As a result, the average employment per key ratio is expected to increase up to 0,40 (from 0,28), aligned with comparable Premium destinations. Tourism employment is comprised of the following typologies: â&#x20AC;˘ Direct hospitality employment occupied in hotels, which will be used as the basis for our calculations. Other tourism employment aimed at meeting the demand for tourism goods and services that do not include accommodation, which will be considered as induced jobs. â&#x20AC;˘ The indirect employment multiplier, resulting from the production processes that are required by accommodation companies.
Figure 23. Total tourism employment (direct and indirect) by 2030 140000,0 120000,0 100000,0 80000,0
61.456
19.890
21.457
12.000 12.000
20.051
21.650
25.197
2015
2020
2025
2030
60000,0 40000,0 20000,0 -
69.098
63.831
49.500
Accommodation jobs
Other tourism jobs
24.933
Indirect jobs
Source: Based on official inter-sectorial tables and satellite accounts from a sample of countries.
e. What impact will the Strategic Plan have on taxation revenues? Taxes are a recommended way of financing the cost of public investments and supporting private investors. Current taxation rates (assuming that no incentives and deductions are expected within the tourism sector in the next years) provide insight on the increase of tourism production and its expected positive impact on tax receipts. The accumulated tax receipts up to 2030 could increase by 6,184 Million Euro as a result of the Cyprus Tourism Strategy. This will allow the public sector to finance its contribution to the required investment for the implementation of the strategy. Table 20. Increase of taxation receipts as a result of the strategy
EuroStat classification
2015 Amount (Mill. Euro)
2030 Amount (Mill. Euro)
Strategic Gap Accum. 2015-2030 Amount (Mill. Euro)
Tourism tax revenues (with the Premium Destination Strategy)
818
2.330
8.610
Tourism tax revenues (without the Premium Destination Strategy)
818
1.142
2.426
Difference between revenues (with/without Premium Destination Strategy)
-
1.188
6.184
5.957
8.322
17.675
Cyprus Economy tax receipts
Source: Ratio over the GDP from Eurostat 2014 assuming it will remain constant (34,2%)in the coming years
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9.4
CYPRUS TOURISM STRATEGY
Which is the additional economic impact generated by the Strategy? The projections indicate that due to mainly external reasons, tourist demand for Cyprus will benefit from a certain organic growth over the next 15 years, thereby increasing the production and income generated by the islandâ&#x20AC;&#x2122;s tourism industry. The Strategy will contribute to generating production and income that is much superior to those that correspond to the organic growth. The difference between one figure and the other is the value gap. This indicates the value that is added by the Strategy or, if required, the additional production and income that the Strategy brings. In the case of Cyprus, the Strategy will contribute to higher value due to three factors: more tourists, a longer average stay and greater daily expenditure per tourist. The evolution of production under the Organic Growth (i.e. no strategy implemented, 2% annual tourism growth) and under the scenario that benefits from the Premium destination strategy is demonstrated below. Table 21. Value Gap Per capita trip expenditure (Euro)
Number of overnights (x 000) A Organic growth Premium (no Destination strategy) Strategy B/A
Year
Direct tourism production (Million Euro)
A B
A B
Organic growth Premium (no Destination strategy) Strategy B/A
Organic growth (no strategy)
B Premium Destination Strategy B/A
20151
17.498
17.498
1,00
577
577
1,00
2.352
2.352
1,00
2030
21.816
32.602
1,50
688
1.148
1,67
3.494
7.133
2,04
+32.305
+113.280
3,50
-
+8.569
+35.854
4,18
Dif.201520302 Value Gap3
-
+80.895
+27.285
THR estimates of international and domestic tourism data based on CYSTAT 2014-2015. Accumulated 3 Value Gap = (B-A) of Dif. 2015-2030. 1
2 Difference
Figure 24. Projection of Direct Tourism Production by 2030 Direct production (Million Euro)
86
7.500 6.500 Value gap= +27.285 Million Euro (2015-2030)
5.500 4.500 3.500 2.500 1.500 2015
2020 Organic growth (no strategy)
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2025
2030 Premium strategy
CYPRUS TOURISM STRATEGY
9.5
87
What will the growth model for tourist accommodation be? Total growth until 2030 By 2030, Cyprus must develop 33.950 new accommodation keys to join the current 43.144 and thus achieve the 77.094 that are required by that year. This is illustrated in the following table: Table 22. Tourist accommodation keys 2015-2030
Typology
Keys 2015
%
Needed by 2030
A. Hotels & Hotel Apart.
35.701
83
B. Other tourist accommodation
7.443
17
-
-
9.797
100
77.094
C. Serviced Units Total
43.144
55.775 11.522
%
To be developed 2015-30
72%
+ 20.074
15%
+ 4.079
13%
+9.797
100
33.950
Note: Including Serviced Units and 5.000 unlicensed keys likely to be licensed, according to CTO.
Growth rate As indicated by the figure below, an increase of around 11.000 new keys is needed to be developed every five years; an average of 2.200 per year.
Figure 25. Growth rate 2015-2030
Source: THR projections Note: Includes serviced units and unlicensed keys (5.000)
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New types of tourist accommodation In order to respond to new market demands and preferences, new types of accommodation should be developed, i.e.: • Inns: The new trade name for 1 and 2-star hotels. • Guest Houses and Bed & Breakfasts: Small, family-run accommodation, offering food (Guest Houses), simply breakfast (B&B) or “premium” rural accommodation, etc. • Special lodging: These respond to demand trends; i.e. mansions, luxury motor home and luxury villas • Glamping: A combination of campsites, glamour and luxury.
Table 23 Hospitality accommodation keys to be developed by 2030 A
C B
Typology 1. Hotels & Hotel
% of total keys 2030
Number of keys 2030
Keys to be Current developed inventory (net) (2015) (C = A-B)
72%
55.775
35.701
20.074
2. Inns (1+2 stars)
4%
3.076
2.487
589
3. Special lodging
5%
4.196
3.768
428
4. Guest Houses, B&B
5%
3.267
859
2.408
5. Campsites, glamping
1%
983
329
653
6. Serviced Units
13%
9.797
-
9.797
Total
100%
77.094
Apart. 1
43.144
33.9501
Includes 5.000 unlicensed keys likely to be licensed, according to CTO estimates Source: THR projections 1
The new concept of ‘Serviced Units’ A Serviced Unit is an apartment, town house, villa or even a hotel room sold to an investor which is then operated as a tourist accommodation unit by a hotel or specialised tour operator. The CTS considers that up to 50% of the growth in the tourist accommodation offer can be done in the form of Serviced Units, especially in resorts.
Where should growth take place? The 33.950 new accommodation keys will be developed in three different spatial areas: 1. Inside and/or on the periphery of urban areas. 2. In isolated areas on the coast or inland. 3. In so-called 4th generation resorts, which in turn can be of two types: 3.1 boutique resorts (less than 750 keys) or 3.2 mega resorts (4.000 keys +).
Second Homes The CTS considers a new paradigm for Second Homes in order to avoid chaos and a lowquality offer, while at the same time improving the profitability of investment in resorts which, due to significant investment in infrastructure, equipment, and facilities, is low. In light of the above, the majority of Second Homes will be developed in resorts or associated with the construction of hotels, according to coefficients established by the CTS.
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How does the Strategy affect the sustainability and quality of life of the Cypriots? A Cypriot’s quality of life increases when three things are achieved at once: greater wealth, a greater sense of well-being and their capacity to continue generating these two elements in future is preserved. •
Greater wealth: the result of good competitiveness due to the efficient use of resources (human, financial, etc.) it entails. The Strategic Plan devotes a large amount of initiatives to substantially improving the competitiveness of the Cyprus Tourism Sector. This, in turn, contributes to increasing its capacity to generate wealth.
•
Increased sentiment and well-being: this develops when people see that their daily life is more comfortable and their feeling of happiness increases. The former relates to the aesthetics of the environment, an absence of contaminants, the quality of public services, etc. The latter is associated with their sense of identity and belonging, and their confidence in the future.
•
Ability in future to generate wealth and well-being: preserving the capacity to continue generating wealth and well-being for Cypriots in future depends on the way the environmental and social sustainability of the island and its inhabiting communities is managed.
The following table demonstrates how the different components of the strategic plan cater to each and every element which generates a better quality of life for Cypriots:
Generate wealth & well-being
Wealth
Sentiment & well-being
Generate wealth & well-being
Initiatives
1. Experience Cyprus Programme 2. Cyprus Quality Labels
Sentiment & well-being
Component of the Strategy
Wealth
Table 24. Impact of the Strategy on the quality of life for Cypriots
3
4
2
12. Seasonality reduction
2
2
4
4
3
3
13. Wise Tourism Index
4
2
3
2
3
4
3
2
4
4
1
4
4
2
4
Component of the Strategy
3. Visual Pollution
1
4
3
14.Carbon Footprint reduction
4. National Tourism Planning
2
4
4
15. “Made in Cyprus” & “Soul of Cyprus”
2
4
4
4
1
4
4
1
4
18. Human Capital
4
2
3
1 4
4 1
3 3
19. Airline partnership
4 4
2 3
2 4
4
3
3
4
3
4
4
3
3
22.Performance monitor
4
3
3
4 4
3 3
3 3
4. Seasonality Reduction
2. Products /Segments
2 4
2 3
4 3
3. Priority Source Markets
4
3
3
2
4
4
5. Cyprus Tourism growth model 6. Product Development Unit 7. Tourinvest Cyprus unit within CIPA 8. MSME support program 9. Marketing partnering 10. Brand management system 11. World-class marketing plan 1. Branding
Plans
9.6
89
Note: Average impact from low: 1 to high: 4
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16. Competitiveness Unit inside CTA 17. Legal and regulatory framework
20. Governance System 21. Tourism System management
5. Cyprus Quality Labels 6. Integrated Development Plan
90
9.7
CYPRUS TOURISM STRATEGY
Which actions are critical for the next 24 months? The starting point for implementing the Cyprus Tourism Strategy will be to present the Strategy to the Council of Ministers, and receive their endorsement. The Strategy will also be presented to stakeholders for the same reason, i.e. tourism and development bodies and units, the tourism industry, key community groups and key Ministries. The success of the implementation of the Strategy depends on the many stakeholders, both directly and indirectly involved in the industry, working together to bring a common Vision for Cyprusâ&#x20AC;&#x2122; tourism to fruition. Hence, publicising the Plan will be essential in generating their support. To implement the Strategy, there should be an intense preparatory phase lasting until the end of 2018 to lay the groundwork for implementing the Cyprus Tourism Strategy. The 10 most critical actions are listed below: Table 25. Critical and urgent actions for the following 24 months
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Reach an agreement on the financial resources needed to ensure the viability of the implementation process.
Strength the NTA Planning Dept. and foster alignment with the CTS in the preparation of tourism clustersâ&#x20AC;&#x2122; master plans.
To ensure that the execution process is conducted in a coordinated and timely manner, and the key actions are implemented.
Focus on key tourism topics that are directly related to the CTS (product/ experience development, MSMEs, investment attraction, marketing, etc.)
To oversee the development, alignment, implementation, and management of the CTS in order to fulfil the Vision.
To provide consumers with easily identifiable symbols for trustworthy standards of quality in the tourism industry.
To guarantee optimal support to the teams and ensures the efficiency of communication between all stakeholders involved.
It will establish the base of Cyprusâ&#x20AC;&#x2122; positioning. The Grand Tour of Cyprus has great potential to become the first one.
The organisational alignment process will ensure its framework is aligned operationally and strategically with the realisation of CTS.
It will define target markets, destination concept, spatial zoning, transport infrastructure, accommodation services, etc.
CYPRUS TOURISM STRATEGY
9.8
91
Which could be an alternative implementation and growth model? Destinations can adopt either a growth model that maximises its full potential targeting quantity and not quality (i.e. the average expenditure per stay), or a growth model that focuses on quality rather on quantity. The first approach creates reduced value for the destination and, in the long run, have both socially and environmentally high costs; while the second one produces high value at reasonable costs. Taking into consideration alternatives on how Cyprus could grow, three different models have been developed and assessed: A. “Standard” model aiming to maximise the full growth potential, by prioritising volume over economic, social, and environmental profitability. This model attracts a higher number of tourists, although not of revenues (as lower expenditure tourists are targeted). The high demand requires more keys to be developed, and spatial planning is concentrated in large and mega resorts, mainly in Tourism Zones of National Interest. THR discourages this model as it requires the highest investment, especially on accommodation, real estate and supporting infrastructure, and has the lowest return over investment. B. “Premium & wise growth” model focuses on growing intelligently and with greater economic, social, and environmental profitability. This model attracts fewer tourists than the “Standard” as a result of a demand strategy that targets higher spending tourists. THR recommends this model as it is more favourable from a financial and a social perspective. Spatial development plan has an emphasis on developing rural tourism, as well as reducing the sizes of resorts compared to the previous model. C. “Premium & soft growth” model is based on the “Premium & wise growth” model but with an even lower volume of tourists, but maintaining their high spending profile, therefore it requires less new developments. THR proposes this model as an alternative as it reduces the number of tourists by 15%. The direct effect of less tourists is a need of less keys to be developed. However, even though the “Premium & soft” will require keys, its supporting infrastructure, and utilities, won’t benefit from economies of scale due to the smaller size of these developments. Each growth model has a different spatial development approach as a result of the technical and political assessment by the authorities concerned. Model A is the baseline scenario while models B and C represents 3 changes with regards to A: more keys in urban and/or isolated areas, more keys in boutique resorts and less keys in mega resorts. One method which is strongly recommended is to encourage grouping boutique resorts into clusters revolving around infrastructure, equipment, and shared facilities, most probably inside a Tourism Zone of National Interest. Table 26. Location of the new accommodation keys Location of new keys
A. “Standard” model
B. “Premium & wise growth” model
C. “Premium & soft growth” model
1. Keys in urban or isolated areas 2. Keys in boutique resorts 3. Keys in mega resorts
40% 30% 30%
45% 40% 15%
50% 50% -
Total
100%
100%
100%
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Figure 26. “Premium & soft growth” Strategy Map
Results for Cyprus (2030)
Become, before 2030, an all year-round sustainable destination receiving 4,1m intl. tourists - 40% of whom during Nov-Apr International tourists (M.) 4,1
Tourism Revenue (M. €) 6.000
GDP Contribution 24%
Strategic Processes DRIVERS
1.
New tourism keys to develop 17.700
PARTNERS Attractive business opportunities
CUSTOMERS An exceptional tourism experience 2.
Total new Employment 33.000
Investment required (public & private) (M. €) 15.500
INVESTORS Attractive investment environment & opportunities 3.
Attract the right amount of vetted investors and MSMEs
Wise tourism index 850/1000
SOCIETY Better quality of life and sustainability
4.
Excel in planning and development
A. Dev elop a system of high v alue experiences in Cyprus
D. Implement excellent tourism dev elopment master planning
G. Attract necessary v etted investors
J. Dev elop a powerful tourism brand
M. Design and manage a tool to assess tourism sustainability
B. Significantly improve the v alue along the customer journey
E. Define and manage clear growth models for all regions
H. Ensure competitive MSMEs grow in Cyprus
K. Conquer more higher yielding tourists
N. Reduce carbon footprint of tourism activ ity in Cyprus
C. Dramatically reduce visual pollution in the destination
F. Increase product div ersification and innov ation
I. Increase the quantity and quality of market partners
L. Reduce seasonality
O. Enhance vulnerable economic activ ities and protect cultural identity
Benefiting the local society and the environment
7.
Develop a highly competitive diamond for the tourism sector
Implement a governance & management framework and culture
T. Establish a sound system of modern gov ernance
P. Promote productiv ity improvement tools
ENABLERS
Conquer more better yielding customers
5.
Deliver an exceptional tourism experience
6.
Learn and growth
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Q. Reengineer legal and regulatory framework
U. Implement an efficient management framework
R. Educate and train the right people
V. Launch a state-of-the-art monitoring system
S. Dev elop air capacity
Source: THR based on “The Execution Premium”, Kaplan & Norton
Table 27. 3 growth models
Component of the model
1. 2. 3. 4. 5. 6. 7. 8. 9.
Millions of tourists in 2030 CAGR in % Direct Tourism Contribution (Million Euro) Total (Direct + Indirect) tourism production (Million Euro) Tourism Income (Million Euros) Contribution to the GDP (Income over GDP) ROI from 2016 to 2030 (private sector) Taxation receipts from Tourism by 2030 (Million Euro) Total new employment by 2030
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B. “Premium & wise growth” model
C. “Premium & soft growth” model
Maximising the full growth potential, prioritising volume over economic, social, and environmental profitability.
Growing intelligently and with greater economic, social, and environmental profitability.
Like the “Premium & wise growth” model but with an even lower volume of tourists and less new buildings.
7,2 3,9
6,2 2,9
5,3 1,7
6.335
7.133
6.063
11.086
12.482
10.610
6.053
6.815
5.793
24,9%
28,0%
23,8%
34,3%
43,2%
38,5%
2.070
2.330
1.981
39.279
45.729
32.783
A. “Standard model
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Component of the model 10. 11. 12. 13 14.
15. 16 17. 18.
19.
20.
21. 22.
23.
24. 25. 26. 27.
Total investment until 2030 (Million Euros) % Public investment until 2030 Total tourist accommodation keys by 2030 (including Serviced Units)1 Existing tourist accommodation licensed keys by 2015 New tourist accommodation keys to develop by 2030 (including Serviced Units) 2 New Second Homes to develop by 2030 (excluding Serviced Units) Total new accommodation keys by 20302 Total accommodation keys by 2030 % of new tourist accommodation keys in resorts by 2030 (including Serviced Units) % of new tourist accommodation keys in urban environment by 2030 (including Serviced Units) % of new tourist accommodation keys in rural environment by 2030 (including Serviced Units) % of new second homes in resorts by 2030 (excluding Serviced Units) % of new second homes in urban environment by 2030 (excluding Serviced Units) % of new second homes in rural environment by 2030 (excluding Serviced Units) Average size of new mixed-used resorts (keys) Number of resorts3 (average, min. and max.) Carbon footprint from tourism over total (Ktons of CO2) % Carbon footprint from tourism (2030)
1 Unlicensed
A. “Standard model
B. “Premium & wise growth” model
C. “Premium & soft growth” model
24.407
18.576
15.513
9
10
12
88.630
77.094
65.877
43.144
43.144
43.144
40.486
28.950
17.733
29.237
22.328
14.344
69.723
51.278
32.077
117.867
99.422
80.221
60
55
50
26
33
36
14
12
14
78
72
67
16
24
27
6
4
6
2.200
1.200
800
21 (19-24)
27 (24-29)
23 (20-25)
471
404
344
6,6 – 11,0
5,0 – 8,3
4,8 – 8,0
hotel keys (5.000) that are likely to be licensed are included Unlicensed hotel keys (5.000) that are likely to be licensed are not included 3 Average Number of resorts = ((14) x (18) + (15) x (21)) / (24) = (25) The estimated % of carbon footprint from tourism by 2015 is 3,36. Note: The numbers have been rounded up, so slight differences may be found. 2
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Epilogue Applying rigorous logic, Cyprus will make tourism magic The Cyprus Tourism Strategy is the product of the wisdom, experience, ideas, and dreams of a large number of people. It has taken over 6 months to formulate the Strategy and it will take 15 years to bring it to fruition, but soon, the logic of this Strategy will begin to bear fruit. As a result, the people of Cyprus will welcome tourism and experience its benefits in every area of the country, from Pafos to Ammochostos, from the mountainous of Troodos to the many beaches. Because the Strategy is comprehensively grounded in information and logic, every part and segment of Cyprus’ economy, society and environment will benefit. Because the logic of the Strategy is wise, those who are attracted to Cyprus’ tourism will be discerning, mindful travellers, who seek to understand, respect and share, and who in turn will spread the word of Cyprus as a source of treasures. These discerning travellers will encounter an ideal location with an excellent temperature, inspiring light and the positive energy that is derived from the Sun; “The Magic of the Sun”. They will stroll down idyllic coastlines, charming little villages, and beautifully unspoiled green landscapes, dotted with picturesque vineyards: all of which is contained in this magical island. They will find historic and thrilling tales of the ancient Greco-Roman Kourion, as well as the legend of Aphrodite, the goddess of love and beauty, who it is told was born from the sea foam in the region. They will partake in the ritual of sharing goods and fresh local cuisine, from specialty cheeses and heart-healthy olive oil to the sweet dessert wine of Commandaria. This is the place they will return to. This is the place they will share with others. This is the magic that will emerge as we employ the logic of Cyprus’ Tourism Strategy. Fully achieving the vast social and economic potential of tourism for Cyprus is an enormous opportunity and an ambitious task. It requires both vision and precision. It demands detailed planning and execution, but it cannot succeed without the inspiration, the determination and the investment required to turn what is potential into reality over time. For Cyprus, it will represent prosperity, economic resiliency, and cultural flourishing. For the world, it will signify an authentically Mediterranean destination. The Strategy is now in place. It is our joint responsibility to turn this logic into magic.
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Glossary of Terms Balanced Scorecard (BSC)
The Balanced Scorecard attempts to measure and provide feedback to organisations in order to assist in implementing strategies and objectives.
Cluster
A territory where, in simple terms, tourism experiences take place. It represents a planning tool to organise, structure and develop a destination with high added value for the tourist.
Core Strategy
A set of proposals that determine the overall ambitions and priorities of a strategy, the key drivers of change. It is composed by three main components: the objective, the competitive advantage and the business, and market scope.
Customer Journey
The customer journey spans a variety of touchpoints by which the customer moves from awareness to engagement and purchase.
Guiding Principles
A set of norms, rules, or ethics that represent what is desirable and affirmative for the execution of a strategy, it determines the fairness or unfairness of an action.
Initiatives
The engine that puts the strategy into action, and addresses the identified gaps between the stretched targets set for scorecard measures and the current performance of those measures.
Key Issues
The largest positive or negative factors that are affecting the achievement of the destination´s vision.
Key Performance Indicator (KPI)
A set of quantifiable measures that an organisation uses to gauge or compare performance in terms of meeting their strategic and operational goals.
Key Success Factors
Key areas of performance and critical factors that the organisation should take into account, in order to ensure the strategy is implemented successfully.
Master Plan
(In land-use planning) A plan for the overall utilisation of a particular area, including its allocation for residential or manufacturing uses and the corresponding environmental impacts. (In architecture) A small-scale graphic outline that shows all the major elements of a project in a specific land.
Mission Statement
A small phrase to lay out the core purpose of a destination, and to answer the question “why do we exist?”.
Road map
The schedule of all the initiatives defined in the plan. The final aim is to provide a well-defined and practical scheme for future activities and tasks to be carried out.
Serviced Units
Real estate units that, after being sold, are given by the owner to the hotel to be rented as standard hotel keys, hence benefitting from the hotel’s services. Part of the income generated by these units, goes to the hotel producing improved return on investment.
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Special Lodging
Type of accommodation that does have a recognised personality in the industry; like mansions, villas, mobile-homes, rural farms, among others.
Strategic Analysis
The strategic analysis is composed of internal and external analysis. Once the external and internal analysis have been performed, the SWOT analysis identifies the destination's existing strengths and weaknesses, its emerging opportunities, and the threats facing the destination.
Strategy Directions
High-level statement that captures the creativity of the strategy development process by creating a vision for each strategic issue.
Strategy Map
The Strategy Map provides a framework for an integrated view of a strategy; it provides a one-page visual representation of all the strategic dimensions. The strategy map enables organisations to describe the links between intangible assets and value creation with clarity and precision and to align processes, people, and information technology for superior performance. A concise statement describing the specific things a destination must do-well in order to execute its strategy. Objectives often begin with an action verb such as increase, reduce, improve achieve, etc. The different dimensions of the strategy that cluster the related objectives, usually into four to six groups, those represent the major components of the strategy.
Strategic Objectives Strategic Outcomes
SWOT Analysis
Standing for Strengths, Weaknesses, Opportunities and Threats, the SWOT is a framework for identifying and assessing issues within and outside the destination that can have an impact to accomplish its objectives, and hence provides an outline for strategic decision-making.
Targets
Targets set the measurable objective (level of performance or improvement) of the respective KPI needed to achieve the strategic objective within a certain timeframe.
Tourism Production
In-country tourist expenditure, both international and domestic.
Touristic Zone of National Interest (TZNI)
Large areas (200-2.000 hectares) that hold various resorts that share big infrastructures and equipment. These areas form tourism destinations by themselves and usually have more than 6.000 keys.
Value Proposition
An organisationâ&#x20AC;&#x2122;s value proposition is what distinguishes itself from its competitors. The value proposition provides value through various elements such as newness, performance, customisation, "getting the job done", design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability.
Vision Statement
A Vision Statement defines the mid- to long-term (three- to ten-year) goals of the organisation. The Vision Statement should be market oriented.
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List of acronyms BSC
Balance Scorecard
CAGR
Compound Annual Growth Rate
CIPA
Cyprus Investment Promotion Agency
CQL
Cyprus Quality Labels
CTO
Cyprus Tourism Organisation
CTPU
Centralised Tourism Planning Unit
CTS
Cyprus Tourism Strategy
CVP
Customer Value Proposition
CYSTAT
Statistical Service of Cyprus
DCA
Cyprus Department of Civil Aviation
DMC
Destination Management Company
EDGAR
Emissions Database for Global Atmospheric Research
EU
European Union
EUR
Euro
FIT
Free Independent Traveller
GDP
Gross Domestic Product
HCD
Human Capital Development
IMCT
Inter-Ministerial Committee for Tourism
KPI
Key Performance Indicator
KSF
Key Success Factor
MECIT
Ministry of Environment, Commerce, Industry and Tourism
MiC
Made in Cyprus
MIS
Management Information System
MSMEs
Micro, Small and Medium Enterprises
NGO
Non-Government Organisation
NTA
National Tourism Authority
OSM
Office of Strategy Manager
PDS
Premium Destination Strategy
PMT
Project Management Team
PPP
Public and Private Partnership
PPS
Pre-post season
PR
Public Relations
ROI
Return of Investment
SoC
Soul of Cyprus
SWOT
Strengths, weaknesses, opportunities, and threats
TCC
Tourism Connectivity Committee
TO
Tour Operator
TSM
Tourism System Management
TZNI
Tourism zones of national interest
UAE
United Arab Emirates
UK
United Kingdom
UNWTO
United Nations World Trade Organisation
US / USA
United States of America
VFR
Visit friends and relatives
WTTC
World Travel and Tourism Council
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Germasogeia Dam, Limassol
Innovative Tourism Advisors
Republic of Cyprus