Cyprus Tourism Strategy Final Report For: Republic of Cyprus Document No. 27
Prepared by:
Barcelona, March 2017
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Table of Contents Acknowledgements Chapter 0.
5
Introduction
0.1
Current situation and expected results
7
0.2
The Strategy elaboration process: approach and methodology
9
0.3
The structure of this report
Part A. Chapter 1.
11
Envisioning and Strategic Analysis Envisioning
1.1
The current situation and its challenges
15
1.2
Growth potential of tourism in Cyprus
18
1.3
Growth scenarios
19
1.4
Mission, vision and guiding principles
22
1.5
Change agenda
24
Chapter 2.
Analysis of Cyprus as a tourist destination
2.1
The Tourism Cluster and its brand
26
2.2
The Cyprus promise and the customer journey competitiveness
39
2.3
Cyprus competitiveness indicators
59
2.4
Assessment of Cyprus’ poor performance in traditional markets
81
2.5
Main conclusions and implications for Cyprus
83
Chapter 3.
Market forces affecting tourism
3.1
Trends affecting tourism demand
3.2
The Cyprus competitive set
105
3.3
Growth potential of Cyprus as a tourism destination
109
3.4
Summary and implications for Cyprus
142
Chapter 4.
92
Key issues to be tackled
4.1
The SWOT analysis for Cyprus as a tourist destination
147
4.2
26 Strategic Questions the Strategy must address
154
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Part B.
2
The Cyprus Strategy
Chapter 5.
The Core Strategy
5.1
The Strategy’s goal and objectives
159
5.2
The competitive advantage
162
5.3
The business scope
175
5.4
Destination strategy
182
Chapter 6.
Outcomes, Strategy Directions and Objectives
6.1
The 7 Outcomes
191
6.2
Strategy Directions and Objectives (drivers)
195
6.3
Strategy Directions and Objectives (enablers)
201
Part C.
The Strategic Plan
Chapter 7.
The Plan
7.1
The Strategy Map
206
7.2
Synthesis of Initiatives
207
7.3
Synthesis of Separate Action Plans
221
Chapter 8. 8.1
Driving Initiatives
Driving Initiatives
236
1.
Set up the “Experience Cyprus Programme”
237
2.
Introduce Cyprus Quality Label System
245
3.
Run a visual pollution initiative
252
4.
Implement the National Tourism Planning Initiative
259
5.
Steer Cyprus Tourism Growth modelling
271
6.
Install Product Development Unit
277
7.
Establish Tourinvest Cyprus Unit within CIPA
283
8.
Launch a MSME support programme
289
9.
Start Market partnering initative
295
10. Set up new brand management system
302
11. Implement a world-class marketing plan
308
12. Manage seasonality reduction initiative
325
13. Elaborate the Wise Tourism Index
331
14. Foster carbon footprint reduction
338
15. Launch “Made in Cyprus” and “Soul of Cyprus” initiative
347
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Chapter 9. 9.1
3
Enabling Initiatives
Enabling Initiatives
354
16. Create the Competitiveness Unit inside the NTA
355
17. Reengineer the legal and regulatory framework
359
18. Start human capital initiative
369
19. Run airline partnership initiative
382
20. Install a new governance system
389
21. Transform tourism system management
397
22. Launch performance monitor
403
Chapter 10. Separate Action Plans A.
Product/Segment
411
B.
Priority Source Markets
503
C.
Improvement of the Quality
549
D.
Cyprus Brand
570
E.
Seasonality Reduction
587
F.
Integrated Spatial Tourism Development Plans for Major Tourism Areas
606
Chapter 11. Economic impact of the Plan 11.1. Contribution of tourism growth to employment
812
11.2. Contribution of tourism growth to the GDP
816
11.3. Impact on tax revenue
825
11.4 Impact on the sustainability and quality of life of the Cypriots
826
11.5 3 different growth models for Cyprus
827
Part D.
Implementing the Strategy
Chapter 12. Strategy implementation 12.1 Institutional framework for the implementation of the CTS
834
12.2 Phased implementation
848
12.3 Overall Action Plan for the implementation (OAPI)
849
12.4 Major implementation milestones and roadmaps
855
12.5 Investment programme
857
12.6 Key success factors for implementation
869
12.7 Critical activities for the upcoming 24 months
872
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Glossary of Terms
879
List of Acronyms
882
Bibliography
886
List of Figures
893
List of Tables
899
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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 workshop 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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Chapter 0 Introduction 0.1
Current situation and expected results
0.2
The Strategy elaboration process: approach and methodology
0.3
The structure of this report
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0.1
7
Current situation and expected results 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 2,5 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 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 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.
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0.2
The Strategy methodology
elaboration
process:
approach
9
and
The Cyprus Tourism Strategy has been designed through a four-step process: envisioning and strategic analysis, strategy formulation, strategy planning, and strategy implementation. This methodology is highly compatible with the Strategy Map and Balanced Scorecard approach, as designed by Kaplan & Norton from the Harvard Business School. The chart below shows the main components of each phase: Figure 1. The four phases of the project
Throughout the process, a series of research and interactive tools were critical for the development of the strategy:
a.
Cyprus insight Site inspection trip. A 5-day tour of the country performed by 7 THR experts, to gain first-hand experience of Cyprus and to see it within the frame of tourism. The field visit was a key element of the research phase, as it provided the team with an overall picture of Cyprus and an understanding of how Cyprus performs as a tourism destination. Meetings with local stakeholders. These personal interactions were a valuable tool in getting the opinions, concerns, impressions, and expectations of key industry stakeholders in regard to the Cyprus Tourism Strategy. The following meetings were organised: •
17 sectorial and territorial workshops, totalling 114 participants.
•
33 one-to-one in-depth interviews.
For more details regarding the Interviews and workshops please refer to Appendix 1. Working sessions. Held with the Project Management Team, the Sounding Board, and the CTO at various times. •
The Project Management Team (two 2-day sessions).
•
The Sounding Board (1 half-day session). Based on professional prestige, leadership and expected contribution to the strategy, 20 key stakeholders were invited to form this select group. It was conceived as a discussion forum to test out ideas and proposals to assess their relevancy and feasibility, the endorsement of its members allowing the strategy to be more easily implemented.
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•
10
The CTO (1 week-long session). A one-week session was held with CTO key personnel, so as to understand the tourism products, markets, and stakeholders’ roles, assist a critical self-reflection of the CTO performance to generate key learnings for the organisation and collect know-how and opinions. To do so, both personal one-to-one interviews and focus groups were organised.
Technical literature and reports. Over 200 documents were consulted and analysed, covering areas including international tourism demand, consumer trends, product and segment trends, seasonality, connectivity, human capital, investment, planning and development, marketing, and branding, etc.
b.
Market research Interviews with collaborators: airlines and tour operators. These in-depth interviews aimed at evaluating professional opinions on Cyprus, analysing its competitive position and identifying the main issues faced by the Cypriot tourism industry. The following interviews were organised: •
31 tour operators in 5 selected source markets.
•
10 airlines in main source and key markets.
For more details regarding the Interviews with tour operators and airlines please refer to Appendix 2. Brand adoption research. Further research was conducted to characterise the adoption process of the Cyprus tourism brand at every stage: awareness, interest, evaluation, trial, and adoption. Additionally, a series of questions were asked to evaluate customer perceptions of Cyprus, to identify competitors or to identify the most important factors when selecting a travel destination. To do so, 1,716 interviews were conducted in 6 main source markets: United Kingdom, Germany, France, Sweden, Norway, and Russia. TravelStat competitiveness index. Based on a total sample of more than 4,000 interviews with travellers in Spain, Portugal, Greece, Croatia, Turkey and Cyprus, an evaluation of the competitiveness of the tourist experience in Cyprus was performed, including an assessment of the Cyprus customer journey. Online questionnaires to CTO offices abroad. Each of the CTO offices abroad was sent an online questionnaire, to gain insights on market efforts in each specific market, and to gather feedback on the strategy’s development. For more details please refer to Appendix 4. 17 Country reports. In-depth analysis of the following source markets: UK, Germany, France, Russia, Sweden, Denmark, Italy, Ireland, Ukraine, Norway, Switzerland, Poland, Israel, India, China, USA, and UAE. This was used to identify opportunities and threats of Cyprus in the source markets assessed. To see the source markets reports, please refer to Appendix 5. 7 Market segment reports. Analysis of 7 strategic products/segments to assess the opportunities that Cyprus has, in order to compete successfully in them. These market segments are: Sun&Sea, Itineraries & Culture, Cycling, Sport stages, Meetings, and events.
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0.3
11
The structure of this report This document contains the Cyprus Tourism Strategy, which is structured in 4 main parts (A, B, C, and D), 9 chapters and some appendices, as follows: Part A. Envisioning and Strategic Analysis: focuses on establishing the vision, identifying the key issues that work for or against it, and specifying the objectives that the Cyprus Tourism Strategy should achieve. •
Chapter 1. Envisioning includes a brief description of Cyprus’ tourism sector today and its growth potential, formulates the vision, and introduces the guiding principles for the development of tourism in Cyprus.
•
Chapter 2. Analysis of Cyprus as a tourism destination shows what has been done to understand the strengths and weaknesses of the sector that should be taken into account when establishing the strategy.
•
Chapter 3. Market forces affecting tourism focuses on markets, consumers, collaborators, and the competition with a specific objective in mind: identify opportunities to increase revenue, diversify markets, improve competitiveness, etc., as well as detect threats that could jeopardise successful strategy implementation.
•
Chapter 4. Key issues to be tackled performs a SWOT analysis of the tourism sector in Cyprus. From this, the key issues that must be addressed in order to achieve the objectives of the strategy are identified.
Part B. The Cyprus Strategy presents the criteria for creating the strategy and dictates how competitive advantages can be created in order to successfully compete in the sector, whilst also ensuring better financial and social performance. •
Chapter 5. The Core Strategy develops a clear formation of the goals to be achieved, the key competitive advantages to be created, and the market segments and source geomarkets to be targeted. It also explains the Premium Destination Strategy recommended for Cyprus.
•
Chapter 6. Outcomes, Strategy directions and Objectives. This part highlights the main outcomes of the Strategy, the Direction Statements that the Strategy will follow and its corresponding Strategic Objectives.
Part C. The Strategic Plan is proposed where the gap between Strategy and implementation is bridged. Details on the targets and strategic initiatives that make the Plan effective. It offers a visual representation of the Strategy Map and presents the initiatives included in the 4 Driver outcomes of the Strategy, as well as the 2 Enabler outcomes •
Chapter 7. The Plan, the Strategy’s connection to its implementation is demonstrated by way of the Balanced Scorecard, which, alongside each of its strategic objectives, establishes the measures, KPIs and above all the initiatives and actions that must be carried out to achieve the KPIs. We then summarise the essential elements of the 6 Separate Action Plans, which develop other initiatives that make up the Plan in a more detailed way.
•
Chapter 8. Driving Initiatives. The initiatives on the first 5 outcomes of the strategy presented in detail with the actions to be implemented, the stakeholders involved, the budget and the timeframe of its implementation.
•
Chapter 9. Enabling Initiatives. This section presents the initiatives of the outcomes 6 and 7 of the CTS, with a detailed action plan.
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•
Chapter 10. Separate Action Plans. This section includes three Separate Plans requested by the Terms of Reference and three more plans developed voluntarily by THR as added value.
•
Chapter 11. Economic impact of the Plan describes the impact that tourism development will have on the socio-economic and environmental systems of Cyprus in the coming years. It reveals the future contribution of tourism to the GDP of Cyprus, and the very significant contribution to employment for young Cypriots that tourism will bring. It also shows what hard and soft investments need to be made by the public and private sectors, as well as its distribution by cluster. It also explains the decisions and actions that must be executed immediately in order to launch an efficient and precise implementation of the strategy, and identifies the stakeholders to be engaged.
Part D. Implementing the Strategy: Another section that ensures effective strategy implementation, as it outlines the institutional framework required to successfully carry it out. It also underlines the financial effort required, and the benefits that an effective use of the strategy will have for Cyprus; it proposes the roadmap for implementation and highlights the risks to be managed, showing the best path to take. •
Chapter 12. Strategy implementation shows the roadmaps and their milestones that are to be reached over time, and the initiatives to use to reach them. It also highlights the budget needed by the public and private sectors in order to perform these initiatives. The key factors required for effective implementation can be found here, as well as the main risks associated with the project and the mitigating actions to be implemented.
Appendices: The Cyprus Tourism Strategy has a number of annexes which provide valuable information about important subjects, explain the methodology used to analyse the situation and to provide final conclusions and recommendations.
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Part A Envisioning and Strategic Analysis 1.
Envisioning
2.
Internal analysis
3.
External analysis
4.
Key issues to be tackled
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Chapter 1 Envisioning 1.1
The current situation and its challenges
1.2
Growth potential of tourism in Cyprus
1.3
Growth scenarios
1.4
Mission, vision, and guiding principles
1.5
Change agenda
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The first part of this chapter hopes to outline the current situation of the Cyprus tourism sector, as well as its potential for future growth. THR has a proposed vision that highlights the types of tourism that Cyprus wishes to compete in, the goals to achieve, and the timeframe in which to reach them. Some guiding principles that will inspire tourism in the country will be presented, as well as showing the best way of transforming the existing model.
1.1 a.
The current situation and its challenges More tourists who spend less: a misleading recovery International tourist arrivals in Cyprus totalled 2.66 million in 2015, a figure which comes very close to those recorded in 2000 and 2001 – years marking the record high which has yet to be surpassed. Figure 2. International tourist arrivals in Cyprus 2000-2015 and 2016 projection millions
The January – July 2016 period has reconfirmed and enhanced 2015’s good performance, recording a 19.8% increase over the same period in the previous year. If this trend is maintained, the 3 million international tourist arrivals threshold will be reached in 2016.
3 2,5 2 1,5 1 0,5 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Source: CYSTAT data
b.
Stabilisation of international tourism’s total revenues over the last 3 years International tourism revenues have recorded a continuous growth from 2010 (except for 2014), remaining at a standstill slightly above the €2 million mark over the last 3 years. In the January – June 2016 period revenues have increased 13.7% over the same period of 2015.
Figure 3. International tourism revenue, 2010-15 2.250 2.000 1.750 1.500 1.250 1.000 750 500 250 0 2010
2011
Source: CYSTAT data
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2012
2013
2014
2015
CYPRUS TOURISM STRATEGY
c.
Decline of the average expenditure per person/trip The negative side of the current recovery is represented by the fall of the average expenditure per person/trip which has fallen from €865,7 in 2013 to €828.8 in 2014 and €794.2 in 2015. Projections for 2016 do not seem to be much better, owing to the fact that the average expenditure per person/trip in the January – June period was lower (€662.2) than that registered in the same period in 2015 (€705.6), according to the latest data published by CYSTAT. In other words, Cyprus is receiving more but less yielding tourist.
d.
16
Figure 4. Average expenditure per person/trip (Euro) 1000
865,7
900
828,8 794,2
782,1
800 713,2
731,3
700
600 2010
2011
2012
2013
2014
2015
Source: CYSTAT data
An important sector of the Cyprus economy is showing alarming symptoms of competitive decline Therefore, the current recovery (in terms of international arrivals and incomes) does not hide the weaknesses of Cyprus’ tourism sector, which have been exposed by a stagnation period of nearly 15 years, and which have seriously compromised Cyprus’ competitiveness and longterm sustainability. •
The significant growth of tourism arrivals and revenues during the 1980s and 1990s, with a peak of 2.7 million arrivals in 2001, was followed by a rather static performance, with arrivals reaching 2.4 million in 2014, a 9% drop compared to 2001.
•
In the same period, by contrast, substantial increases in international tourist arrivals were registered in the world (64%) and Europe (46%), according to UNWTO data. Cyprus was the weakest performing country among EU competitors and neighbouring countries, according to World Bank statistics.
•
The contribution of the main sub-sectors of tourism, i.e. accommodation and food services, dropped from 10% of real GDP in 2000 to 7% in 2013.
A variety of both internal and external factors have contributed to create this situation, but the harsh reality is that more than 40 years later, the structural problems and weaknesses hampering the competitiveness and sustainability of the Cypriot tourism industry remain unchanged. Or worse, they have been exacerbated. Examples include: •
A focus on Sun & Sea tourism, which, as a result of fierce competition between both new and mature destinations, is becoming increasingly price-dependent;
•
Overdependence on the UK and Russian markets, which account for more than half of total tourist arrivals;
•
Strong seasonality limits revenues from tourism, which in turn may lead to an overcrowding issue during peak periods, an underuse of existing tourist infrastructure in off-peak periods, labour market issues, and reduced business’ profitability, etc.
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•
The low profitability of tourism businesses represents an obstacle towards reinvestment in facility renewals, quality improvement, knowledge acquisition, innovative processes, and so on, all of which directly lead to service quality deterioration and ageing infrastructure;
•
Low product diversity, the lack of a strong and varied brand, and the limited effectiveness of marketing still remain unresolved weaknesses of Cypriot tourism;
•
Finally, probably the most important weakness is the inability to implement and achieve a more competitive and sustainable tourism development. The lack of comprehensive planning is the likely cause of the problem.
The risk of falling into a vicious cycle All of these indicators show that Cyprus is on the cusp of falling into a vicious cycle, as a consequence of a long period of stagnation. Even though the recovery which began in 2015 has been confirmed in 2016 (based on the preliminary figures for the first half of the year), the risk of falling into such a cycle has not yet been overcome. Figure 5. Vicious cycle of competitiveness of a tourism destination
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1.2
18
Growth potential of tourism in Cyprus Cyprus has both the internal and external conditions necessary to overcome this competitive slump, and to grow in a profitable and sustainable way.
a.
Market growth potential The growth potential of Cyprus is determined by the following factors: •
Growth of international tourism demand. According to UNWTO data, the number of international tourist arrivals will grow at a rate of 4,6% annually until 2025.
•
Europe will continue to be the main region for both inbound and outbound international travel at a rate of 4% annually.
•
The Mediterranean will remain the favourite travel destination for travellers from Europe and other regions of the world, and will grow at a rate of 4,4% annually. Figure 6. Main source markets for Mediterranean destination by 2025 (millions) Germany United Kingdom France Netherlands Russia United States Italy Switzerland Austria Belgium
44,3 40,1 26,3 12,4 12,4 10,4 10,3 9,4 8,3 7,6
Figure 7. Arrivals to Mediterranean by destinations in 2025 (millions) 97,7
Spain
69,6
Italy
62,8
Turkey
37,4
Greece
22,3
Croatia Cyprus
4,3
Malta
3,0
Montenegro
2,4
Source: Tourism Economics
b.
Internal growth potential The internal growth potential of Cyprus is determined by the following factors: •
With around 2,5 million international tourists per year, Cyprus is far from reaching its full potential of tourist density regarding space and population.
•
With a total of around 85.000 beds, the resulting ratio of 100 habitants per km 2 is below what is considered critical.
•
The accommodation capacity of Cyprus operates at an annual rate of 60% occupancy, providing a significant margin for growth.
•
The reduced levels of activity in the off-peak and shoulder seasons offer plenty of room for growth.
•
The low market shares of Cyprus in the main source markets, in particular the European markets (apart from the UK), present a wide margin of growth.
•
Forecasts based on the results of market research carried out by THR in six of the most important source markets for Cyprus show that there are an estimated 24.7 million potential tourists for the country.
•
Cyprus’ tourist marketing has not been efficient up until now, and the implementation of a better strategy would contribute to an increase in demand in the tourism industry.
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19
Growth scenarios Cyprus can take advantage of the growth potential in several ways, and to a varying degree. To illustrate the various alternatives, THR has developed 5 scenarios based on different assumptions, applied to 5 key variables that determine growth in demand. These variables are: 1. Increase of income in source markets: Analyses show a close relationship between the rates of available income and the tendency to travel. The study of growth trends in different economies allows for a defining an interval of sustained annual growth rate, ranging from 0,5% to 3,0%. 2. Increase in tourism related investment: Investments in creating and improving facilities, infrastructure, environment, etc., has a direct impact on the demand growth. According to THR’s estimates, a reasonable interval for annual investment growth would fall between 1,5% and 4,0%. 3. Increase in tourism promotion and communication: Setting up a policy of communication, promotion, public relations, and advertising, is fundamental for increasing demand. THR’s analysis indicates that a plausible interval of annual growth should remain between 1,0% and 3,5% in different international markets. 4. Market stability: Any positive changes in demand diversity will encourage a better average expenditure. THR estimates that the annual variation could fluctuate from an annual expenditure decrease of 2% to a positive increase of 2%. 5. Branding Effect: Any positive changes to Cyprus’ international recognition will contribute to the arrival of tourists representing a better average expenditure. THR estimates that the annual variation could reach up to a 20% increase. Table 1. Factors and variation intervals proposed for the scenarios Influential factors
Variation intervals
Real income Increase in source countries [Annual GDP ∆%]
{0,5 – 3,0%} Annual increase percentage Elasticity (α) = 1,40
Role of investment in Cyprus tourism supply [Annual investment ∆%]
{1,5 - 4,0%} Annual increase percentage Elasticity (ε) = 0,25
Effect of promotion and communication expenses [annual ∆% budget] Effect of market stability [∆ average daily expenditure and average stay] Influence exerted by the power driver of the boom caused by the improvement of branding
{1,0 – 3,5%} Annual increase percentage Elasticity (π) = 0,18 {0,98 – 1,02} Index considering 1,00 the base/normal situation {1,02 – 1,20} Index considering the current situation = 1,00
Rationale The extreme values of the interval have been set by different official organisations and study centres. Evaluation according to current investment possibilities and their known effects regarding elasticity (Tourists/Supply Investment) Calculations based upon the known budget capacity and its effects on tourist demand (Tourists /Promotion) Hypothesis based on other experiences, for different destinations and products Based on explanatory studies of alterations, disturbances and motivations in tourism caused by changes in image
Following these hypotheses, THR has created a simulation platform that generates 2025 and 2030 Cyprus projections for 5 scenarios to evaluate the demand, expenditure, and overnight stays of international and domestic tourists:
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Table 2. Assumptions per scenario (annual variations) Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
1. Available Income (AI)
0,5%
1,0%
2,0%
2,5%
3,0%
2. Tourism Investment (TI)
1,5%
2,0%
2,5%
3,5%
4,0%
3. Cyprus Promotion (CP)
1,0%
2,0%
2,5%
3,0%
3,5%
4. Source Markets Stability (MS)
0,98
0,99
1,00
1,01
1,02
5. Branding Effect (BE)
1,02
1,05
1,07
1,10
1,15
The relative likelihood of each scenario has been assigned by experts using the DELPHI method. The goal of this method was to reach a consensus based on a discussion among experts, which has been that scenarios 3 and 4 are the most likely to occur. The following tables contain the relevant output for the scenarios 3 (S3) and 4 (S4), which were considered the most likely to occur, together with an intermediate one as the average of both (S3-4). Table 3. Tourism demand projection 2025- 2030 (million) 2015(1) International tourists Day Visitors Domestic tourists Total Tourists
2025
2030
S3
S3-4
S4
S3
S3-4
S4
2,656 0,12(3) 1,297(2)
4,176 0,190 1,282
4,488 0,204 1,315
4,799 0,218 1,3467
5,059 0,230 1,357
5,587 0,254 1,409
6,116 0,278 1,460
4,073
5,648
6,007
6,3637
6,646
7,250
7,854
(1) CYSTAT
(2015) 2014 Annual data on domestic and outbound trips of Residents of Cyprus (3) CYSTAT 2014 – Statistics on Movement of Travellers (2) CYSTAT
Table 4. Overnight stays projection (million) 2015(1)
2025
2030
S3
S3-4
S4
S3
S3-4
S4
International tourism Domestic tourism
13,01 4,49(2)
39,42 7,18
42,37 7,36
45,31 7,54
47,75 7,60
52,75 7,89
57,74 8,18
Total Overnight Stays (3)
17,50
46,60
49,73
52,85
55,35
60,64
65,92
CYSTAT CYSTAT 2014 (3) No distinction is made between accommodation types (hotels/apartments, licensed/unlicensed) (1) (2)
Table 5. Tourism expenditure projection at constant 2015 prices (million Euro) 2015(1)
2025
2030
S3
S3-4
S4
S3
S3-4
S4
International tourism
2.160
4.409
4.737
5.066
5.340
5.898
6.457
Domestic tourism
191(2)
342
351
360
362
376
390
Total Tourism Expenditure
2.351
4.751
5.088
5.426
5.702
6.274
6.847
(1) (2)
CYSTAT CYSTAT 2014
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These projections indicate that there is a potential for Cyprus tourism to grow by 2030, taking into account the international demand trends and the combined effect of a National Tourism Strategy enhancing current OECD source markets and existing products. The projected rates of tourism raise several issues regarding additional resources that will be required, in terms of accommodation and employment. However, these figures can be considered as a maximum potential of tourists for Cyprus. The Premium Destination Strategy for Cyprus is aimed at higher spending that will produce higher gains and more positive impact on the Cypriot economy. One significant effect of this strategy will be a reduction in the number of visitors, as less Low-Cost and Mass market tourists will visit Cyprus thanks to price elasticity.
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22
Mission, vision, and guiding principles Based on interviews, workshops and discussions with the Project Management Team that have involved over 200 people, we have developed the mission and vision statements below, which we feel reasonably represent the feelings of the stakeholders involved in the planning process.
a.
Mission Statement This defines why Cyprus is in the tourism business and communicates the fundamental purpose of the destination, especially what it provides for citizens and beneficiaries. Mission Statement Offer the world memorable tourism experiences and improve the quality of life of the Cypriots
b.
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 inspiring greater confidence in their future.
Vision Statement The vision statement defines the mid-to long- term (five to fifteen year) goals of Cyprus as a Tourist Destination in a market-oriented way. The 2030 Vision of Cyprus as a tourist destination is as follows: 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 destination
•
Time frame: By 2030
Additional goals to the stretch goal The vision for 2030 includes, as complementary goals, developing a tourism sector which is:
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23
Guiding principles The vision is accompanied by 5 ‘Guiding Principles’ that should inspire all future decisions made on product, development, communication and management. They should act as a permanent point of reference when evaluating any decision related to tourism in the country. 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. The 5 components are: 1. Make Cyprus a “Premium” all year-round holiday destination. Based on quality and excellence, with a target of 55% for “Premium” tourism. This is what has helped Cyprus to succeed in the past. 2. Give great importance to local heritage, cultural expressions, and natural environment. A ‘Cyprus made of plastic’ will never be competitive or profitable. The authentic Cyprus has a very large market. 3. Develop an excellent offer for certain Special Interest niches. In order to succeed, concentrate only on a few aspects but make sure they are very well developed – the market is very profitable, but it demands a very high level of quality throughout. 4. Support investment oriented towards reducing seasonality. Whether this refers to domestic, foreign, large, or small investors. 5. Expand formulas to optimise tourism’s multiplier effect on the local economy. The aim is to reduce imports and encourage consumption of local products: handicrafts, foodstuffs, textiles, etc.
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Change agenda Communicating and broadcasting the need for transformational change to all the players involved is no easy task. To do so, the change agenda compares the current status, organisation, capabilities, and processes of Cyprus as a tourist destination, with what it needs to become over the next 10 years. Thus, the change agenda for Cyprus is established as such: Figure 8. Cyprus’ strategic change agenda
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Chapter 2 Analysis of Cyprus as a tourist destination 2.1
The Tourism Cluster 2.1.1 Cyprus tourism areas 2.1.2 Main components of the cluster 2.1.3 Current product portfolio 2.1.4 Cyprus’ customer base
2.2
The Cyprus brand and the customer journey competitiveness 2.2.1 An analysis of the Cyprus brand 2.2.2 Customer journey’s competitiveness 2.2.3 Destination value chain assessment according to TravelSat
2.3
Cyprus’ competitiveness indicators 2.3.1 Overall performance indicators 2.3.2 Travel & Tourism Competitiveness Index 2.3.3 Regulatory framework 2.3.4 Opinion of Airlines & Tour Operators 2.3.5 Capacity for growth and diversification 2.3.6 Confidence in the sustainability of Cyprus’ tourism model
2.4
Assessment of Cyprus’ poor performance in traditional markets
2.5
Main conclusions and implications for Cyprus 2.5.1 Main competitive weaknesses 2.5.2 Main competitive strengths 2.5.3 Main implications for Cyprus
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This second chapter provides an internal analysis of Cyprus as a tourist destination. It reviews Cyprus’ strengths and weaknesses, which give a good sense of its key competencies. The analysis is focused on Cyprus’ strategic assets and product portfolio, the competitive performance of the tourism cluster and the power of the tourism brand. We finally provide our main conclusions and highlight opportunities and desirable improvements to be made to help meet the requirements of potential customers.
2.1
The Tourism Cluster and its brand Cyprus’ strategic assets include its attractive tourist areas, the variety of activities that can be performed there, the network of service providers and collaborators that make the entire experience possible, and the customer base.
2.1.1
Cyprus tourism areas Cyprus has a wide range of tourist attractions spread across its terrain. Besides the well-known coastal regions, inland areas on the island also have potential to attract tourists. THR has analysed the country’s tourist attractions by dividing it into 13 main areas of interest, as illustrated in the figure below: Figure 9. Cyprus main tourist areas Development areas
Clusters
Nicosia Paralimni
Marathasa
Polis
Troodos
Kathikas
Omodos
Ayia Napa
Larnaca
Zygi
Pafos
Mazotos Pissouri
a.
Eastern region
a1.
Paralimni (Protaras & Pernera)
Limassol
Paralimni (Protaras & Pernera) is known for its high-quality water and sandy beaches, Fig Tree Bay being the most famous. Paralimni is also known as a family oriented destination, and over the years it has grown into a sizeable modern tourist cluster, with many high-capacity hotels, hotel apartments, restaurants, pubs/bars, and associated facilities. Its main attractions are Cape Greco, one of the most beautiful natural places on the island, and Protaras, also known as one of the most popular diving destinations in Cyprus and the Eastern Mediterranean.
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a2.
27
Ayia Napa Ayia Napa is one of Cyprus’ most popular, and famous, tourist clusters. With 14 ‘Blue Flag’ beaches - the most famous being Nissi Beach - it is a haven for beach and water sports enthusiasts, particularly younger tourists. Whilst it caters for tourists of all ages and tastes, it is mainly known for its beach parties and nightlife. The cluster contains more than 80 bars and 12 nightclubs, some of which feature headlining UK and international acts. Resort and beach activities are further augmented by the adjacent Cape Greco headland, which attracts visitors interested in sightseeing, cliff-jumping, bike-riding and a variety of other activities.
a3.
Larnaca (City) Larnaca is the third-largest city in Cyprus. Its key tourism assets are Foeticides’ Promenade, the Church of Saint Lazarus, Hila Sultan Tekke, Kamares Aqueduct, its medieval fort, and the Salt Lake. Larnaca is home to the country's main airport, Larnaca International Airport. It also has an important seaport (passenger and cargo) and a marina (currently the subject of a redevelopment analysis and planning).
a4.
Larnaca (Mazotos and Coastal) Mazotos and its coastal areas lack quality beaches but still have their charm, and are wholly representative of Cyprus. Mazotos is predominated by agricultural fields with intermittent small-scale developments, primarily including residential real estate. The area gives the impression of having entered rural, agricultural Cyprus, with the hype and activity of Larnaca city and its international airport well and truly left behind.
b.
Western region
b1.
Limassol (City & Suburbs) Limassol (City & Suburbs) is the second-largest urban area in Cyprus, its de-facto ‘commercial capital’, and its major sea port since 1974. Despite its industrial drivers, tourism is still an important sector in the city. In recent years, Limassol has experienced a construction boom fuelled primarily by the tourism sector, and the development of the new marina, one of the country’s largest projects for many years. The Government has also been proactive in the city, investing in infrastructure improving the quality of life of both residents and tourists.
b2.
Avdimou-Pissouri Avdimou-Pissouri is located 30 kilometres west of Limassol, between Limassol and Pafos. In the Pissouri Bay area, the most renowned properties are the Columbia Beach resort (one of Cyprus’ leading luxury-standard hotels), and the Columbia Beach Hotel (4*). Avdimou Bay is even more interesting as a prospect, with one of the best quality stretches of unspoilt beaches in Cyprus. As Avdimou is not in one of the specific militarised areas, it is believed that its coast can be developed for tourism purposes.
b3.
Pafos (City and Suburbs) Pafos is well-known for the ruins of the Roman Governor's Palace with its fine mosaics. The city is included in the official UNESCO list of cultural and natural world-heritage treasures. Tourists visiting Pafos, who are primarily made up of families and couples looking for Sun & Sea holidays, can arrive directly to the city thanks to Pafos International Airport, the country's second-largest airport. Pafos has been selected as a European Capital of Culture for 2017 and this is expected to give the city a tourism boost. Updated version 23.03.2017
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b4.
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Polis (Neo Chorio & Limni bay) Polis is a small town located in the north-west end of the island, at the centre of Chrysochous Bay, and on the edge of the Akamas Peninsula. Polis is served by the fishing port of Latchi, a year-round attraction, renowned for its fish taverns, water sports facilities, and boat rides to locations on Akamas. Another great advantage of Polis is its proximity to the Akamas Peninsula, an area of outstanding natural beauty and home to famed attractions such as the Baths of Aphrodite, Lara Bay, and the Avakas Gorge.
b5.
Akamas (Kathikas) Kathikas is one of the ‘Laona’ villages (a non-profit organisation aiming to help introduce agro-tourism into Cyprus). It is situated on a plateau 23 kilometres north of Pafos, at an altitude of 645 metres, and on the edge of the Akamas Peninsula (National Park). It is well known for its grape production, most notably sultana grapes. It is also said to have ‘a flourishing agrotourism industry’.
b6.
Omodos Omodos has a distinctive charm and ambience, provided by its cobblestone square and paths, its mix of traditional taverns, and more modern bars housed in traditional buildings, a very limited supply of accommodation, and an important 17th century stone-built monastery. The village is situated on Cyprus’ Wine Route 4 (Krasachoria of Lemesos), and is famous for its wine production, with an annual wine festival to showcase its quality.
c.
Mountains & Lowlands region
c1.
Troodos Due to its altitude, the mountain is covered in snow during winter and is a popular resort for skiers during the skiing months. During the summer, the area is visited by all kinds of tourists, keen to take a break from the heat down at sea level, and to walk through the forests on one of the nature trails, or enjoy the waterfalls and surrounding views. The mountains are understood to be unique in their geology and richness of flora and fauna, hence their name. They contain as many as 750 species of plants, and a variety of wildlife species.
c2.
Marathasa Valley The valley is about 65 km from Limassol, north of Mount Olympus, and extends into the Nicosia and Limassol districts. Marathasa is the highest inhabited valley in Cyprus, and home to a total of 12 villages, including Prodromos, Lemythou, Tris Elies, Kalopanayiotis and Moutoullas. It is also home to the Trooditissa and Kykkos Monasteries. The valley undoubtedly has great tourism potential, and many natural attributes.
d.
Nicosia (City and Suburbs) Nicosia has been the capital of Cyprus since the 10th century. The city has established itself as the island's financial capital and international business centre. In 2012, Nicosia was the 5th richest city in the world in relative purchasing power. The city has a long history; however, the current political situation is a challenge that limits its leisure tourism potential in many ways. The inland geographic location also limits potential on an island whose main tourist attractions are first and foremost its warm climate and beaches.
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2.1.2 a.
29
Main components of the cluster Overall vision of Cyprus’ tourism cluster The tangible and intangible value that Cyprus as a destination generates is based on a combination of a wide range of natural and cultural attractions, infrastructure, and services. Value is delivered in a diverse range of attractions and resources. Cyprus’ beaches constitute one of the highest value tourist assets of the country, with 350 kilometres of coastline and the cleanest water in Europe. 59 Cyprus beaches have been awarded with Blue Flags by the European Commission.
Figure 10. Cyprus’ attractions and resources
Nonetheless, it is true that Cyprus possesses a wide array of historical & cultural attractions, which total 125 and are easily accessible due to the country’s size. 3 of these have been recognised as World Heritage sites by the UNESCO. Value production is supported by a well-developed industry. Based on the Tourism & Travel Competitiveness Index (WEF 2015), Cyprus has excellent tourist service infrastructure, as it ranks second out of 141 countries.
Figure 11. Cyprus’ tourism infrastructure
From a strong road network to marinas and ports that provide a source of leisure services and water-based activities, Cyprus has welldeveloped tourism facility infrastructures.
UK
A wide array of service providers help tourists to experience the country. The Cyprus tourism network brings together a group of professionals with extensive experience and ‘know-how’ in tourism business management (travel agencies, tour operators, accommodation facilities, food & beverage, information offices, etc.).
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Figure 12. Cyprus’ tourism services
CYPRUS TOURISM STRATEGY
b.
30
Main attractions Cyprus’ main tourism market is Sun & Sea, which has been the driver of tourism development in the country. However, besides Sun & Sea, Cyprus has the possibility to offer a variety of attractions in other segments, such as culture, heritage, nature or outdoor activities. According to the analysis, 12 out of 40 attractions are related to Heritage. Heritage attractions have a limited appeal when they are not managed properly, as the most attractive activities for tourists travelling to Mediterranean destinations are related to Sun & Sea. The main things to see and to do in Cyprus per region are detailed in the table below: Table 6. Some top attractions to see and things to do in Cyprus per region Things to see & to do
Region
Nicosia
Larnaca
Limassol
Pafos
4 4 3 3 2 1 4 4 3 3 2 2 1 1 4 4 3 3 2 2 1 1 4 4 3 3 2 2 1 1 4
Cyprus Museum Cyprus Taste tour Ledra street Kykkos Monastery Omeriye Hammam Shacolas Museum Church of St Lazarus Phinikoudes Beach Mc Kenzie Beach Choirokoitia Hala Sultan Tekke Zenobia Wreck Camel Park Larnaca Castle Ancient Kourion Kourion Beach Fasouri Watermania Limassol castle The Promenade Caledonia waterfall Sayious park Kolossi Castle Pafos archaeology Eagle mountains Aphrodite brewing Coral Bay Petra Tou Romiou Tombs of the kings Avakas Gorge Ayio Neofytos Church Profitis Elias
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Categories Heritage Beach
Culture
Nature
Outdoor
Wellness
4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
4 4 4
CYPRUS TOURISM STRATEGY
Things to see & to do
Region Famagusta
(southern part)
Fig Tree Bay Makronissos Beach Cape Greco Caves of Ayia Napa 2 Waterworld Park 1 Diving Centres 1 Napa Monastery Total (40)
31
Categories Heritage Beach
4 3 3 2
Culture
Nature
Outdoor
Wellness
4 4 4 4 4 4 4
4
12
7
7
6
5
1
Source: Rating based on the analysis of 10 Top Tourism Guides and THR’s site inspection
Accommodation supply and spatial distribution On the supply side, even if the last decade recorded a steadily declining trend in the number of licensed tourist beds, the net bed occupancy has fluctuated at around the same level. Overall, it is fair to say that in recent years, Cyprus has been eroding or losing its competitive advantage, which is potentially threatening the successful sustainability of the tourism industry in the long term. A steadily declining trend in the number of licensed tourism establishments and a sharp decrease in the number of beds. Over the last decade, the overall accommodation capacity has been reduced by 11,6% (losing over 11.000 beds since 2005). In 2015, there was a total of 788 tourist accommodation units, with an overall bed capacity of 84.529.
Figure 13. Accommodation establishments and number of beds, 2000–2015 1000 800 600
618
955 96.535
788 95.000 90.000
40091.422
84.529
200 0
Establishments
Source: CYSTAT
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85.000 80.000 75.000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
c.
Beds
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The districts of Ammochostos and Pafos together constitute over two-thirds of the accommodation offer (63,8% of total bed capacity). Ammochostos is the district with the highest bed capacity (41,3%) whereas Pafos has the greatest number of accommodation units (33,8%). Famagusta stands out due to a high concentration of hotel apartments and tourist apartments. Most tourist villas are concentrated in Pafos, where tourist villages (resorts) are also important.
Figure 14. Accommodation capacity (2015)
Source: CTO
Hotels are the most common lodging in the island 63,5% of tourists stay in hotels (42% in 4stars), followed by hotel apartments (20,1%). Tourist villages come third (7,2%) and tourist apartments after that. Finally, “others�, which includes traditional houses (agritourism), furnished apartments, hotels without stars, guesthouses, and campsites, represents 4,7% of the total accommodation per number of beds.
Figure 15. Share of accommodation types per nÂş of beds Tourist Apartments 4,7%
Tourist Villas 1,5%
Others 4,7%
Tourist Villages 7,2% Hotel Apartments 20,1%
Hotels 63,5%
Source: CTO
In terms of hotels, 4-star properties are the most common type 4-star hotels represent 39,8% of the offer (per number of beds). 3-star hotels follow with 30,1% of the bed capacity and 5-star hotels have 21,6%.
Figure 16. Hotel beds distribution by category (2015) 2* 6,8%
In units, 3-star hotels are the most common establishment, representing 30,1% of the total.
5* 21,6% 3* 30,1%
Source: CTO
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1* 1,8%
4* 39,8%
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Net bed occupancy rates have decreased 12% and fell to 59,8% in 2015
During the first six months of 2015, net occupancy fell by 12,2% over the same period as the year before, standing at 45,9%. Per accommodation category, tourist villages have the highest occupancy (57,4%) and hotels stand at 47,7%. By district, Ammochostos experienced the highest occupancy (55,7%) followed by Pafos (46,8%).
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Figure 17. Yearly net bed occupancy rate 2000-2014 (%) 100.000
80
74,1
95.000
59,8
60
90.000
40
85.000
20
80.000
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
The net bed occupancy rate has been fluctuating at around 60% over the previous years, despite the number of beds reducing significantly (by over 10.000 rooms in the last decade).
Beds Source: CYSTAT
Occupancy
CYPRUS TOURISM STRATEGY
2.1.3
34
Current product portfolio After assessing the tourist areas and the accommodation supply in Cyprus, THR carried out a portfolio analysis to identify the current tourism product situation. A predominance of Sun & Sea Sun & Sea is, in terms of volume of demand, one of the preferred types of holiday worldwide and clearly the largest segment of demand for which Cyprus has adequate and attractive resources (an excellent climate all year-round, a Mediterranean island atmosphere, a long coastline, diverse beaches, etc.). Sun & Sea has been the driver of tourism development in the country, leaving little room for the thriving development of other alternative products. According to Hermes Airports, in 2015, 95% of international tourists admit that Sun & Sea was their main reason for choosing Cyprus as destination1, while 90% of visitors admit that during their holiday, Sun & Sea was the most practiced activity (multiple choice question)2.
Table 7. Main activities done in Cyprus Sun & Sea
90%
Entertainment / Nightlife
39%
Shopping
36%
History and culture
28%
Sport activities Day cruises Conferences
19% 10% 8%
Agrotourism
5%
Weddings, honeymoons
5%
Other
15%
Source: Hermes Airports Ltd., 2015
This is both the cause and consequence of a poorly differentiated product, that does not generate sufficient profit and faces a competitive environment based on price and seasonality, and a younger demand who mainly buys package holidays. This is because almost the entire tourism business network is built around this activity, focusing on a Sun & Sea clientele that does not necessarily match the requirements of other types of customers. Depending exclusively on Sun & Sea leads to related issues such as seasonality, service quality deterioration and a decline in the island’s overall value because of the extremely tough price competition existing in the Sun & Sea segment. A limited role of other products / segments The current product portfolio lacks diversity. Other market segments have been developing gradually but slowly, and only minor hints of markets such as Culture, Nature, MICE, Wine & Gastronomy, Wellness, can be observed. However, these are at an early stage of development, requiring much more effort so as to become competent and profitable.
1 2
Opening the vault of tourism in Cyprus, PwC Cyprus, 2015. Departing passengers’ profiling, Hermes Airports Ltd. & Pulse Marketing Research, 2015.
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2.1.4
35
Cyprus’ customer base The following section describes the island’s customer base: the consumer profile, key traveller motivations for visiting the island, the main source markets, and consumers’ preferred destinations in Cyprus. Awareness on the core of the customer base provides insights about the tourism industry in the country.
a.
Tourism purpose Holidays are by far the most important reason to visit Cyprus. Even though the ‘holiday’ purpose has gone from representing 88,8% of total international arrivals in 2005 to 81,3% in 2015, in absolute terms this is practically the same number of arrivals: 2,19 million in 2005 and 2,16 million in 2015; that is, a decrease of 1,5%. The lower impact relative to the total of arrivals can be explained by the 160% increase in visits from family and friends between 2005 and 2015, now representing 13,5% of total arrivals compared to 5,2% in 2005.
Figure 18. Main purpose of visit to Cyprus 2005-2015 100,0% 80,0% 60,0% 40,0%
88,8%
78,9%
81,3%
2010
2015
20,0% 0,0% 2005
Holidays
VFR
Business
Source: CYSTAT
Cyprus has not successfully developed any relevant tourism business beyond Sun & Sea. Holiday trips are almost always related to the Sun & Sea product. The near absolute predominance of the Sun & Sea product is both cause and effect of the lack of product diversification and travel motives. As you can see on the figure on the right, the main activities that are carried out during the trip complement the main activity. For example, the activities related to ‘history and culture’ and ‘sport activities’ must be understood in this sense and not as a main reason for the trip. Only in cases of ‘conferences’, ‘agrotourism’ and ‘weddings / honeymoons’ can it be assumed that these are the main purposes of the trip, but their real weight is uncertain due to the openness of the question.
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Figure 19. Main activities done during the trip (multiple choice question) Sun & Sea
39%
Entertainment /…
36%
Shopping
28%
History and culture
19%
Sport activities Day cruises Conferences Agrotourism Weddings,… Other
90%
10% 8% 5% 5% 15%
Source: Departing Passengers’ Profiling, Hermes Airports (November 2015).
CYPRUS TOURISM STRATEGY
b.
36
Tourist profile Cyprus is losing repeat visitors. Directly relating to the increase in younger visitors, first-time visitors represent a large majority. If one considers that the number of repeat visitors is normally understood to be an indicator of a destination’s competitiveness, this is not a positive situation for Cyprus. In 2015, first-time visitors represented 58% of the total, with a 38% increase with regards to 2010.
Figure 20. First-time vs repeating visitors. Evolution 2005 – 2015 100%
On the other hand, repeat visitors (2 or more visits) went from representing 53,2% of the total in 2010 to 41,9% in 2015, a fall of 7,5%.
80%
Without doubt this is a result of the fall in arrivals from traditional markets, as well as the increase in the number of visitors from different markets, although their numbers are still reduced.
20%
48,7%
53,2%
51,3%
46,8%
2005
2010
41,9%
60% 40%
58,1%
0% First time
2015
Two or more times
Source: CYSTAT
The number of young visitors is on the rise and senior visitors are declining. Cyprus is losing senior clients, which is one of the age segments that is experiencing the highest levels of growth, especially in Europe. This fact can be explained by the fall in arrivals from the UK (-25,2%) and Germany (-38,6%) in the period 2005-2015. Visitors between 20-31 years old have increased by 54% between 2005 and 2015, going from representing 16,6% to 23,8% of the total demand. On the other hand, visitors between 45-64 years old have shown a declining trend, going from representing 34,1% in 2005 to 30,7% in 2015.
Figure 21. Evolution of international tourist arrivals by age of visitors, 2005-2015 40% 35% 30% 25% 20% 15% 10% 5% 0% 20-31 years 32-44 years 45-64 years 2005 2010 2015
Source: CYSTAT
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Other
CYPRUS TOURISM STRATEGY
37
Independent travel is losing popularity. After having achieved a relative balance between package tours and independent travel, in 2015 package tours were once again predominant, representing 62% of the arrivals, having grown by 40% from 2010. Independent travel went from representing 46% of arrivals in 2005 to 38% in 2015, but its actual volume only reduced by 2%. The predominance of package trips is coherent with ‘Sun & Sea’ holiday travel as a main reason for visiting Cyprus.
c.
Figure 22. Evolution of the type of trip 20052015 34,3%
65,7%
2005
Package
45,7%
38,1%
54,3%
61,9%
2010 Independent
2015
Source: CYSTAT
Main source markets More than a half of Cyprus’ visitors come from the UK and Russia. From the analysis, it becomes clear that Cyprus has developed an overdependence on two major source markets, the United Kingdom and Russia, which generate 60% of the total tourist arrivals to the country. The United Kingdom and Russia accounted for 59% of arrivals in 2015. Over the period 2005-2015, arrivals from the United Kingdom fell by 56%, while arrivals from Russia grew by 438%. Other source markets contributing with over 100.000 arrivals are Greece, Germany, and Sweden. These five source markets accounted for 72,4% of total arrivals in 2015. Meanwhile, markets such as Ukraine and France have entered the arena, but are not yet entrenched. That said, this dependency is significantly lower across the competitive set.
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Figure 23. Evolution of main source markets 2005 – 2015 (as % of total arrivals) 56%
UK Germany Greece Russia Sweden Israel
39%
7% 4% 5% 5% 4% 20% 4% 4% 2% 4% 22%
Others
24% 2005
Source: CYSTAT
2010
2015
CYPRUS TOURISM STRATEGY
38
Figure 24. Top 5 source markets across the competitive set Cyprus 28% 3% 4% 4% 20%
40 %
Spain 35%
Italy 23%
19% 11%
49 %
17% 4% 6% 15%
Greece
7%
7%
8%
63%
Turkey
11% 9% 7% 5% 5%
14% 62 %
9%
6% 5% 5%
UK (40%)
UK (23%)
Germany (19%)
Germany (11%)
Germany (14%)
Russia (20%)
France (17%)
France (11%)
UK (9%)
Russia (9%)
Greece (4%)
Germany (15%)
UK (8%)
Bulgaria (7%)
UK (6%)
Sweden (4%)
Italy (6%)
Switzerland (7%)
France (5%)
Georgia (5%)
Germany (3%)
Netherlands (4%)
Austria (7%)
Italy (5%)
Bulgaria (5%)
Other (28%)
Other (35%)
Other (49%)
Other (63%)
Other (62%)
Source: Tourism Economics
d.
Preferred destinations in Cyprus Tourist flows are highly concentrated in Pafos and Ammochostos. In terms of stays, Pafos is the preferred destination, with over a third of tourist stays (38,3%), followed by Ammochostos (28,5%).
Figure 25. Stay/overnights per destination (2014)
In terms of overnights, Ammochostos represents up to 47% of nights, followed by Pafos (32,4% of overnights).
Source: CYSTAT
e.
Preferred accommodation type in Cyprus A strong increase in the use of hotel accommodation. Accommodation in hotel establishments has experienced a steep increase, going from representing 47% of arrivals in 2005 to 59% in 2015. If you add this to accommodation in apartment-hotels and tourist villas, commercial accommodation represents 76% of arrivals. Other types of accommodation have noticed a decline in numbers.
Figure 26. Evolution of type of accommodation used, 2005-2015 70% 60% 50% 40% 30% 20% 10% 0% 1-5 star hotels
Hotel Apts, Friends & Owned Tourist relatives residence Villages
2005
Source: CYSTAT
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2010
2015
Î&#x;ther
CYPRUS TOURISM STRATEGY
2.2
The Cyprus promise competitiveness
and
the
customer
39
journey
This section examines two aspects which are key to tourist perceptions of Cyprus as a destination. On the one hand, Cyprus’ brand and its “power” is analysed. On the other, the island’s competitiveness in offering quality experiences to its visitors is evaluated.
2.2.1
An analysis of the Cyprus brand The Cyprus brand is made up of a combination of the quality of the experiences and services offered, collaborator credibility and service, and customer satisfaction. It is critical that the brand is differentiated, as it is used to create an image that attracts and persuades new tourists to visit the island. In order to analyse the Cyprus brand, it is key to first understand how the destination is perceived by its customers. The consumer perspective has been evaluated based on research carried out in 6 markets (the UK, Germany, France, Sweden, Norway, and Russia) with a sample of 1.716 interviewees, all over 18 years old, belonging to the upper four family income bands, and who will have taken at least one holiday abroad in the last three years. The main objective of this research was to characterise the brand adoption process for Cyprus in order to ultimately identify any gaps in each stage of the process. The research was extended to include other aspects of the travel habits of the interviewees, particularly their opinions about traveling and expectations with regards to Cyprus.
a.
Brand adoption process The multistage brand adoption process consists of a sequence of 5 key steps, allowing one to identify any impediments or gaps that may exist at different stages of the adoption process, as well as providing specific solutions so as to fill these gaps. These 5 steps are as follows: •
Awareness - measures the extent to which individuals are aware that Cyprus exists, at least as a destination.
•
Understanding - measures individuals’ knowledge of what the destination could offer regarding tourism, amongst those who are aware of its existence.
•
Attractiveness – measures the appeal that the destination has for those consumers who claim to have a medium-high level of understanding of what it can offer.
•
Affordability – measures the perceived accessibility to the destination in economic terms, for those consumers who believe it to be attractive.
•
Purchase intention – measures the intention to travel there in the short or medium-term amongst those consumers who are able to access the destination.
The results of the investigation into the creation of a brand for Cyprus reveal that a major reason for Cyprus’ poor performance is that in traditional markets, there is a low understanding of what the destination can offer to tourists. This lack of understanding logically results in less appeal and ultimately little or no intention to buy.
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The main brand problem Cyprus is facing is the dramatically low level of “destination understanding” For those who have not yet visited Cyprus, there is a huge gap of -78% between awareness of the destination and understanding of the tourism offer. However, the level of attractiveness is quite high, as 94% of those who understand the tourism offer find it to be attractive. Affordability is the subsequent gap creator, where a further 60% of potential demand is lost. At the final stage of the purchase decision chain, 37% of those who find it affordable decide not to visit Cyprus. The acquisition ratio, which describes how many tourists finally purchase, is significantly low for those who have not yet visited Cyprus, at just 5%.
Figure 27. Cyprus brand adoption process (No past visit to Cyprus)
Total universe
100%
Awareness
92%
Understanding
22%
Attractivness
94%
Affordability Purchase intention short/mid term
40%
63%
-8%
-78%
-6%
-60%
-37%
Source: Brand adoption survey Base: Those with no experience in Cyprus = 1.025
Cyprus’ appeal is noticeably higher amongst those who have previously visited the destination. 66% of those who have already visited Cyprus logically possess a higher level of understanding of the tourism offer. However, the fact remains that there is still 34% of people who have visited Cyprus in the past, who do not understand the offer yet – this represents an issue that must be dealt with. For those who have already visited Cyprus, affordability represents the biggest gap in the purchase decision chain, where 52% of potential demand is lost, from one stage to another. The acquisition rate for those that have visited Cyprus is double the average, at 26%.
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Figure 28. Brand adoption process (Past visit to Cyprus) Total universe
100%
Awareness
97%
Understanding
66%
Attractivness
95%
Affordability Purchase intention short/mid term
48%
85%
-3%
-34%
-5%
-52%
-15%
Source: Brand adoption survey Base: Those with experience in Cyprus = 691
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Russia is the source market where the process of creating a brand for Cyprus presents the best results. When the same analysis is performed per source market, Russia has the highest acquisition ratio with 31%. The second-highest source market by acquisition ratio is France. Considering that, historically speaking, France has a relatively low number of arrivals in Cyprus, this shows high market potential that needs to be further exploited. At 1%, Nordic countries have the lowest acquisition ratio, especially among those who have not yet visited Cyprus.
Figure 29. Acquisition ratios by source markets 31%
Russia
11% 20%
France UK Germany Norway Sweden
42%
11% 15% 21%
3%
11% 3% 6% 1%
32%
12%
3% 7% 1%
Total No past visit to Cyprus
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40%
Past visit to Cyprus
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b.
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Images and perceptions of Cyprus as a tourist destination In addition to the questions regarding the Brand Adoption Process, a series of other concerns were raised to gather information on the perceptions of Cyprus’ image and attributes. This investigation has also shown that the positive aspects of Cyprus are vague and confused. Although all respondents gave positive answers, many used the word ‘somewhat’ as shown in the following chart: Figure 30. “To what extent do the following statements apply to Cyprus?” Don't know
Not at all
It has nice scenery and beaches It is a mosaic of nature and culture It is easy to reach People are friendly
Not particularly 6%1%4%
Somewhat
Completely
43%
11% 1% 8%
6%1% 11%
17%
1%5%
47%
45%
35%
48%
34%
43%
34%
It offers multiple facets and attractions
10% 1% 7%
It has an outstanding cultural heritage
11% 1% 9%
47%
32%
It offers and aray of memorable experiences
11% 1% 8%
48%
32%
It provides good quality of information It is an affordable destination
18%
48%
1% 8%
10% 2%
14%
It offers a wide array of leisure activities
15%
0% 10%
It has rich gastronomy
15%
1% 11%
It is a safe destination
11%
3%
It is worth visiting in all seasons
12%
3%
1% 9%
It offers great value for money
14%
1%
It has good communication infrastructure It is not a crowded destination
Source: Cyprus brand adoption survey Base: All respondents = 1.716
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23%
13%
6%
28%
46%
27%
47%
27%
26%
49%
18%
14%
46%
46%
11%
It has high quality accommodation
33%
26%
42%
26%
50%
12%
26%
47%
1% 12%
25%
25%
42%
22%
38%
18%
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Cyprus’ brand is mostly associated with its natural and cultural heritage. Its scenery and beaches, natural and cultural mosaic, and outstanding cultural heritage, when both “somewhat” and “completely” answers are considered, have significant weight. From a more negative point of view, Cyprus is considered overcrowded. This does not come as a surprise, as what it has to offer for tourists is mostly focused around coastal areas. When the seasonality effect is also added into the mix, it is easy to conclude why this is the overall perception. Among the lower rated aspects of Cyprus’ brand perception are communication infrastructure and value for money. Based on this survey and other relevant sources, value for money is poor even in comparison with Cyprus’ main competitors. Figure 31. “What other aspects can you mention about Cyprus?” (open question) Positive aspects
Negative aspects
Climate / sun
39%
Beaches
18%
Landscape / nature
14%
Rich / interesting culture
12%
Friendly / warm people Good food / Gastronomy
10% 6%
Geopolitic problems / tensions with Turkey
24%
Too busy / touristy / overcrowded / noisy
13%
Expensive, unfavorable exchange rate
13%
Unsafe, crime, terrorism risks
10%
Too hot, unpleasant climate
8%
Too long flight, too far
6%
Flight connection / easy to reach
4%
Economic crisis / poverty
5%
Affordable / cheap
4%
Migrants, refugees presence
5%
Quiet / relax / peaceful
3%
Not enough sites / too small destination
Lots to see and do
2%
Language barriers
4% 2%
Source: Cyprus brand adoption survey Base: All respondents: 1.716
The analysis of the open questions asked provided similar conclusions with regards to both the positive and negative aspects relating to the brand. Once again, the results point out that natural and cultural heritage are the destination’s strongest assets and overcrowding and mass tourism its weakest. External political and socioeconomic issues threat Cyprus’ attractiveness However, several answers point out aspects that are related to geopolitical and socioeconomic issues, such as tensions with Turkey, crime, or refugees. Such perceptions are perhaps a result of current issues on a wider scale and do not affect only Cyprus. However, this issue needs to be managed properly, as personal safety is one of the primary reasons for choosing a destination.
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Nicosia and Larnaca are the first choices that come to mind. When asked about a destination in Cyprus, Nicosia and Larnaca are the first choices that come to mind, followed by Limassol. One concern is the fact that “Don’t know” answers were mentioned most of the time, as 36% of survey respondents said that they don’t know any destinations in Cyprus.
Figure 32. What Cyprus destination do you have in mind?” Nicosia
29%
Larnaca
29% 27%
Limassol
20%
Pafos
14%
Ammochostos (Agia…
9%
Troodos Other
1% 36%
Don't know
Source: Cyprus brand adoption survey Base: All respondents = 1.716
Cyprus is not clearly perceived as a member of the EU. Another aspect raising concern with regards to understanding and awareness is the fact that on average 40% of survey respondents answered that Cyprus is not a part of the EU or that they don’t know if it is.
Figure 33. “Is Cyprus a member of the EU?”
29% 13% Yes
No
59%
Don't know
Source: Cyprus brand adoption survey Base: All respondents = 1.716
Sun & Sea is by far the most popular type of trip to Cyprus (81% popularity). That said, there is high potential when culture & touring are paired up, as the two-combined amount to 55% in popularity. Nature & Adventure represents another potential for growth with 19% popularity.
Figure 34. “What is, according to you, a suitable trip to Cyprus?” Sun & Sea Culture 34% Touring 21% Nature 12% Nautical / Sailing 9% City Breaks 7% Adventure 6% Wine and… 6% Cruise 5% Wellness and… 4% Source: Cyprus brand adoption survey Base: All respondents = 1.716
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81%
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c.
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Perspective of CTO offices abroad THR approached 12 CTO offices abroad to obtain the professional opinion of the director on each market. The information obtained from 11 out of 12 offices was the result of a questionnaire designed to help formulate their comments and suggestions on the Cyprus Tourism Strategy, for their specific market. There are two different points of view regarding Cyprus’ brand performance in the markets where the CTO offices are established. On one hand, there are countries where awareness and interest is high, but desire or action decreases: Belgium, the Netherlands, Poland, Nordic countries, Switzerland. On the other, there are those where interest in general has been perceived as medium or low: France, Italy, and Ukraine. And then there is the United Kingdom, where the current state of the Cyprus tourism brand rated very high in all 4 concepts: awareness, interest, desire, and action. Table 8. Cyprus brand’s current status by market
Country
Awareness: attracts the attention of the customer
Interest: interests the customer
Desire: convinces customers and creates a desire to visit
Action: leads customers to act and purchase
3 1 2 1 3 3 N/A 4 3 4 2
4 2 4 1 4 4 N/A 3 3 4 2
2 1 3 1 2 3 N/A 3 2 4 2
1 N/A 2 1 1 3 N/A 2 2 4 2
Belgium France Germany Italy Netherlands Poland Russia Nordics Switzerland UK Ukraine
Note: Answer based on importance: 4-Very high; 3-High; 2-Medium; 1-Low Source: Questionnaire responded to by 11 of 12 CTO offices abroad.
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The attributes associated with the brand differ from one market to the other The different perception in source markets can be a symptom of a weak brand awareness. Table 9. Associated attributes per market to Cyprus’ brand Country Belgium France Germany Italy Netherlands Poland Russia Nordics Switzerland UK Ukraine
Rural Authentic Relaxing Spiritual Dynamic Overcrowded Traditional vs. vs. vs. vs. vs. vs. vs. Innovative Urban Artificial Exciting Material Static Exclusive 3 2 3 2 3 3 N/A 3 2 2 3
4 2 3 3 4 4 N/A 2 3 2 4
4 3 2 3 4 4 N/A 3 3 4 3
3 2 3 3 3 3 N/A 2 N/A N/A 3
3 2 2 3 3 2 N/A 2 N/A 4 2
2 1 2 2 2 2 N/A 3 3 4 2
3 3 3 3 2 4 N/A 3 3 2 3
Note: Evaluated from 1 to 4 in the spectrum between attributes. Source: Questionnaire responded to by 11 of 12 CTO offices abroad.
According to the CTO managers, the presence of Cyprus in the source markets is weak compared with its main competitors When CTO offices compared Cyprus’ presence in their market in comparison with other destinations, they recognised the budget differences amongst many of the destinations, while conscious that the Cyprus budget is limited. Even when Cyprus’ presence was rated as slightly active, they recognised, in most cases, the greater presence of other destinations like Spain, Croatia and Turkey (please refer to the table below).
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Table 10. Market presence of Cyprus in comparison with other destinations Country
Spain
Greece
Turkey
Italy
Croatia
Other
Cyprus
Belgium
Very active
Slightly active
Very active
Very active
Very active
N/A
Slightly active
France
Very active
Occasio nal
Very Active
None
Very active
Portugal Very active
Limited
German y
Very active
Occasio nal
Very Active
Slightly active
Very active
N/A
Slightly active
Italy
Limited
Occasio nal
Limited
N/A
Occasio nal
Netherla nds
Very active
Limited
Very active
Occasio nal
Very active
Poland
Slightly active
Slightly active
Slightly active
Slightly active
Slightly active
N/A
N/A
Russia
Occasio nal
Slightly active
N/A
Occasio nal
Occasio nal
Israel Slightly active
Slightly active
Occasio nal Very active
Occasio nal
Slightly active Very active
Occasio nal Occasio nal
Occasio nal Slightly active
UK
Occasio nal
Occasio nal
N/A
Limited
Slightly active
Ukraine
Occasio nal
Slightly active
Very active
Occasio nal
Slightly active
Nordics Switzerla nd
None
Malta Slightly active Malta Very active
N/A N/A Malta Slightly active Tunisia Slightly active
N/A Slightly active
Occasio nal Slightly active Slightly active Slightly active
Note: Evaluated from Very active, Slightly active, Occasional, Limited to None. Source: Questionnaire responded to by 11 of 12 CTO offices abroad.
Malta’s targeted marketing actions were mentioned by different markets as good practices in digital marketing, cross media marketing, social media, and special events. The country’s decisions have been perceived as quick and efficient. Co-marketing actions, where destinations joined with tour operators and airlines were also perceived as a best practice performed by the destinations that were mentioned.
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2.2.2
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Customer journey’s competitiveness After analysing the brand of Cyprus, there is now a need for a more focused evaluation of the competitiveness of the tourist experience in Cyprus, based on the opinions of visitors to the country. As modern travellers tend to define a destination increasingly based on the experiences they discover throughout the journey, destination “touch points” are becoming highly important. A destination “touch point” is any point of contact that might define the visitor’s travel experience and the overall perception of the destination. These “touch points” exist throughout the consumer journey, from booking the trip to getting back home. These include, but are not limited to: local hospitality, travel agents, taxi drivers, staff at local businesses, tour operators and guides, brochures, websites, guidebooks, and various services offered at Visitor Information Centres. The evaluation of Cyprus’ Customer Journey has been made based on the results of various investigations carried out by THR for the development of this strategy, in conjunction with: •
TravelSat Competitive Index of Cyprus
•
Consumer research in six main source markets carried out by THR (UK, Russia, Germany, France, Norway, Sweden).
•
A survey of 30 selected tour operators in six main source markets (UK, Russia, Germany, France, Norway, Sweden).
•
Departing Passenger Profiling, Hermes Airports (November 2015)
•
e-research on Social Networks
The whole process is described below:
a.
Booking the trip The “booking the trip” segment of the journey is highly important, as it allows potential travellers to “dream”, visualise and at the end, decide where to go on the next trip. According to a Hermes Airports report3, 70% of tourists organise their travel arrangements individually (airline tickets, accommodation and ground transportation are purchased separately through different sites). This segment is evaluated quite highly for Cyprus, in terms of both the availability and quality of information - mainly based on the CTO’s website, which contains a large quantity of the required information in high quality. Online presence is considered an asset, primarily on YouTube, which is very important for the “dreaming” part of decision-making. However, social media activity (Facebook, Instagram, etc.) is considered quite low. According to this same Hermes Airports report, only 5% of firsttime visitors learned of Cyprus through social media tools (friends and relatives being the main source with 52%). Furthermore, based on several interviews with key tour operators, it was pointed out that, in certain markets, the lack of availability of booking experiences and activities online represents an issue.
3
Departing Passengers’ Profiling, Hermes Airports (November 2015)
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Figure 35. Booking the trip
b.
Transport to the destination Transport to the destination represents the biggest issue, as it significantly affects the overall travel experience. A combination of limited connectivity off-season, together with a low share of scheduled flights, affects travel costs for individual travellers, hence significantly diminishing their chances to visit Cyprus. In comparison with main competitors, Cyprus is lagging significantly in this area. On the other hand, charter flights are available with travel costs that are considered low. This aspect (organised travel in general) is evaluated far above those of Cyprus’ competitors. Figure 36. Transportation to the destination
c.
Transport in the destination Public transport, both in terms of accessibility and overall hospitality, represents one of the biggest issues along the travel experience journey, significantly affecting the overall evaluation of transport in the destination. Public transport is evaluated significantly lower in comparison to the competitors, which puts more pressure on dealing with this issue. On a more positive note, hospitality at the country’s entry points, overall road infrastructure and airport access scored highly.
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Figure 37. Transport in the destination
d.
Feelings Feelings, as defined here, comprise the “soft” aspects of the destination that ultimately affect the overall destination experience. They include the environment, hospitality of the local population, visitor assistance and safety. Visitor information centres represent the largest area for improvement, as all aspects related to these have been evaluated lower than the rest. However, it is important to mention that scores have been similar across the competitive set. Understandably, landscape beauty is the highest evaluated aspect from the point of view of the traveller, followed by the local population’s hospitality and the sense of safety and security – aspects that are of utmost importance for travellers today. Figure 38. Feelings affecting the overall experience
e.
Accommodation experience Accommodation experience represents the highest evaluated segment of the experience journey, primarily due to accommodation quality, hospitality of personnel, and variety, which provides added value. However, due to the aging infrastructure and hotel rating system that does not necessarily reflect expectations, value for money is considered to be quite poor. Additionally, the number of international hotel brands operating within the destination is considered to be low. This is considered important from the point of view of the travellers, as it influences the perception of the destination.
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Figure 39. Accommodation experience
f.
Food experience Gastronomic traditions, based on the popular “mezze” dish, are quite important for travellers. Combined with the hospitality of personnel in bars and restaurants, there is an overall positive food experience in Cyprus. That said, travellers consider the diversity and quality of food to not be that high, especially in comparison with main competitors. Figure 40. Food experience
g.
Shopping experience Considered to be an “add-on” to the tourism industry, travellers’ shopping experiences can highly impact their experience as a tourist in the destination. In accordance with a PwC report4, shopping is the 3rd preferred activity while on holiday in Cyprus, preceded only by Sun & Sea and Entertainment & Nightlife. Personnel hospitality is once again considered to be quite high. The quality of handcrafts and souvenirs is also high, even when compared with the competition. Handcrafts and souvenirs are considered important, as they have a direct impact on the traveller’s brand perception, creating a lasting visual image in their mind. Once again, value for money is an important issue, followed by the limited range of shopping possibilities.
4
Opening the vault of tourism in Cyprus, PwC (July 2013)
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Figure 41. Shopping experience
h.
Experiences and activities Considered the most important segment of the customer journey, experiences and activities have the possibility of significantly impacting traveller’s journeys and their perception of the destination. Cyprus’ beaches are considered its biggest asset, rated by travellers as being beautiful and quite diversified. However, although it is evaluated highly, beach cleanliness is considered significantly lower when compared with Cyprus’ competition, which is quite odd considering that Cyprus has the largest number of Blue Flags per capita in the world (59). The diversity of historical sites and museums is also highly evaluated by travellers, which is not surprising considering Cyprus’ rich cultural and historical heritage. Although rich in natural, cultural, and historical heritage, there is a lack of diversified tourist activities in Cyprus. Consequently, guided tours & excursions are also rated quite low regarding quality and diversity. Both aspects are evaluated significantly lower than the competition, and they represent a priority for improvement. The aforementioned PwC study reveals that developing thematic experiences in relation to special forms of tourism would be the improvement that would most enhance Cyprus’ tourism product. Figure 42. Experiences and activities
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i.
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Getting back home Nowadays ‘word of mouth’ has a huge impact on potential travellers thus the “getting back home” segment of the journey is highly important. Surveys show that at the end of their trip to Cyprus their overall expectations are fulfilled, and that they perceive it to be good value for money. However, their intention of recommending the destination is significantly lower, and the post-trip follow-up on social media (TripAdvisor, Facebook, etc.) does not occur as often as it should. Figure 43. Getting back home
j.
Key findings The following chart provides an overview of the traveller journey, and evaluates each segment of the journey from the point of view of travellers experiencing Cyprus. Figure 44. Cyprus customer experience journey
Key findings from the travel experience journey analysis for Cyprus are as follows: •
The overall traveller journey experience has room for improvement.
•
Transportation, both to and within the destination, represents the biggest issue along the travel experience journey.
•
Accommodation experience is the highest ranked element of Cyprus’ customer journey.
•
When isolated from within each segment, the overall hospitality and friendliness of local people leaves a highly positive impact on customers’ experiences across all “touch points”.
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2.2.3
54
Destination value chain assessment according to TravelSat This analysis was based on a special output of the Competitive Index of the TravelSat survey, carried out on a total sample of more than 4.000 interviews with travellers in Spain, Portugal, Greece, Croatia, Turkey, and Cyprus (340 interviews).
a.
Cyprus TravelSat Index range The Competitive Index of TravelSat is built around 50 quantitative and qualitative indicators related to the different components of the tourism experience in a destination: accommodation, internal transport, cultural & leisure activities, monuments & heritage, local food, shopping, etc. The Cyprus experience equals or surpasses the competitive average on criteria analysed. Acting in a highly competitive environment where visitor story-telling plays a critical role in destination attractiveness, Cyprus delivers a highly competitive Mediterranean experience in general according to the survey results. Cyprus’ competitiveness indexes in the different criteria evaluated (accommodation, transportation, activities, monuments, etc.) fluctuates between 98 and 186, which means that the full trip experience in Cyprus has been considered acceptable or more than acceptable.
Figure 45. Cyprus TravelSat Index range
However, the analysis has shown that the most significant gap exists in local food quality, where Cyprus has scored lower than the competitive set average.
Source: TravelSat based
Figure 46. Destination value chain TravelSat Index 225 205 185
186
181 179
165
152
153
145
164
132
125
107
105
108
98
85
Cyprus
Competitive set (average)
Top Performers (detailed criteria average)
Source: Competitive Index of the Cyprus Tourism Experience, TravelSat survey Updated version 23.03.2017
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a1.
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In-depth assessment. When each segment of the value chain is analysed in more depth, significant gaps have been identified within each of the segments. The most significant micro gap was identified in the “Transportation in the destination” segment, where Cyprus was significantly lower than the competition’s average regarding public transport availability and hospitality. Other important factors that pose a threat include the diversity of cultural and leisure activities, diversity of historic sites and museums and the range of shopping possibilities. In conclusion, Cyprus enjoys strong competitive DNAs in various dimensions: •
Very friendly hospitality throughout the visitor’s trip, from both locals and tourism professionals.
•
Relaxing conditions for visitors including a strong feeling of safety, a clean environment and efficient assistance.
•
A competitive level of accommodation quality.
•
An enjoyable beach experience in a destination that is considered cost-effective to reach.
However, Cyprus could further strengthen its competitive position by acting with partners on the following: •
Access to more diversified cultural and leisure activities during the stay.
•
A food and shopping experience that maximises the value for money perception.
•
An exploration of the unique and most beautiful landscapes of the country.
•
Facilitation of public transportation for visitors.
The following table details the value chain analysis for Cyprus according to the specific indicators used. Table 11. Destination value chain assessment according to specific indicators Competitive Best Best set performer average performer value value
Cyprus value
Cyprus vs best performer
Accommodation Accommodation quality
168
Greece
185
176
-9
191
Greece
204
188
-16
165
Turkey
181
173
-8
Food overall quality
174
Greece
191
140
-51
Food diversity
152
Turkey
176
135
-41
Restaurant staff hospitality
189
Turkey
213
182
-31
Food value for money
165
Turkey
204
149
-55
Public transport accessibility
126
Spain
198
45
-153
Public transport staff hospitality
101
Portugal
123
80
-43
Accommodation staff hospitality Accommodation value for money Food
Transport
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CYPRUS TOURISM STRATEGY
Competitive Best Best set performer average performer value value 127 Turkey 162
Public transport prices
Cyprus value
56
Cyprus vs best performer
125
-37
Taxi service
67
Spain
90
83
-7
Parking convenience
44
Cyprus
82
82
0
Road infrastructure
92
Spain
143
84
-59
Airport access
156
Spain
205
145
-60
Hospitality at entry points (airports‌)
138
Portugal
160
147
-13
Signposting, orientation
100
Cyprus
129
129
0
Cost to reach the destination
113
Cyprus
150
150
0
Diversity of cultural and leisure activities
141
Turkey
165
101
-64
Guided tours and excursions
145
Turkey
183
115
-68
Theatres, cultural shows
76
Croatia
91
88
-3
Nightlife (bars, clubs‌)
133
Spain
167
114
-53
Price of leisure activities
78
Cyprus
122
122
0
222
Turkey
255
192
-63
181
Spain
206
176
-30
183
Portugal
201
180
-21
117
Cyprus
169
169
0
135
Cyprus
188
188
0
Range of shopping possibilities
132
Turkey
182
94
-88
Shopping value for money
106
Turkey
135
109
-26
Shops staff hospitality
145
Turkey
169
160
-9
Shops opening days/hours
169
Turkey
224
148
-76
137
Turkey
172
147
-25
Number of visitor info centres available
68
Croatia
107
74
-33
Visitor info centres staff efficiency
100
Croatia
121
116
-5
Visitor info centres opening days/hours
109
Croatia
134
105
-29
Tourist Offer
Diversity of historic sites and museums Sites and museums maintenance Sites and museums staff hospitality Sites and museums entrance fees Convenience for visiting, crowd Shopping
Quality of souvenirs
handicrafts
and
Information centres
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CYPRUS TOURISM STRATEGY
Competitive Best Best set performer average performer value value
Cyprus value
57
Cyprus vs best performer
Natural Environment Beach beauty
251
Turkey
290
249
-41
Beach diversity
190
Greece
205
186
-19
Beach cleanliness
181
Portugal
204
159
-45
Water activities
163
Turkey
206
164
-42
Beach safety for swimming
167
Spain
180
171
-9
Landscape beauty
261
Croatia
312
203
-109
Cleanliness in cities
151
Croatia
216
144
-72
Cleanliness outside cities
124
Croatia
182
130
-52
Urban architecture
131
Spain
161
135
-26
Local people hospitality
206
Turkey
229
177
-52
Ease of communication with locals
150
Croatia
167
141
-26
Safety feeling
173
Croatia
193
175
-18
191
Croatia
203
176
-27
Overall stay value for money
181
Turkey
197
167
-30
Intention to recommend
73
Croatia
79
57
-22
Intention to repeat visit
42
Spain
54
34
-20
Urban Environment
development,
Experience Overall fulfilment expectations
of
Source: Competitive Index of the Cyprus Tourism Experience, TravelSat survey
b.
Competitive management matrix. The following figure highlights a matrix that identifies the critical components of the competitiveness of the Cyprus tourism value chain, based on its current competitive performance and its impact on the competitiveness of the destination. This matrix is a tool for managing destination competitiveness, in which the components are split into 4 areas: •
Competitive DNA: this groups together the positive aspects of tourism in Cyprus that have a relatively high impact on competitiveness.
•
Improvement area: this gathers the components that have a relatively high impact on competitiveness but that Cyprus needs to improve.
•
Differentiate: this is a group of the factors that have a smaller impact on competitiveness and that are available in Cyprus.
•
Monitoring: these are aspects that have a relatively low impact on competitiveness and that Cyprus needs to improve.
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58
Figure 47. Competitive management matrix of Cyprus
Source: Competitive Index of the Cyprus Tourism Experience, TravelSat survey.
From the figure above it is concluded that: •
The competitive DNA of Cyprus is focused on offering a relatively cheap and safe destination with beautiful beaches in a clean environment, together with local hospitality, a diversified food offer and the possibility to stay in quality accommodation facilities.
•
In addition, the differentiate criteria in which Cyprus can be more competitive, are focused on the hospitality and comfort of the destination. For this reason, it is important to train and monitor skilled employees in order to continuously deliver the best value service to the tourist and maintain differentiation.
•
In order to increase the competitive performance, Cyprus should improve important areas such as food quality, food value for money, and especially the beach cleanliness and the preservation of landscapes, as these are key to sustaining Sun & Sea tourism.
•
Finally, other less important and competitive criteria for Cyprus are the public transportation price and hospitality, the public transport accessibility, and the diversity of the cultural offer.
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2.3
59
Cyprus competitiveness indicators This section identifies the competitiveness of the Cyprus brand and products, providing insights on the current performance of the tourism model established in Cyprus compared to the competitive set in the Mediterranean area.
2.3.1 a.
Overall performance indicators Arrivals Using as a reference the years 2000 and 2001, when the highest volume was achieved, international tourist arrivals in Cyprus have stagnated for a period of 15 years, with constant rises and falls from one year to the next.
a1.
International arrivals International arrivals have stagnated in the last 15 years. 2,66 million international tourists visited Cyprus in 2015. After a continued period of growth (1990-2000), numbers began dropping, reaching their lowest in 2010; since then, arrivals have recovered slightly, and by 2015 were almost as high as they were in 2000. Meanwhile, Cyprus increased their international arrivals from 2010 to 2015 by 12,4%, Southern / Mediterranean Europe grew by 24% and Europe in total by 19%. More importantly: while Cyprus has grown to recuperate its losses, other Mediterranean destinations have grown to increase their gains.
a2.
Figure 48. International tourist arrivals 19902015 (million) 2,69
2,66 2,47 2,17
2,10
1,56
1990
1995
2000
2005
2010
2015
Source: CYSTAT
Arrivals 2000 – 2015 compared to the competitive set. Cyprus’ performance in attracting new arrivals was significantly below the average of the competitive set In comparison with the competitive set, Cyprus’ performance in attracting new tourist inflows throughout the last 15 years was significantly below the average, resulting in a decline in tourist arrivals that has yet to be fully recovered (In 2015, it was close to 2000). Turkey saw a tremendous increase of tourist arrivals of +309% in the last 15 years, followed by Greece with a +80% increase.
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Figure 49. Index of tourist arrivals, 2000-2015
Source: Tourism Economics
CYPRUS TOURISM STRATEGY
a3.
60
Arrivals forecast (2015-2025) compared to the competitive set. Cyprus is expected to have a strong growth in arrivals by 2025 The tourist arrivals forecast, according to Tourism Economics, is expecting Cyprus to have a strong demand growth, which will lead to a 60% increase in the total number of arrivals by 2025.
Figure 50. Index of tourist arrivals, 2015-2025
In fact, the whole region of Eastern Mediterranean is expected to see a stable growth of tourist arrivals, with Greece and Turkey forecasted to grow by 60% and 58% respectively. Source: Tourism Economics
b.
Contribution of tourism to the national economy Revenues from tourism go hand in hand with international arrivals; however, the contribution of tourism to the economy (both in terms of GDP and employment) has diminished recently.
b1.
Contribution of tourism to Cyprus’ GDP The contribution of tourism to the GDP is declining. Over the last few years, the direct Figure 51. Direct contribution of tourism to the GDP (%) contribution share has fluctuated 15 significantly, dropping to its lowest at 4,9% 11,1 10,6 in 2009 (from 10,6% in 2001). 8,9 10
Since then, it has slightly recovered, 5 reaching 6,4% of Cyprus’ total GDP in 2015 (direct contribution 1.109 million Euro). The 0 1990 total contribution of tourism to the GDP stands at 19,3% (2015).
6,4
4,9
1995
2000 2005 2010 Percentage of GDP
2015
Source: Cyprus Report 2015, WTTC
b2.
Contribution of tourism to Cyprus’ employment The number of jobs in the tourist sector has decreased in the last 15 years. In 2015, Travel & Tourism directly supported 24.000 jobs (6,6% of total employment.)
Figure 52. Direct contribution of tourism to employment 50
According to the WTTC, this number increases up to 73.500 when considering total jobs (22,6% of the total).
24.120 6,61% 0 1990
1995 2000 2005 2010 Number of jobs % share of total employment
Source: Cyprus Report 2015, WTTC
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2015
CYPRUS TOURISM STRATEGY
c.
Expenditure
c1.
Average expenditure per person/trip
61
The average expenditure per person/trip descended by 8,3% between 2013 and 2015. After having reached a total of 865,7 Euro Figure 53. Evolution of average expenditure per person/trip 2005-2015 (Euro) in 2013, the average expenditure per person/trip has descended to 828,8 Euro in 900 866 829 2014 and 794,2 Euro in 2015, that is, a loss of 850 794 782 8,3% between 2013 and 2015. 769 800 750
The data published by CYSTAT in May 2016 696 shows that the average spending per 700 person/trip was 630 Euro, compared to the 650 675 Euro in the same period of 2015, i.e. a 600 fall of 6,8%.
731
746
697
713
731
Source: CYSTAT
c2.
Tourism revenue Other than 2014, revenue from tourism has risen by 39% since 2010.
2.300
2,5
2.000
2,2
1.700
1,9
1.400
1,6
1.100
1,3
800
1,0
500
Revenue (Mil. Euro)
Overall, in the period 2010-2015, tourist arrivals increased in Cyprus by 23%, while revenues increased by 39,4% during the same period.
Figure 54. Tourism revenue (2010-2015)
Arrivals (millions)
After a steady growth from 2010 until 2013, revenues from tourism reached 2.161 million Euro (12% of the GDP) in 2015, dropping only 2,83% in 2014 from the previous year.
2010 2011 2012 2013 2014 2015
Revenues
Arrivals
Source: CYSTAT
c3.
Expenditure per arrival 2000-2015 The expenditure per arrival is the highest among the competitive set In order to analyse expenditure per inbound arrivals, THR compared Cyprus’ performance with a competitive set’s (i.e. Greece, Turkey, Spain & Italy).
Figure 55. Expenditure per inbound arrival, 2000-2015 900 800 700
The analysis demonstrated that, despite the negative trend of the last 3 years, the expenditure per arrival in Cyprus is the highest among its competitors, with 720 Euro/arrival in 2015.
600 500 400
Cyprus
Average of the competitive set
Source: Tourism Economics
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c4.
62
Expenditure per night 2000-2015 The expenditure per night in Cyprus is the lowest among the competitive set The same competitive set was included to analyse inbound spending per night. Here, Cyprus’ situation is different. The island comes out on the bottom of the competitive set, with 145 Euro/night. This demonstrates the necessity of upgrading the tourism offer and offering higher value to tourists.
Figure 56. Expenditure per night, 2000-2015 240 220 200 180 160 140 120 100
Cyprus
Average of the competitive set
Source: Tourism Economics
c5.
Inbound travel spending 2000-2015 Inbound travel spending in Cyprus has decreased by 2% in the last 15 years Inbound travel spending in Cyprus has seen a similar trend as arrivals, decreasing by 2% in the last 15 years. In the same period, following their growth in tourist arrivals, the island’s main competitors have witnessed a growth in inbound travel spending. Turkey has seen the strongest growth of +189% over the course of 15 years. Figure 57. Inbound travel spending index, 2000-2015
Source: Tourism Economics
*2000 was taken as a base year
The main performance indicators, such as the number and development of arrivals, the average spending amount per tourist per trip, hotel occupancy rates and seasonality demonstrate that there is a loss of competitiveness in Cyprus.
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2.3.2 a.
63
Travel & Tourism Competitiveness Index Specific competitiveness in selected categories To assess the competitiveness of the travel & tourism industry in Cyprus, and compare it to the aforementioned competitive set, THR analysed the Travel and Tourism Competitiveness Index (TTCI), which comprises four sub-indexes, 14 pillars, and 90 individual indicators, distributed among the different pillars, as follows: Table 12. Pillars of the Travel and Tourism (T&T) index Pillars
Sub-indexes
1. Enabling Environment
2. T&T Policy and Enabling Conditions
3. Infrastructure
4. Natural and cultural resources
1.
Business Environment
2.
Safety and Security
3.
Health and Hygiene
4.
Human Resources and Labour Market
5.
ICT Readiness
6.
Prioritisation of Travel and Tourism
7.
International Openness
8.
Price Competitiveness
9.
Environmental Sustainability
10.
Air Transport Infrastructure
11.
Ground and port infrastructure
12.
Tourist service infrastructure
13.
Natural resources
14.
Cultural resources
Source: Travel and Tourism Competitiveness Report 2015, World Economic Forum
Table 13. Travel and Tourism (T&T) Competitiveness ranking Country
T&T Competitiveness ranking
Overall sector competitiveness
Spain
1
4
Italy
8
4
Greece
31
3
Cyprus
36
3
Turkey
44
2
Source: Travel and Tourism Competitiveness Report 2015, World Economic Forum
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Cyprus is ranked 36th worldwide (141 countries) and 20th regionally (Southern and Western Europe). The Mediterranean region, especially the European part, is a highly competitive region within the context of the global travel & tourism sector, as most of its destinations are positioned among the top 40 countries worldwide. Apart from Spain (considered to have the world’s most competitive T&T sector) and Italy, who are both positioned among the top 10 countries worldwide, Cyprus is well-positioned among its eminent competitors Greece and Turkey concerning its T&T sector competitiveness. Table 14. Cyprus’ position amongst the competitive set in the competitiveness pillars Higher than the CS
In line with the CS
Lower than the CS
• Business environment
• International openness
• Natural resources
• Safety and security
• Price competitiveness
• Cultural resources
• Ground and infrastructure
• Air transport infrastructure
• Human resources labour market
and
• Tourism prioritisation by the government • Tourist infrastructure.
port
• ICT readiness • Health and hygiene
service
Source: Travel and Tourism Competitiveness Report 2015, World Economic Forum CS: Competitive Set
However, it is important to mention that apart from the aforementioned competitors, countries such as Croatia (33 rd) and Malta (40th) are also considered to have a competitive T&T sector, which once again proves that the development and high competitiveness of the Mediterranean is on a global scale. To gain a more in-depth understanding of the T&T sector competitiveness index, as well as comparing Cyprus with the competitive set, we are reproducing the relative factors that form the overall score, as seen in the following chart.
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CYPRUS TOURISM STRATEGY
Figure 58. Travel & Tourism competitiveness indicators
Source: Travel & Tourism Competitiveness Report 2015, World Economic Forum Updated version 23.03.2017
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66
Cyprus’ position in each specific pillar of the competitiveness index has been analysed:
a1.
Business environment Cyprus’ business environment is the best across the competitive set. This is due to many different factors, primarily taxation effects – effects on incentives to work (Cyprus ranked 18th worldwide), effects on incentives to invest (21st) and total tax rate (20 th). However, the time required to deal with construction permits in Cyprus is by far the longest, and where Cyprus ranks 141st worldwide.
a2.
Safety and security Cyprus once again came on top when it comes to safety and security issues, which we can assume is primarily due to the size of the country and its isolation. Cyprus also scored high in business costs of crime and violence, being ranked 14th in the world.
a3.
Health and hygiene With regards to health and hygiene, Cyprus scored slightly lower than the average of the competitive set. This comes mainly as a result of the availability of physicians, where the competitive set, mainly Spain, Italy, and Greece, scored significantly higher.
a4.
Human resources and labour market In the human resources and labour market, Cyprus ranked 20 th worldwide, as both the qualifications of the labour force and labour market are higher than the average.
a5.
ICT readiness With regards to ICT readiness, Cyprus scored below the average of the competitive set, which can be divided into 3 groups (based on ICT readiness): Spain and Italy as leaders, Greece and Cyprus as followers and Turkey last. To improve the ICT readiness scores, Cyprus must work on its ICT use for B2B transactions, as well as increase the number of mobile subscriptions.
a6.
Prioritisation of travel and tourism The travel and tourism sector is highly prioritised in Cyprus, which is ranked 3 rd in the world in this field. This is primarily due to T&T government expenditure and the prioritisation of the sector, in which Cyprus scored higher than the competitive set. However, a concern that must be taken care of and managed is the country’s brand strategy, where Cyprus ranked 69 th worldwide, far below leaders such as Spain.
a7.
International openness Although close to the likes of Spain and Italy, Cyprus scored below the average of the competitive set in terms of international openness, mainly due to the openness of bilateral Air Service Agreements where Cyprus is ranked 126 th worldwide.
a8.
Price competitiveness Although close to the competitive set average, Cyprus’ score on price competitiveness was impacted by ticket taxes and airport charges, where only Italy scored lower, while Turkey for example ranked 22nd worldwide.
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a9.
67
Environmental sustainability Although the sustainability of travel and tourism industry development in Cyprus is evaluated highly (Cyprus ranked 25th worldwide) water issues, i.e. baseline water stress and waste water treatment, represent the biggest setback for Cyprus. On this issue, Cyprus is positioned last in comparison to competitive set.
a10.
Air transport infrastructure Air transport infrastructure is considered to be the biggest setback for Cyprus’ tourism competitiveness. This is mainly due to the quality of air transport infrastructure, where Italy is the only country from the competitive set that has a lower rating than Cyprus. Available seats/km (international) are also evaluated to be quite low (61 st), far from the competitive set (all ranked among the top 30 countries worldwide).
a11.
Ground and port infrastructure The road quality in Cyprus is quite high, with Spain being the only country from the competitive set ranking higher. However, in terms of the quality of the domestic travel network, Cyprus is ranked quite low, which is something THR has seen mentioned in several sources (e.g. TravelSat survey), and clearly an issue that must be addressed.
a12.
Tourist service infrastructure The presence of major car rental companies, the number of hotel rooms and the number of ATMs accepting Visa cards are all factors that significantly improve Cyprus’ ranking in tourist service infrastructure, where it is ranked 2nd worldwide, after Austria, leaving behind tourism industry powerhouses such as Spain (4th).
a13.
Natural resources Countries with natural assets clearly have a competitive advantage in attracting tourists. This includes the number of UNESCO natural World Heritage sites, the quality of the natural environment, the beauty of the landscape, the richness of the fauna and the percentage of nationally protected areas, which comprises the extent of national parks and nature reserves. In this competitiveness pillar, being ranked 84, Cyprus is clearly penalised by its small territorial dimension - close to Turkey but far from countries like Spain and Italy.
a14.
Cultural Resources and Business Travel In this competitiveness pillar, the number of UNESCO cultural World Heritage sites, the number of large stadiums that can host significant sport or entertainment events, the digital demand for cultural content and entertainment, and the number of international association meetings have been considered.
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b.
68
Competitiveness in selected tourism products/segments In a more specified approach, the compared competitiveness of the different destinations included in the competitive set has been evaluated in relation to a wide array of products/segments. This compared competitiveness evaluation is the result of the combination and consideration of perceptions and opinions expressed by visitors who have visited one or more of the destinations included in the competitive set, by professionals of the tourism industry, and by specific studies on the different product/segments, etc. Three important factors must be considered when correctly interpreting the results of this analysis: •
It is a comparative evaluation meaning that a destination is not considered to be competitive individually but rather in comparison to the other competing destinations.
•
It is a comparison based on what each destination is currently doing/exploiting and not what they are capable of in the future.
•
It is a subjective evaluation based on opinions, perceptions, and personal preferences, albeit from professionals in the tourism sector.
Taking all of this into account, the compared competitiveness can be assessed as follows: Table 15. Tourism product competitiveness as assessed by THR Products
Cyprus
Spain
Italy
Greece
Turkey
Sun & Sea
3
4
4
4
4
City breaks
1
4
4
1
4
Cultural & Itineraries
1
4
4
2
2
Nature & rural
1
2
2
1
2
Sports & adventure
1
2
2
1
1
MICE
1
4
4
1
2
Nautical
1
4
2
4
1
Religious
1
2
4
1
2
Medical & Wellness
1
3
2
1
2
Golf
1
4
4
1
1
Cruise
1
3
3
3
2
1
4
4
2
1
1
1
4
1
1
Scuba diving
3
3
3
3
1
Cycling
1
2
2
1
1
1
2
3
4
Gastronomy & Wine Weddings Honeymoons
&
Legend: Low competitiveness
0
High competitiveness
Source: Cyprus brand adoption survey and secondary research (primarily special interest tourism blogs, forums, and reports)
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Spain and Italy are clear leaders, as the analysis has shown that they have an average to high competitiveness across almost every product. Their position on the global tourism map is well-known, and is based on cities such as Barcelona, Madrid, Rome, or Milan; popular holiday destinations such as the Balearic and Canary Islands, Sardinia; cultural destinations such as Venice or Tuscany and globally renowned gastronomy, amongst other things. Greece and Turkey are considered to follow close behind and their tourism offer is based mostly on the ‘Sun & Sea holiday’ product as well as cultural heritage. Furthermore, Istanbul, in Turkey, is among the world’s most popular city break destinations, positioned as the city where “east meets west”. Apart from offering Sun & Sea, Cyprus has a low level of competitiveness in other forms of its tourism products. That said, scuba diving is considered a product in which Cyprus is highly competitive, mainly due to the Zenobia wreck, the most famous diving site in the area. This does not mean that Cyprus cannot increase its competitiveness with regards to products that are different from Sun & Sea. However, to do so, it is necessary to not only create and develop products for each segment of the demand with the minimum levels of quantity and quality to compete, but also to introduce and commercialise them adequately.
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c.
70
Digital Competitiveness Table 16.Competitors’ digital performance Concept Country Ranks and Ratings
Spain
Greece
Italy
Turkey
Cyprus
(68,1 M arrivals)
(23,6 M arrivals)
(50,8 M arrivals)
(39,2 M arrivals)
(2,7 M arrivals)
2nd World
25th World
10th World
16th World
69th World
1st Europe
11th Europe
4th Europe
8th Europe
27th Europe
Country Brand Strategy Rating6
AA
A
BBB
A
BBB
Brand baseline used
(Not using any at the moment)
Greece All time classic
(Not using any at the moment)
Turkey Home
Cyprus in your heart
Positioning
Diversity (what you want, what you need), but mainly beach destinations.
Sun & Sea, but impregnated with history and heritage.
A little bit of everything, from urban to seafront destinations, from art museums to ski stations.
A hospitable destination with beautiful landscapes.
An island rich in history and culture.
Variable Digital brand Rank5
• Seaside (153) NTO website
official Destinations
• Cities,
towns villages (160)
• Inland (81)
Products
• Main cities (47) & •
Greek islands (8)
• Mainland (7)
• North (8)
• Regions (7)
• Regions (6) & Cities
• Centre (4)
• Cities (19)
• Villages (56)
• South (6)
• Popular destinations• Rural (8)
• Island (2)
(Top ten for…)
• 13 categories:
• 10 categories:
• 8 categories:
• 11 categories:
• 10 categories
• Art
• Culture
• Nature & Wildlife
• Sun & beach
• Nature
• Routes
• Sea
• Art & History
• Action
sports adventure
&•
Sun & Sea
Bloom Consulting Country Brand Index 2014-2015. Tourism Edition. Bloom Consulting derives its annual Country Brand ranking from its own algorithm using only tourism-related variables. Measures: a) Tourism arrivals and growth; b) Digital demand with the online search volume for tourism-related activities and attractions; c) Accuracy with the NTO’s strategy; and d) Online performance with the web analytics and social media results. 6 Bloom Consulting Country Brand Index 2014-2015. Tourism Edition. The Country Brand Strategy Rating evaluates the accuracy of the strategy by each NTO. Measure its strategic and promotional positioning in accordance with the highest demand tourism-related keywords online searches. Note. AAA – Very Strong, AA – Strong, A- Slightly strong, BBB – Very Good, BB- Good, B – Slightly Good, CCC – Slightly Weak, CC- Weak, C-Very Weak. 5
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Concept
Variable
Spain
Greece
Italy
Turkey
Cyprus
(68,1 M arrivals)
(23,6 M arrivals)
(50,8 M arrivals)
(39,2 M arrivals)
(2,7 M arrivals)
• Nature
• Nature
• Culture
• Gastronomy
• Religion
• Events
• Sports (water, land, air)
• Sport • Health & Beauty • Nightlife
Incentives
• Learning
• Religion
&
• Gastronomy • Sports and Wellness
• City break
• Themed (Special Interest)
and
• Heritage
• Gastronomy • Meetings
• Business and Study Spirituality
• Touring
• Shopping
&•
Entertainment
Shopping
• Golf • Entertainment nightlife
• Food & drink • Health & wellness
Tourist segments
• Families
• Young people
• Youth
• Seniors
• Couples
&•
Food & Drink
• Weddings • Culture & Religion
• Cruise
• Learning
holidays• (Special Interest)
Thematic Routes
• Special Interest
• Not specified in their• Not specified in their• Not specified in their web
web
web
• LGTB • Adults
without
children
NTOs media
7
Social
Web visits7
1,30 M
328,80 K
747,50 K
22,20 K
57,20 K
Facebook likes
1,680 K
655 K
418 K
4,957 K
144 K
Twitter followers
228 K
64,1K
83,1K
787 K
11,3 K
Instagram followers
129 K
125 K
26,9 K
304 K
10,7 K
YouTube subscribers
10,9K
10,8 K
4,7 K
17,3 K
1,4 K
Total website visits on June 2016. Data from SimilarWeb.com
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&
Honeymoons
• Attractions & Culture • Golf
• Events &festivals • Families
• Sports & Training • Health & Wellness
• Active
• Special interest
71
CYPRUS TOURISM STRATEGY
Spain
Greece
Italy
Turkey
Cyprus
(68,1 M arrivals)
(23,6 M arrivals)
(50,8 M arrivals)
(39,2 M arrivals)
(2,7 M arrivals)
Digital Demand8 Keyword: travel to [country name]
30
25
36
30
5
Keyword: flights to [country name]
79
42
76
38
33
Keyword: [country name] hotels
55
34
72
29
16
Concept
Variable
Conclusions
The role in the competitive set
72
The leader
The doer
The underachiever
The unclear
The unrevealed
Spain is the “leading� destination in this competitive set, with the highest and most consistent numbers in terms of their digital performance. This is a destination to follow.
Greece is a good digital performer in this competitive set. Its website and social media have great numbers, considering their tourist arrival numbers.
Italy is not exploiting their maximum digital potential. With the tourist arrivals, they have and their high numbers in terms of digital demand, they should be performing better.
The strategy on Turkey’s website is fuzzy (Turkey Home and Go Turkey), so the outstanding numbers regarding their social media performance are somewhat confusing.
Cyprus still has great digital potential. They are at the beginning of their journey. Its performance numbers are congruent with the size of their tourist arrivals. A lot can be done.
Google Trends (annual average for 2015). Analysis of Google web searches that have been carried out for specific terms, relative to the total number of searches for the same term on Google over time. The data is displayed on a scale of 0 to 100 after normalisation and each point has been divided by the highest point in the specified period of time. 8
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2.3.3
73
Regulatory framework When it comes to tourism, a fairly large amount of laws and regulations directly govern their associated legislation. The legislative framework governing hotels & tourist accommodation, as well as catering and entertainment establishments, specifies that the Ministry of Energy, Commerce, Industry, and Tourism (MECIT) appoints two committees, i.e. the hotel committee and the catering establishment committee. These committees govern matters related to the classification of hotels and restaurants, the reclassification of existing units, approving plans, and applications for establishment of new units and refurbishment, extensions, renovations, improvements of existing ones, and other related manners. The Government is currently carrying out a study evaluating the tourism legal framework, in order “to rationalise legislative procedures, improve efficiency and reduce costs for businesses and consumers, considering best practices.” This task is of utmost importance, as instituting a regulatory framework that allows further flexibility and fosters innovation is key to forming a sound, attractive and competitive tourism industry. The study of the current situation has enabled THR to identify the following problems associated with the current legal framework: •
The various governmental bodies and authorities currently regulating and enforcing legislation in the tourism industry are not aligned, creating additional administration difficulties for businesses (i.e. CTO, Health & Safety, Town planning, local municipalities).
•
There is too much bureaucracy in obtaining licenses for accommodation/ entertainment establishments. Procedures for investment programmes are too complex and timeconsuming, which present a problem, as the investor/ entrepreneur has to go through many different procedures encompassing a variety of services in order to obtain a license.
•
Land ownership and environmental regulations generate issues with investments and developments in the Troodos area. The current incentive structure is not sufficient to overcome planning and environmental restrictions on tourist enterprise developments in the region.
•
The enforcement of planning restrictions and regulations on tourism enterprises is inconsistent and appears to be problematic in many areas. A lack of regulation and enforcement has contributed to the prevalence of visual pollution in tourist areas.
•
Property taxes and building coverage restrictions combined with bureaucracy related to licensing tourist establishments make investments in such developments unattractive to foreign investors. This represents a problem when it comes to the licensing of establishments, as the investor/ entrepreneur must go through complex procedures involving a large amount of governmental authorities in order to obtain a license.
•
The private sector has illegally developed, expanded and modified tourist establishments on a large scale, which they partly attribute to the current difficulty in obtaining licenses and following proper development procedures.
•
Tourist zones and planning restrictions are currently too restrictive for the profitability that investors are currently seeking when making large-scale tourism developments. There is little flexibility in current town planning to accommodate these developments.
•
The legal and political system safeguards collective bargaining labour agreements, which sometimes impose unreasonable or overly restrictive employment terms on the tourism industry, hindering competitiveness.
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2.3.4
74
Opinion of Airlines & Tour Operator towards Cyprus as a tourist destination THR has conducted an analysis based on the perceptions of two of the main stakeholders in Cyprus’ tourism industry. The opinions of tour operators and airlines provide valuable insights to better understand the current situation of Cyprus as a tourist destination
a.
Tour Operators To obtain an internal tour operator perspective on Cyprus as a tourist destination, THR carried out a survey with 31 tour operators chosen from the UK, Germany, France, Sweden, and Russia, made up of tour operators that already work in Cyprus, and some that don’t, as well as general and specialised ones.
a1.
Main perception The main perception of the tour operators interviewed by THR is that Cyprus is an attractive destination for the Sun & Sea market, but it has few differentiating attributes or remarkable competitive advantages when compared to its main competitors. In the Mediterranean region, there is fierce competition within the Sun & Sea market. Other mature destinations, such as the Balearic Islands or Greece, are more competitive than Cyprus in traditional Sun & Sea tourism. This fact is forcing Cyprus to enter into a price competition with cheaper and more competitive destinations, as concentrating the tourism model into only one market segment (i.e. Sun & Sea) reduces the overall market attractiveness and competitiveness.
a2.
Interest in Cyprus During the interviews, THR asked tour operators to assess the main aspects making Cyprus interesting and attractive as a destination. The analysis showed that tour operators’ main interests in Cyprus include the following aspects:
a3.
•
Security and a safe atmosphere
•
Warm & dry climate
•
Beautiful sandy beaches
•
Potential for a long season or even an all-year round destination
Room for improvement THR also asked tour operators to identify the main elements in which Cyprus could improve its performance. According to the analysis, the main aspects in which Cyprus has room for improvement according to the tour operators are: •
Insufficient air capacity & the low share of scheduled flights, especially during shoulder seasons.
•
Inefficient Sales & Marketing.
•
The old-fashioned style of accommodation facilities.
•
A poorly differentiated product and a lack of new products & experiences.
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Advices As per the shortcomings and deficiencies that they identified, tour operators from different markets agree, to a greater or lesser extent, with a need for progress in the following directions in order to recover and strengthen Cyprus’ competitiveness as a tourist destination: Air access: • Improve air access, especially during shoulder seasons. Accommodation facilities: • No more standard-quality mass hotels. Further development of the segment must follow the direction of quality over quantity. •
Develop concept hotels and boost small-scale charming accommodation inland.
•
Hotel prices should be more competitive.
Tourist product: • Upgrade the tourism product. •
Create outstanding experiences, particularly culture and nature related.
•
Develop winter products and experiences.
•
Address the excessive visual pollution and the issue of soulless architecture.
•
Address the loss of Cypriot local identity.
Branding and marketing: • Tourism authorities must be more committed to marketing, offering quicker and more flexible practices. •
Change the image of Cyprus into a modern destination with a diverse range of products.
•
Differentiate Cyprus’ image from that of its competitors, namely Greece.
•
A better understanding of online marketing possibilities.
•
Design more appealing promotional visual content and improve the quality of the collaterals and content that is generated.
•
Organise fam trips, informational events, training programs, seminars, and webinars.
•
A more active and executive role of CTO offices abroad.
•
Improving information and communication in B2B channels.
•
Improve information and collaboration with special interest tour operators.
•
Shift the offering focus from groups to individual travellers.
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Airlines One of the main reasons that explain Cyprus’ poor performance in the traditional source markets is insufficient air capacity, particularly during the shoulder and low seasons. With the objective of finding out more about this issue, THR interviewed 10 airlines currently operating in Cyprus based in the UK, Germany, Sweden, Norway, Greece, and Latvia. These interviews provided the opportunity to get to know their opinions and gather their insights, expectations and plans regarding Cyprus.
b1.
Main perception Based on the analysis of the interviews, the main perception of the airline companies is that Cyprus is an important destination and has potential for growth. This perception is reflected in airline plans to increase flight frequency, extending the season, and flying to new cities.
b2.
Interest in Cyprus During the interviews, THR asked tour airline companies to assess which were the main aspects that make the destination interesting and attractive, and which were the main sources of growth potential. The analysis of the interviews showed that the main tour operator interests in Cyprus constitute the following aspects: •
Warm weather all year round that could extend the summer season
•
A stable business environment and suitable for growth
•
Advantageous geographical position
For airline companies, these aspects will provide the following opportunities:
b3.
•
Increase current flight routes and scheduling
•
Establish new routes from additional cities
Room for improvement The analysis shows that the main causes of poor performance in traditional markets are:
b4.
•
A lack of awareness of Cyprus’ potential in the Sun & Sea market during low season
•
A lack of efficiency, response and cooperation from the Cypriot authorities regarding the handling of joint marketing activities
•
A need to increase product attractiveness as well as the diversity of experiences offered
•
A lack of destination brand differentiation
Advices To increase Cyprus’ attractiveness, the following lines of action were suggested: •
Establish an incentive programme to support airlines and winter flights
•
Support joint marketing campaigns to increase awareness in source markets
•
Greater support from the Cypriot authorities, as current collaboration is considered slow and complicated
•
Product enhancement
•
Change Cyprus’ brand image
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Capacity for growth and diversification During the last few decades, Cyprus has demonstrated an outstanding capacity to grow, with the number of tourist arrivals increasing by 2000% in 45 years. This growth has been noted especially during the 80s and 90s and was driven mainly by tourists seeking Sun & Sea holidays. That said, since the noughties, Cyprus has been unable to adapt its current model and thus react to the stagnation in tourist arrivals.
Figure 59. Cyprus arrivals (1970-2015)
Source: Tourism Economics
In the last 15 years, tourist arrivals have decreased by -1% in Cyprus, which means that the island must discover a new way to improve its tourism model performance. It is true that Cyprus has historically based almost all of its offer on Sun & Sea, which has weakened its product portfolio and not contributed to the perception of Cyprus as a ‘complete’ destination. So as to obtain a better perspective, a competitive set of similar Sun & Sea destinations was defined and the arrivals to each destination during the same period were analysed. Figure 60. Arrivals growth in the period 1970-2015 Cumulativ e growth 1970-2015 (%) Cyprus
Malta
2.001%
Malta
1.204%
Turkey
Costa del Sol
Cyprus
949%
Greece
Balearic Islands
Cumulativ e growth 1970-2015 (Mill.)
450%
1,6
Greece
4.906%
625%
2,6
Turkey
Balearic Islands
Costa del Sol
Source: Destinations’ National Tourism Boards and Tourism Economics
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33,3
14,2
12,2
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As illustrated in the chart above, in the period between 1970 and 2015, only Turkey had a greater percentage of growth than Cyprus. However, in terms of total arrivals, Cyprus had the second-lowest amount in the set, with only an accumulated 2,6 million arrival growth in 2015. Other destinations, like Greece, have a lower percentage of growth but significantly greater growth in terms of total arrivals, with an increase of 22,3 million arrivals in 45 years. Figure 61. Total growth and cumulative arrivals per decade (1970 – 2015)
Source: National Tourism Boards and Tourism Economics
If we analyse the performance decade by decade, each destination in the competitive set experiences different stages in the lifecycle. Destinations in the competitive set like the Balearic Islands, Greece, or La Costa del Sol, which matured prior to Cyprus, experienced greater growth than the Cypriot island in the last 15 years. In addition, Cyprus experienced a decline earlier than the rest, and did not follow the growth trend of previous years, being the only destination experiencing negative growth in the 20002015 period. It is important to mention that even though Cyprus only attracted 2,6 million tourists in 2015, in the 1970s it was yet to mature as a destination, with only 0,1 million arrivals (the lowest in the set). This means that - given that Cyprus is 29 times bigger than Malta but only received 53% more arrivals in 2015 - Cyprus could have great potential for growth.
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Confidence in the sustainability of Cyprus’ tourism model This section analyses the perception of and the confidence in the current model based on workshops, interviews, and interactions with industry stakeholders.
a.
Methodology To ensure that the Cyprus Tourism Strategy responds to the interests and expectations of the large majority of industry stakeholders, 17 workshops were organised during the month of April (11th – 22nd April 2016). These workshops were conceived as an opportunity for reflection, debate, and agreement, open to all key tourism players interested in taking an active role in the development of the Tourism Strategy, while generating support and commitment towards its implementation. 111 attendees participated in these workshops. Moreover, 33 personal interviews were organised during the month of April (4 th – 22nd April 2016). These interviews were performed to obtain a more in-depth perspective of the opinions and suggestions of key stakeholders and figures in the industry.
b.
Confidence in the current model There is a widespread agreement that the model is not sustainable for the future The analysis highlighted a broad consensus on negative issues and based on the comments made by a wide range of stakeholders it can be concluded that changes are required. According to stakeholders, the two main aspects that threatens the sustainability of Cyprus’ tourism model are seasonality and the air capacity. Firstly, the high seasonality of tourism activity leads to serious operational flaws in Cyprus’ tourism system. Among others, these include: •
An overuse of infrastructure and equipment in the summer and underutilisation during the winter, which affects business profitability and employment stability.
•
The overexploitation of attractions and saturation of tourist areas.
•
The overconsumption of water, electricity, and other utilities.
•
Pressure on the population.
•
Negative impacts on the destination’s image.
Air capacity remains inadequate (especially in winter) despite remarkable progress in recent years. It represents an obstacle to making progress in penetrating new markets and segments and extending the season to nine months between March and November.
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Elements affecting the future sustainability of the model There are more elements threatening the sustainability of the current model than sustaining it, which means that the current tourism model is not sustainable in the mid-short term. Apart from the two main aspects mentioned above, according to the stakeholders interviewed, there are many other identified elements that contribute to the poor perception of the future viability of Cyprus’ tourism model. That said, the stakeholders interviewed also agreed on the fact that Cyprus has positive attributes that could be drivers for a sustainable tourism model. In the table below a detailed list of the main elements that threaten the sustainability of the tourism model of Cyprus are presented, as well as the main positive factors that have allowed the destination to keep its attractiveness and competitiveness over time. Table 17. Main positive and negative aspects of Cyprus according to stakeholders Aspects threatening the sustainability of the current model
Aspects sustaining the current model
• Lack of planning at a national level
• Advantageous geographical position
• Regulatory framework (licensing and rating)
• One of the best Mediterranean
is
outdated
climates
in
the
• Lack of a leading, facilitating and accountable governance system
• Excellent natural and cultural attractions
• Lack of public-public and public-private cooperation coordination
• Human and financial resources
and
• Lack of national quality standards
• Multicultural environment • Extensive experience and know-how in tourism business management
• Insufficient and deficient strategic marketing (not market research based)
• A population accustomed to hosting foreign visitors who benefit from their friendly and welcoming nature
• Weak and undifferentiated brand
• A strong road network
• Lack of product diversification
• Good accommodation facilities
• Product quality degradation • High hotel operating costs (energy, interest rates, cost of importing supplies, etc.)
• The highest number of ‘Blue beaches per capita in the world
• Decrease in value for money due to high prices and low quality (compared with other destinations) • Loss of local character and personality in the tourism product • Local people feel disenfranchised and not included in the tourism industry • The tourism sector is no longer seen as an attractive professional option Source: Workshops, interviews, and interactions with the stakeholders
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Flag’
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Assessment of Cyprus’ poor performance in traditional markets The causes of Cyprus’ poor performance in traditional source markets have been analysed from the perspective of the consumer (brand adoption process) as well as the trade (opinions of tour operators and airlines). This information has been enriched by the numerous interviews conducted with key stakeholders plus additional research and literature review. Based on all these inputs gathered, Cyprus’ poor performance as a tourist destination is the result of a combination of various and diverse reasons related to the following: The weakness of the brand 31 tour operators of different source markets agree, to a greater or lesser extent, that there is a need for progress in the following areas: •
Changing the image of Cyprus into a modern destination with a variety of products.
•
Differentiate Cyprus’ image from its competitors, namely Greece.
•
Design more appealing promotional visual content and improve the quality of the collaterals and promotional content in general.
•
Improve collaboration with special interest tour operators.
Insufficient air capacity 10 companies that currently operate in Cyprus have been interviewed and the three main conclusions that can be drawn are: •
Airlines see growth potential in Cyprus and this is reflected in their future plans to increase the frequency of their flights, extending the high season, and flying to new cities.
•
There is a need to increase the product attractiveness as well as diversifying the experiences.
Airlines requested more cooperation from the Cypriot authorities, in particular regarding flexibility and speed, as competing destinations have proven to be more efficient in their handling of joint marketing activities. Low level of understanding of Cyprus as a tourism destination The results of the Brand Adoption show that understanding is the biggest gap creator, as 78% of potential demand is lost (no past visit to Cyprus). Even for those that have visited Cyprus before, this gap is still considerable, at 34%. Deterioration in the value for money proposal Based on the Brand Adoption, affordability represents the 2nd largest demand gap creator, as it decreases potential demand by 60% (no past visit). For those that have visited Cyprus, this aspect is even worse and their perception is still of a high-priced destination, as this gap is only reduced by 8%, standing at 52%. When asked directly about whether Cyprus offers a good value for money, only 25% of the respondents fully agreed with this statement. Inefficient Sales & Marketing It is generally considered that overall efficiency of Cyprus in the Sales & Marketing function needs to be improved. The view of tour operators for instance, is that the tourism authority needs to be more committed to marketing, offering quicker and more flexible practices.
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Limited use of digital marketing tools A comparative analysis shows that Cyprus does not use properly the possibilities that digital marketing offers, as its performance is below the other competing countries. Weak and undifferentiated image & identity The general conclusion with regards to the overall image & identity of Cyprus as a destination is that it needs to change and be developed to diversify Cyprus from its competitors. Insufficient air access Low share of scheduled flights, especially during shoulder seasons, represents a big issue. Such opinion was expressed by tour operators from most countries, with Russian tour operators being the only exception to the rule. Airlines see a good growth potential in Cyprus, but upon greater support from authorities and an incentive programme to fly off-season. Poorly differentiated product and lack of new products & experiences There is a common understanding that new current products and experiences must be developed. However, the overdependence on Sun & Sea and the high degree of similarity among the current tourist profile (young, package holidaymaker) could be the obstacle. Old-fashioned style of accommodation establishments Current mass market hotels are considered “things of the past�, as most tour operators believe that further development of the segment must go in the direction of quality over quantity.
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Main conclusions and implications for Cyprus 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.
2.5.1
Main competitive weaknesses Cyprus has significant weaknesses that must be considered and tackled to increase its competitiveness as a tourist destination: •
Low recognition of the Cyprus tourism brand. About 80% of potential tourists in the main source markets (except Russia and the UK) are unaware of what Cyprus offers them and the benefits of travelling to the island.
•
The absence of memorable experiences. Cyprus must develop a powerful offer of memorable experiences that reinforce its competitiveness as a tourist destination.
•
Limited air capacity. This is one of Cyprus’ main competitive weaknesses. It is necessary to exploit all possible opportunities and formulas that can be used to increase air capacity.
•
High levels of visual pollution. The aesthetic quality and local personality of the tourist urban environments is a great area of opportunity for Cyprus to increase its competitiveness.
•
Lack of tourism development planning. The absence of a Tourism Development Master Plan is responsible for a large part of the urban chaos in the island’s tourism clusters.
Furthermore… •
Cumbersome legal and regulatory framework. To foster growth, it will be necessary to simplify, streamline and increase the transparency of the legal and regulatory framework, as well as licence processing.
•
Poor leadership, governance, and partnership. Tourism has not benefited from adequate leadership by its consecutive governments. On the other hand, a strong and wellorganised private sector is also lacking as an effective government counterpart.
•
Weak public-private sector cooperation. Mechanisms of close cooperation between the public and private sectors which are typical and frequently used in many tourist destinations are scarcely observed in Cyprus, representing another opportunity for competitive improvement.
•
The attitude towards the future of the current tourism model. This is critical to attract the significant investment that the Strategy requires and boost crucial innovation.
•
Poor gastronomic offer. The country should make the most of the opportunity to substantially improve its gastronomic offer as this is an important component of the value that is perceived by tourists. They require more, more diverse, and better restaurants.
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Main competitive strengths Cyprus has also significant strengths that can be capitalised on in order to increase its competitiveness as a tourist destination: •
Outstanding weather conditions. 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.
•
Significant opportunities for targeting new markets and improving the Customer Value Proposition. Research has shown that Cyprus has good opportunities to expand and diversify the supply of tourism services and activities.
•
High levels of safety, comfort, and convenience. These are crucial criteria for choosing a holiday destination that Cyprus should embed into its marketing efforts.
•
Extensive experience in tourism management. 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.
•
Outbound operators in source markets and airlines interested in 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.
As well as… •
The diversity of tourist attractions. Cyprus doesn’t have any exceptional or unique tourist attraction. However, across its relatively small territory, there is a reasonable diversity of attractions and activities. These could be a foundation to develop memorable experiences that could turn into a relevant competitive advantage.
•
Opportunities to reduce operational costs. Opportunities exist to reduce operational costs, most of which are based on inter-company cooperation formulas.
•
An attractive and trustworthy place for business. Attracting investors and partners for tourism business deals is easy thanks to the good business climate on the island.
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Main implications for Cyprus 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.
a.
Main negative key findings and its implications • 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, forcing 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, 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 (i.e. visual pollution, gastronomical weaknesses, transport, etc.).
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• The amount of unique and memorable tourism experiences Cyprus offers is almost nonexistent. 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 Airports 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 Airports 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 Key findings
Implications for Cyprus
However, today it does not sufficiently meet the conditions to do so. 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. 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 the 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.
• “All-inclusive” wrong concept. Key findings The formula (relatively expanded in the Mediterranean) of "all-inclusive" as full board with bad food and low quality free alcohol is not desirable for Cyprus. The "all-inclusive" accusations of it harming the local shops, bars, and restaurants, is partially true. The local shops and bars negatively affects shops and bars of a "not all inclusive” hotel.
Implications for Cyprus The authorities must protect the consumer and prevent the development in Cyprus of “all-inclusive” formulas which are not such or offer very low quality of services, especially of food and beverage. The NTA must deny those licenses. The NTA, in collaboration with the industry, should regulate the “all-inclusive” to ensure that it truly responds to its original concept and grant licenses based on this new regulation. This new regulation must include the standard "all-inclusive" contract to which all those who offer it must submit.
• 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 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 MSME 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.
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• The low performance of governance, leadership, and cooperation mechanisms. Key findings
Implications for Cyprus
The tourism sector in Cyprus has not benefited from an adequate leadership of the successive governments which have been unable to collaborate with an organised and strongly positioned private sector.
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 within 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
b.
Key findings
Implications for Cyprus
They are usually present in tourist destinations but 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.
Main positive key findings and its implications
• High levels of safety, comfort, and convenience. Key findings
Implications for Cyprus
These are crucial 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 associations on the subject, that must be altered.
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• 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 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.
Implications for Cyprus 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.
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.
This is one of the main assets upon which Cyprus can build an attractive future.
• Outbound operators in source markets and airlines interested in Cyprus. Key findings
Implications for Cyprus
Both groups 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 tourist 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.
A reasonably diverse range concentrated in a relatively small terrain can be converted into an advantage. By properly combining heritage, natural resources and beaches, Cyprus should create an attractive value proposition for customers with greater “exploratory” motivations.
These could be a foundation upon which to develop memorable experiences that could turn into a relevant competitive advantage.
• 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.
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.
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.
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.
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Chapter 3 Market forces affecting tourism 3.1
Trends affecting tourism demand 3.1.1 General trends 3.1.2 Demand trends 3.1.3 Consumer trends
3.2
The Cyprus competitive set 3.2.1 The best destinations for each product 3.2.2 Key competitors by product in main source markets
3.3
Growth potential of Cyprus as a tourism destination 3.3.1 Future demand potential 3.3.2 Growth potential by source markets 3.3.3 Growth potential by products 3.3.4 Market growth potential in low season
3.4
Summary and implications for Cyprus
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This chapter aims to identify opportunities and threats for Cyprus as a tourism destination. The general environment (PESTLE), the general demand trends and the main changes in the preferences and motivations of consumers have been analysed. Next, the main competitors for Cyprus have been identified and demand projections have been developed to determine Cyprus’ potential models of growth.
3.1
Trends affecting tourism demand
3.1.1
General trends In general terms, there do not seem to be any trends in the PESTLE environment that will affect the Cyprus tourism sector negatively. However, from a strategic point of view, it is advisable to keep two implications in mind:
a.
b.
•
There are good conditions for the growth of tourist demand for Cyprus in the upcoming years, both from the rest of Europe and from places such as Russia, the Middle East, etc.
•
Environmental issues are becoming increasingly important and although they can be tackled effectively, they will increasingly require political, social, and financial efforts.
Selected positive elements •
The global economy will grow at an average rate of between 1,5% and 4%, which will be enough to fuel significant growth in tourism demand in well-planned and well-managed destinations.
•
Instability in the region will generate additional tourist flows to Cyprus as it is happening in other Mediterranean destinations.
•
Cyprus’ economy will benefit from the growth of its industry, recent discoveries of gas and oil deposits, development of the maritime sector and the continuous improvement of its business environment (one of the 10 places in the world that has most improved in this regard according to the World Bank).
•
New information and communication technology will open up new, previously unthinkable opportunities for the tourism sector.
•
The growing number of low-cost airlines will further facilitate tourist transportation.
Selected negative elements •
Cyprus’ economy will continue to be in a delicate situation for the next 5-10 years due to its high level of debt and dependence on the Greek economy, amongst other reasons.
•
Safety and security issues: Its geographical position - close to an unstable region - often puts Cyprus in a tricky situation that requires significant marketing and communication efforts to neutralise its negative effects.
•
Some environmental issues are requiring proper management: water supply issues, energy consumption, coastal erosion, waste management, sand mining, dams, and illegal breakwater construction etc., especially if climate change continues. Environmental sensitivity in tourism generating markets and among the Cypriot population will force investment in environmental sustainability measures.
•
‘Brain-drain’ loss of qualified human capital. Youth employment represents a significant challenge for Cyprus that causes the emigration of young talented people.
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Demand trends To understand Cyprus’ future full potential, THR has performed an analysis of forecasted outbound and inbound tourism flows for the period 2015-2025. The analysis performed was done by following the top-down logic, starting with the analysis of worldwide demand, followed by the analysis of European demand, and ultimately analysing the demand for the main Mediterranean destinations: Spain, Italy, Croatia, Montenegro, Greece, Turkey, and Cyprus.
a.
Main origin and destination areas of world tourism by 2025
a1.
Main areas of origin The forecast of outbound tourist arrivals of Tourism Economics by 2025 indicates a 57% increase in total worldwide arrivals, from close to 1,2 billion in 2015 to over 1,8 billion. This equals an average yearly growth rate of 4,6% over the period of 10 years. Europe is forecasted to remain the major outbound source region, however lowering its share in total arrivals from 51% in 2015 to 48% in 2025. On the other hand, arrivals from the Asia Pacific region are forecasted to see the strongest average yearly growth rate of 6%, which will lead to an increase in market share to 28% by 2025. Arrivals from the Middle East are also forecasted to see an above average growth rate of close to 6% per year, but due to its small size in absolute numbers is expected to remain with 4% of market share. Figure 62. Forecast of outbound world tourists by 2025, in millions
Source: Tourism Economics
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By 2025, the 4 main source markets will be Germany, United States, China, and UK. Germany is forecasted to remain the number one source market with over 120 million departures in 2025. However, with lower than average yearly growth rate of 3,6%. United States, with a 4,4% average yearly growth rate, is expected to have over 116 million departures. China and Russia are forecasted to see the strongest growth rate of outbound departures of 6,5% and 5,7% respectively. Furthermore, China is forecasted to surpass United Kingdom and become the third most important source market in the world. Figure 63. Departures in 2025 by source market Departures in 2025, in millions
CAGR 2015-2025 120,5
Germany United States
116,2
China
114,9 95,3
United Kingdom
47,7
Canada Italy
42,2
France
42,1
4% 4% 6% 4% 4% 4% 4%
35,7
Russia South Korea
31,0
Mexico
29,5
6% 5% 4%
Source: Tourism Economics
a2.
Main areas of destination The forecast of inbound tourist arrivals of Tourism Economics by 2025 indicates a 55% increase in total worldwide arrivals, from close to 1,1 billion in 2015 to over 1,7 billion. This equals an average yearly growth rate of 4,5% over the period of 10 years. Europe is forecasted to remain the major inbound source region, however lowering its share in total arrivals from 52% in 2015 to 50% in 2025. On the other hand, arrivals to Asia Pacific region are forecasted to see second the strongest average yearly growth rate of 5%, which will lead to an increase in market share to 25% by 2025. Arrivals to North America or the Middle East are also forecasted to see an above average growth rate of close to 6% per year, but due to its small size in absolute numbers is expected to remain with 11% and 6% of market share respectively.
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Figure 64. Forecast of inbound world tourist arrivals by 2025 per region, in millions +55%
CAGR
Africa South America Middle East North America
1.432 5% 3% 6%
1.153 5% 3% 5% 11%
11%
1.788 5% 3% 6%
+4%
11%
+4%
25%
+5%
50%
+4%
+5% +6%
25%
23%
Asia Pacific
51%
52%
Europe
2015
2020
2025
Source: Tourism Economics
By 2025, the 4 main destinations in terms of arrivals will be France, the United States, Spain, and China. The United States is forecasted to remain the number one source market with over 116 million arrivals in 2025 and with an average yearly growth rate of 4%. However, France, with a 2,5% average yearly growth rate, is expected to have over 111 million arrivals by 2025. Turkey and Russia are forecasted to see the strongest growth rate of inbound arrivals of 5,4% and 6,2% respectively. Figure 65. Forecasted arrivals by 2025 in each destination International arrivals in 2025, in millions 116
United States
98
Spain
78
China
70
Italy
4% 3% 3% 5%
60
Russia
6%
52
Germany
49
Mexico
48
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4%
63
Turkey
Source: Tourism Economics
3%
111
France
United Kingdom
CAGR 2015-2025
4% 3% 4%
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96
Tourists arrivals to Europe by 2025 Arrivals to Europe are forecasted to grow at an average rate of 4% p.a. until 2025. Germany is expected to remain the number one source market with close to 119 million arrivals, however with lower-than-average growth rate of 3% p.a. On the other hand, Poland is expected to have an above average growth rate of arrivals to Europe from Poland of 7% p.a., coming close to 30 million arrivals in 2025. As the economy in Poland continues to grow, consumer confidence is expected to increase, which is expected to influence outbound tourism flows from the country. Apart from Poland, Russia is forecasted to see a growth rate of arrivals to Europe of 6% p.a. Figure 66. Outbound tourism trips to Europe in 2025 by source markets Outbound tourists to Europe in 2025, in millions
3%
118,8
Germany
4%
86,7
United Kingdom
3%
45,5
France
5%
40,3
United States
4%
37,8
Netherlands Italy
35,7
Russia
35,6
Poland
CAGR 2015-2025
3% 6%
29,5
Belgium
27,7
Switzerland
27,0
7% 3% 3%
Source: Tourism Economics
On the other hand, France will be the number one destination in Europe, and it is forecasted to receive close to 111 million arrivals in 2025, growing at an average yearly growth rate of 3%. Within Europe, Russia is forecasted to see the highest growth rate of arrivals by 2025, an average of 6% p.a. Figure 67.Top European destinations by number of arrivals in 2025 Arrivals in 2025, in millions 110,5
France
97,7
Spain
69,6
Italy
3% 5% 6%
52,1
United Kingdom
48,7
Germany Greece
37,4
Austria
37,2
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4%
59,9
Russia
Source: Tourism Economics
3%
62,8
Turkey
Poland
CAGR 2015-2025
23,6
4% 3% 5% 3% 3%
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Tourists arrivals to the Mediterranean by 2025 Arrivals to the Mediterranean region (i.e. Spain, Italy, Croatia, Montenegro, Greece, Turkey, and Cyprus) are forecasted to grow by 4,4% CAGR until 2025. Germany, UK, and France are expected to remain the three top source markets for the region, accounting for more than 100 million arrivals. Figure 68. Outbound tourism trips to the Mediterranean in 2025 by source markets Arrivals in 2025, in millions
CAGR 2015-2025 4%
44,3
Germany
4%
40,1
United Kingdom
3%
26,3
France Netherlands
12,4
Russia
12,4
5% 5% 5%
United States
10,4
Italy
10,3
4%
9,4
4%
Switzerland Austria
8,3
Belgium
7,6
4% 5%
Source: Tourism Economics
On the other hand, Spain will remain the number one destination, and is forecasted to receive close to 98 million arrivals in 2025, growing at an average yearly growth rate of 4%. In terms of forecasted growth, Croatia is expected to experience the strongest growth of arrival of 6% p.a. Figure 69. Top Mediterranean destination by number of arrivals in 2025 Arrivals in 2025, in millions 97,7
Spain
69,6
Italy
62,8
Turkey
37,4
Greece
4% 3% 5% 5%
22,3
Croatia Cyprus
4,3
Malta
3,0
Montenegro
2,4
Source: Tourism Economics
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CAGR 2015-2025
6% 5% 6% 5%
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98
Tourists arrivals to Cyprus by 2025 According to Tourism Economics, the number of arrivals to Cyprus is expected to grow by 61% by 2025. This growth will represent approximately 1.6 million more international tourists’ arrivals to the island for the next 10 years. UK and Russia will remain the two main source markets, accounting for more than the 60% of the total arrivals. However, the share of UK in terms of arrivals will be reduced. On the other hand, Russia is expected to be the source market with the highest yearly average growth, growing 8% each year and increasing its weight in the market from 20% in 2015 to 27% in 2025. Figure 70. International tourists arrivals to Cyprus and source markets’ share by 2025 +61%
CAGR
4.279
3.616
+5%
26%
+4% 27% 2.633
Sweden Greece
4%
5%
27%
3% 4%
4%
+5%
6%
3%
28%
Others Germany
3%
4%
+8%
24%
20%
Russian Federation
+3% 40%
United Kingdom
2015
36%
33%
2020
2025
Source: Tourism Economics
e.
Evolution of Cyprus’ share in the arrivals to the Mediterranean Despite the potential 61% increase in the total arrivals, the share of Cyprus in the arrivals to the Mediterranean is forecasted to remain stagnant. According to Tourism Economics, Cyprus’ market share in the region will not grow, and Cyprus will attract only 1,4% of the total arrivals to the Mediterranean. Figure 71. Evolution of Cyprus’ share in the arrivals to the Mediterranean 5000
1,80% 1,40%
4000
1,40%
2.489
2.186
1,40%
2,0% 1,5%
3.616
3000 2000
1,50%
4.279
2.652
1,0% 0,5%
1000 0
0,0% 2005
2010 Arrivals to Cyprus (.000s)
Source: Tourism Economics Updated version 23.03.2017
2015
2020
2025
Cyprus share in the Mediterranean
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Consumer trends The Cyprus’ tourism strategy must consider the opportunities, threats and barriers arising from important changes in consumers’ motivations, preferences and behaviours. These changes bring the creation of new customer segments and new needs to satisfy. For the development of the tourism strategy, 28 relevant trends and changes related to consumers’ behaviour have been identified and grouped into three different sections: customer profile trends, new customer segments and the emerging trends for the econsumer.
a.
Customer profile trends 1. Rise of global travel demand among young people, the so called “Millennials” The population with access to economic resources is becoming younger, and for “Millennials” (25% of the world population) travel is no longer a luxury, but a fundamental part of their lifestyle. These emerging travellers will be in their peak earnings, spending and travelling within 10 years and therefore the industry is increasingly moving towards a model that caters for this new demand. 2. Rise of middle income class families in emerging markets China, India, and Russia are the emerging markets with the fastest growing propensity to holiday abroad, and they tend to do so with family. By 2030 India’s middle class will comprise 50% of the population, and 70% in China 9. 3. Rise of the “discerning traveller” in mature markets These are experienced travellers, looking for new destinations to discover, enjoy, learn, and relax. They are interested in getting to live authentic and traditional experiences, blending with the locals, and interacting with others in a local environment. 4. Aging of the population: increase of the “Empty nesters” in mature markets World population of 65+ will rise from 600 million in 2015 to more than 1,5 billion by 2050 (US National Institute of Aging). Senior members are an attractive market off-season to even out seasonality and are more likely to take longer vacations as they have less home responsibilities. The new generation of older customers will be the largest and fastest growing market sector. They will seek short, quality intensive, and life enriching travel experiences. 10 5. Rise of the independent traveller A rising young population and the use of internet have empowered the consumer to become independent travellers, planning the trips themselves instead of relying on prepackaged combinations. 67%11 plan and book using a mix of online or direct travel providers.
9Amadeus.
Shaping the future of travel in the Gulf Cooperation Council Fáilte Ireland Tourism Product Development Strategy 2007-2013 11 Amadeus: Shaping the future of travel in the Gulf Cooperation Council. 10
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b.
New customer segments 6. Rise of the upmarket demand Especially in the Middle East and Asian emerging markets, there is an increasing demand for luxury and “affordable luxury” by a growing segment of high earners that demand tailor made holidays, reflecting their interests, and adapted to their desired level of comfort and time constraints. 7. The value of personalisation As tourists are becoming experienced travellers, they increasingly want to feel exceptional and special. Customers appreciate every single detail considered as highly relevant for them as individuals, and thus just standard for the masses. Personalisation also extends to the decision-making and booking processes. Customers expect several degrees of personalisation and demand tailor-made products and services, being able to choose from different components that can be combined to suit personal preferences and create a unique travel itinerary. 8. Search for experiences There is a growing movement towards an experience economy, where tourists are increasingly searching for unique, exclusive, and memorable travel experiences. Decisionmaking is no longer primarily based on tangible built facilities but on intangible experiences. Value creation is increasingly about the stories behind the tourism activity. When buying an experience, tourists pay to yield lasting memories and enjoy high net value actions designed to involve them actively. It is a matter of including products and services with added elements to incite fascination and an excitement that will be remembered for many years to come. 9. Live like a local The combination of conscious travellers and the search for authenticity results in tourists becoming increasingly aware of the world they live in and concerned about the environment, indigenous cultures, and the host communities. Travellers are hence less invasive, eager to learn and get actively involved within the destination. Tourists prefer experiencing a destination through the eyes of the locals who live there. The tendency is to go back to the roots, to the authentic, to the real and simple; and travelling is increasingly all about connecting with locals, learning traditional habits and traditions, and enjoying the local culture. 10. Interest in niche tourist products An increasing number of travellers prefer specialised holidays over mass tourism. Special interest holidays are customised to meet specific needs, motivations and interests of individuals that want to practice or learn a hobby, enrich their awareness, or express themselves; all contributing to enrich their sense of self-fulfilment. These tourists expect high standards of service and an individualised focus. These activities pull back from the traditional concept of ‘Sun & Beach’ and move towards gourmet trips, photography, golfing, hiking, bird watching, wellness, etc.
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11. The “breakationing”: Cash-rich, but time-poor The limited vacation time and the increased spending power produces time-restricted consumers, rather than money restricted, otherwise known as time-poverty. As a result, there is a wider demand for short-length trips (city breaks) over the weekend to unwind. City trips are the fastest-growing part of international leisure travel, soaring by 82% between 2007 and 201412. In emerging countries, city-trips are forecasted to grow by 47%13. The increase in city breaks is also a consequence of the surge in low cost flights to a variety of destinations. City breaks are most popular with people aged 25-44, considering the constraints of taking time away from work. 12. Looking for wellness There is a growing interest for leading a healthy life and looking after one’s mind and soul. Individuals are interested in what will bring them wellness, and increasingly involved in activities related to organic food, exercise, a detox diet, search for a spiritual edge, yoga, stress relief, etc. These holidays are particularly popular with people who lead busy working lives and seek to reconnect on holiday. According to the Global Wellness Institute, the wellness and spa breaks sector is worth $494 billion globally. Mainland Europe is predicted to show strong demand for ‘Wellness’, besides touring holidays and city breaks.14 13. “Bleisure”, mixing business and leisure travel. Surveys indicate that 83% of business travellers use time to explore the city whilst visiting, while 65% of them extend trips to visit a new country, and more than half bring a family member or significant other. 14. Winter holidays are in demand in European source markets. Europeans travelling during winter have grown by 50% in the last 7 years, representing a 40% of all international trips. The main purpose of these holidays is to escape from harsh winter temperatures, looking for the sun in medium and long distance destinations.15 15. Fewer barriers to travel; travellers favour long haul trips. Long-distance holidays are no longer reserved for intrepid travellers, and they are forecasted to double from 2010 to 2030. This trend is favoured by the wider availability of new aircrafts and more affordable flights.
IPK World Travel Trends Report 2015/2016 World Travel Trends Report 2013/2014 14 Fáilte Ireland Tourism Product Development Strategy 2007-2013 15 World Travel Monitor for ITB. IPK International 12 13
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102
e-Consumer trends Tourism is strongly influenced by the progress of the technological revolution that is shaping and changing everyday life. Technology has become an integrated part of daily life with mobile internet, meaning that people are constantly connected to the digital world. THR has select the main trends identified in the international travel and tourism market from a digital perspective. They are key to understanding the new digital customer and their needs, and also to identifying market opportunities for Cyprus. 16. Online, online, online The Internet is a strategic tool for tourism and tour operators as it enables consumers to search for inspiration, purchase services, organise, and personalise travel booking from anywhere in the world, at any time. 87% of all travel related searches begin online. Destinations have the chance to attract the consumer during this ‘inspiration’ and ‘contemplation’ period. 65% of travellers turn to online sources for inspiration.16 17. The rise of social media as the place to share content Approximately one fifth of leisure travellers worldwide turn to social media platforms for inspiration within different stages of their travel planning: hotels (23%), vacation activities (22%), attractions (21%), restaurants (17%) 17. Today, communication is all about social media: people are as much (if not more) influenced by Facebook, YouTube, and Twitter than they are by traditional online channels. By using the information captured by these platforms, differentiated experiences are created, which motivate customers to visit more frequently, stay longer and spend more. Travel reviews influence the travel decisions of Millennials, as almost 80% of Millennials said that their travel decisions were influenced by reviews either ‘often’ or ‘sometimes’. 18. Increasing use of smartphones and wearable devices along the trip cycle As desktop, online bookings have reached their peak in ‘mature economies’, mobile booking (on smartphones and tablets) is forecasted to grow exponentially over the next 5 years18. Furthermore, 58% of travel expenditure19 takes place during the stay at the destination, posing an opportunity to influence the traveller as Wi-Fi infrastructure develops. Wearables are also making their way into tourism, allowing travellers to open room doors without a key and do express checkouts as well as pay for products and services linked to credit cards. 19. The growing influence of free Wi-Fi Mobile internet affects not only the way travel is distributed and sold, but how we experience the destination itself. Free Wi-Fi throughout city centres and tourist corridors enhances visitor experience whilst increasing the potential of social media as a marketing channel. Also, TripAdvisor, stated that nearly half of travellers will look for other accommodation if ‘in-room’ Wi-Fi is not included in the price, and this figure is noticeably higher amongst millennials. On the other hand, however, almost nine in 10 business hotels offer free in-room Wi-Fi.20
Google Travel Study, June 2014 Emarketer 18 Skift Travel Magazine. The megatrends defining travel in 2015 19 Emarketer 20 Tripbarometer2016. TripAdvisor. 16 17
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20. Multi-screen consumer behaviour goes mainstream According to Google, consumers’ use of multiple screens is sequential or simultaneous. Smartphones are generally the starting point to then move to a PC, tablet, or TV. Companies need to build a flexible technological infrastructure to reach consumers on all screens.21 21. TV viewing habits have changed Travellers are watching TV in more ways than ever before, and attention to detail is diminishing. One in three travellers (38%)22 watch television outside of live programming meaning that traditional TV advertising has lost its effectiveness because when travellers have the option most fast-forward through commercials. 22. The online video: a traveller’s constant companion Online travel videos are influential, especially, in the early stages of booking. 71% of travelrelated searches in YouTube involve destinations. Developing and promoting video content allows you to bring the sights and sounds of your destination, property, or product to the viewer. But travellers not only watch online video content, they create it, so knowing how to handle user-generated content to allow travellers to tell your story for you is important.23 23. Peer-to-peer and the sharing economy Thanks to social media, travellers have been sharing their reviews and other thoughts for years. Travel services are at the second stage in the ‘peer-to-peer and sharing’ trend. Consumers are now active in providing holiday apartments, cars, meals, and tours.24 24. Rising demand for real-time services Consumers who are constantly ‘connected’ expect to receive real-time services from travel companies. Companies need to provide personalised alerts and information. Customer service needs to be available 24/7 and easy to access via mobile devices.25 25. Managing online reputation Based on TripAdvisor, in 2016 businesses will be keeping a close eye on what people are saying about them on the web. 93% of hoteliers said that online traveller reviews are important for the future of their business. 59% invest more in Online reputation management than they did the previous year.26
Euromonitor. Online Travel Consumer 2014. Google Travel Study, June 2014. 23 Google Travel Study, June 2014. 24 Euromonitor. Online Travel Consumer 2014. 25 Euromonitor. Online Travel Consumer 2014. 26 Tripbarometer2016. TripAdvisor. 21 22
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104
Other consumer trends to be considered •
Increase of the confidence in destination brands. Despite looking for new exotic destinations and experiences, demand lies with recognised brands. Amidst increased international competition, a lifestyle brand that connects to travellers’ ideals is becoming an important vehicle for building long-term meaningful relationships with tourists. 27
•
A growing environmental consciousness.28 A variety of market studies over the past five years have revealed a sustained interest amongst consumers in tourism products and services that protect the environment and respect local cultures. 29
•
Growth of the meetings & events market. MICE sector has grown by 37% between 2007 and 2014, with an increasing number of meetings taking place in APAC-ME30 markets. Travel management companies show growth in business travel to worldwide countries of around 5%. Out of this 5%, 25%31 has been attracted by UAE.
Skift annual report “Megatrends Defining Travel in 2015” Fáilte Ireland Tourism Product Development Strategy 2007-2013 29 Center for Responsible Travel (CREST) January 2013 30 ICCA Statistics Report 2013 31 Amadeus: Shaping the future of travel in the Gulf Cooperation Council 27 28
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105
The Cyprus competitive set To had better understand and define the competitive set of Cyprus, the results of a market research with more than 1.700 interviews conducted in Russia, UK, Germany, France, Sweden, and Norway have been exploited, combined with the knowledge of the directors of the CTO offices in the sources markets obtained in 12 interviews. The market research shows which are the “top of mind” destinations for each product, and the opinion of the responsible of the CTO offices abroad indicates which are the main competitors for Cyprus for each product per source market. Despite the results are slight different in these two analyses, it can be concluded the following:
3.2.1
•
Each product has a different competitive set. Cyprus’ competitors are different depending on the product.
•
The competitive set of a determined product varies per each source market analysed.
•
In Cyprus’ main tourism market, sun & sea, the main competitors in the most relevant source markets are Spain and Greece, followed by Italy, Portugal, Malta and Turkey.
The best destinations for each product The research carried out by THR included the identification of the destinations considered to be the “best place” for different types of product. As Cyprus’ main tourism product is sun & sea, the analysis makes particular emphasis in that market segment. As it is shown in the table, Spain is the absolute leader in Sun & Sea tourism according to the interviewees in all source markets. Other Mediterranean destinations, like Greece or Italy also have good competitive position in the sun & sea market. In addition, one point to consider is the globalisation of the competitors. Consumers do not differentiate destinations when considering a product, so we can induce that the future trend is that competition will be more extended, and each destination will face a more diversified competitive set. Table 18. Most attractive destinations for Sun & Sea vacations per source market France 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10t h
Spain Greece Italy Croatia France Morocco Caribbean Portugal Corsica D. Republic
Germany
Norway
Russia
Sweden
UK
Spain Italy Turkey Portugal France Croatia Thailand Greece Caribbean
Spain Greece Italy Thailand Crete Turkey Croatia France Portugal
Spain Thailand Egypt Greece Italy Cyprus Turkey Crimea Russia
Spain Greece Italy Thailand Croatia USA Portugal Turkey Malta
Spain Greece Italy Portugal Cyprus Caribbean Turkey Malta Croatia
USA
Malta
Bulgaria
Maldives
USA
Source: Results to THR surveys done during the brand adoption process analysis in Russia, UK, Germany, France, Sweden, and Norway.
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According to the survey, Cyprus is among the most popular destinations for Sun & Sea trips. However, the popularity of Cyprus must be seen sceptically, as it is only due to the high weight of UK and Russia in Cyprus’ total arrivals. Only UK and Russia consider Cyprus relatively attractive for sun & sea trips. The other countries, tend to differ and only 1% of the respondents consider Cyprus attractive for the sun & sea market
106
Figure 72. Most attractive destinations for Sun & Sea trips Spain
44%
Greece
15%
Italy
12%
Turkey Thailand
11% 9%
Cyprus
6%
Maldives
6%
France
6%
Caribbean
5%
Egypt
5%
Source: Brand Adoption process analysis
Below, the main top-of-mind destinations for each type of tourism product are detailed. Figure 73. Most attractive destinations for Touring trips USA
25%
Italy 9%
France
8%
Australia
6%
Thailand England
Italy France England Spain Greece Japan Germany Czech Republic Turkey Austria
15%
Spain
Germany
Figure 74. Most attractive destinations for Culture trips
6% 5% 5%
New Zealand
4%
China
3%
Figure 75. Most attractive destinations for Nature trips Norway
Figure 76. Most attractive destinations for Adventure trips
12%
USA
New Zealand
8%
Spain
8%
France
France
8%
New Zealand
Ireland
7%
11% 11% 9%
Africa
6%
Canada
Austria
6%
Thailand
Canada
6%
Italy
5%
18%
Australia
Russia
Spain Japan
Updated version 23.03.2017
8% 7% 6% 6% 5% 5% 4%
15%
Sweden
Africa
37% 19% 16%
9% 8% 8% 7% 5% 4%
CYPRUS TOURISM STRATEGY
Figure 77. Most attractive destinations for Wellness trips Spain Portugal Asia Germany Nigeria Wales Czech Republic France Turkey Sweden
3.2.2
107
Figure 78. Most attractive destinations for City Break trips
23% England
12% 9% 9% 8% 8% 6% 6% 5% 5%
27%
France
27%
Italy
24%
Spain
19%
USA
19%
Germany
14%
Czech Republic Denmark
9% 4%
Austria
3%
Netherlands
3%
Key competitors by product in main source markets (CTO Perspective) Based on the professional experience of the responsible of 12 CTO offices abroad, competitors in each market segment have been identified. Table 19. Main competitors by product according to the CTO offices abroad Sun & Sea
Culture
Touring
Nature
Gastronomy
Sport
MICE
1st
Spain
Greece
Spain
Spain
Spain
Spain
Spain
2nd
Greece
Spain
Greece
Italy
Italy
Turkey
Turkey
3rd
Turkey
Turkey
Italy
Portugal
Greece
Malta
Germany
4th
Portugal
Portugal
Portugal
Turkey
Portugal
Slovenia
Greece
5th
Malta
France
Egypt
Greece
France
Portugal
France
Source: Results based on the surveys done to CTO offices abroad
According to the results obtained from the surveys to responsible of the CTO offices abroad, it can be stated that Spain, Greece, Turkey, and Italy are the overall main competitors for Cyprus. Also, as it is seen in the table above, the competitive set remains almost the same for every product analysed, which means that Cyprus’ competitors are high competitive in a wide product portfolio, which upgrades their competitiveness and hinders the market leadership. Next, responsible of the CTO offices abroad considered the three top priority products per source markets, together with the main competitors for each of them. As it is shown in the table below, the list of competitors slightly varies, as different aspects are considered when the “local” competitive set is defined.
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Table 20. Main competitors per priority products according to the CTO offices abroad Country
Belgium
Priority product
Netherlands
Poland
Russia Nordics
Switzerland
Greece
Egypt
Culture
Spain
Portugal
Greece
Egypt
Nature
Spain
Portugal
Greece
Egypt
Spain
Crete
Turkey
Spain
Tunisia
Mallorca
Turkey
Malta
Portugal
Wine & Gastronomy
Italy & Spain
Crete
Portugal
Malta
Sun & Sea
Greece
Turkey-Spain
Malta
Croatia
Culture
Greece
Turkey
Spain
Religious
Israel
Spain
Touring
Spain
Greece
Portugal
Egypt
Culture
Greece
Spain
Portugal
Egypt
Nature
Greece
Spain
Portugal
Egypt
MICE
Spain
Greece
Portugal
Italy
Wine & Gastronomy
Spain
Greece
Sun & Sea
CIS countries
Greece
Spain
Thailand
MICE
CIS countries
Germany
France
Europe
Sports
CIS countries
Spain
Italy
Slovenia
Sun & Sea
Spain
Greece
Croatia
Turkey
Sun & Sea
Spain
Turkey
Greece
Italy
Culture
France
Austria
Spain
Greece
Spain
Turkey
Portugal
Italy
France
Austria
Spain
Greece
Culture
Sport (teams)
Sport (teams)
MICE
Ukraine
Cape Verde Cape Mediterranean Madeira Spain Verde Destinations with great value in terms of landscapes beauty or general experience such as Spain or GR20 in Corsica. Madeira
Wine & Gastronomy
UK
4th competitor
Portugal
Culture
Italy
3rd competitor
Spain
Nature
Germany
2nd competitor
Touring
Sun & Sea France
1st competitor
Mediterranean
European cities
Central Europe
Portugal
Italy
UAE
Wine & Gastronomy
Portugal
Spain
Italy
Greece
Touring
Europe
Italy
Spain
Far east
Sun & Sea
Turkey
Egypt
Bulgaria
Montenegro
MICE
Turkey
Weddings
Exotic sites
Europe
Ukraine
Source: Questionnaire responded by 11 of 12 CTO offices abroad.
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3.3
Growth potential of Cyprus as a tourism destination
3.3.1
Future demand potential
a.
109
Introduction Tourist arrivals in Cyprus have stagnated during the last 10-15 years, without any significant change in trend. To estimate the growth potential of the destination, THR conducted an analysis based on two different approaches: Forecasts from Tourism Economics and a demand projection performed by THR. Figure 79. Stagnation of international arrivals to Cyprus in the last 15 years 3.000.000 2.500.000
2.000.000 1.500.000
1.000.000 500.000
Average
Arrivals
Source: Tourism Economics
b.
Tourism Economics projection Tourism Economics’ projections are based on econometric models (which use historical series with certain inconsistencies), and they are available until 2025. For the period 2025-2030, THR has applied linear regression forecast based on Tourism Economic’ forecast for the period 2015-2025. Figure 80. Tourism Economics' demand forecast model for 2030
In the table below it is shown that according to Tourism Economics, Cyprus can approximately double the number of international tourist’s arrivals in 15 years, reaching more than 5 million international arrivals in 2030
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Table 21. Growth potential according to Tourism Economics Forecast
2015(1) International tourists arrivals
2.633.333
2020
2025
2030
3.593.848
4.256.508
5.117.738
Source: Tourism Economics data extracted on July 2016
c.
THR projection according to a Standard Destination Strategy
c1.
Introduction Apart from the aforementioned projection of Tourism Economics, THR conducted a second approach. The approach is based on the calculation of the growth potential of Cyprus considering that the country will perform a “Standard Destination Strategy”. What defines the strategy and differentiates it with the other approaches is the demand positioning and the specific mix of the four tourism markets. 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 22. Types of tourists in terms of average daily per capita expenditure Type of tourist
Average daily expenditure
i.e.
Budget tourist
Average – 35%
Backpackers
World average tourist
Average
Majority of big TOs clients
Affluent tourist
Average + 30/50%
Luxury tourist
Average + 100/150%
Those using “Premium” products and services Those using “high end” products and services
The Standard Destination Strategy is characterised by the predominant weight of the Mass market segment, while Affluent and Luxury tourists (high-spenders) have a minor share in this strategy. Table 23. Distribution mix by markets and demand positioning for international demand (%) Markets
Standard destination
Budget
20%
World average
50%
Affluent
25%
Luxury
5%
In the table below, other examples of tourist destinations are detailed. 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%.
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Table 24. Destination positioning strategies in terms of client mix Destination types
% of affluent and luxury tourists
Examples
Low-cost
10
Tunisia, Bulgaria, Greece, etc.
Standard
30
Turkey, Cyprus, etc.
Premium
40-60
Malta, Balearic Islands, Fiji, Croatia, etc.
High-end
50-80
Dubai, Austria, etc.
Please find on the following table, the expenditure per day and per stay of the 10 different countries used as an example, compared with Cyprus information. Table 25. 10 Countries’ expenditure per day and per stay (₏) Avg. Expenditure per Day 82
Avg. length of stay 4,1
Low-cost Bulgaria
72
3,7
Greece
70
9,2
Cyprus
94
8.4
794
CYSTAT (July 2015)
Turkey
89
9,3
825
Malta Balearic Islands
116
7,9
918
UNWTO (2016) Malta Tourism Authority (2016) Statistical Report
113
8,1
911
Fiji
111
10,8
1.200
Croatia
110
5,0
550
Dubai
146
3,6
526
Austria
139
13,7
1.900
Country Tunisia
Standard
Premium
High-end
c2.
Avg. Expenditure Source per Stay 338 Government of Tunisia (2015) Bulgaria National Statistical 267 Institute (2015) Bank of Greece - Annual 639 Border Survey (2011)
IBESTAT (2015) Fiji Tourism Statistics Bureau (2015) Croatia Ministry of Tourism (2015) Visit Dubai - Tourism performance (2015) Austrian National Tourist Office (2015)
Methodology The second method used to evaluate growth potential is a traditional econometric approach based on an analysis of available statistical data from CYSTAT, from which THR performed several demand projections based on regressions. However, after performing a regression analysis to identify whether any correlation exists between arrivals/revenue and other tourism variables, the consistency tests showed very poor results with regards to obtaining a reliable forecast, and projecting demand.
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Table 26. Inconsistencies identified when analysing statistical data Tourists
Expenditure
Hotel Beds
Overnight Stays
Tourists
No rigorous explanation for the last 10 years’ stagnation
The average expenditure rises, possibly due to inflation, as demand falls
Exaggerated capacity for such a small number of arrivals
Average stay of around 6 days
Expenditure
Accelerated revenue growth compared to arrival growth
Average annual expansion rate very low
The income level should make the offer increase in size
Discrepancy between revenue growth and stays
Hotel Beds
Decrease compared increased arrivals
6,4% decrease in hotel beds
Decrease since 2008
Capacity not justified by the number of overnight stays
Overnight Stays
More stagnation in stays than arrivals
High average expenditure not explained
40% occupancy
Stagnation in the number of stays
in to
As an alternative, a scenario method has been chosen to project the international tourist arrivals to Cyprus. By using this method, the projections are not limited to a value generated using a purely mathematical assumption, as their interactions with the tourism policy actions that will be implemented by the Cyprus Tourism Strategy are considered. THR has carried out an analysis relating the growth in international tourism demand with OECD countries’ real income growth. The objective was to challenge the set of independent variables with the greatest impact on tourism demand worldwide. The 5 critical variables and assumptions After careful selection, 5 variables have been selected as the most influential: •
Income increase in source countries: The study of the growth trends of different economies allows for defining an interval of the sustained annual real growth rate ranging from 0,5% to 3,0%. The elasticity for this variable is 1,40.
•
Increase in tourism related investment: Developing a better tourism system implies making a greater economic effort. This increased effort is necessary in order to expand the tourism offer, and upgrade infrastructure, heritage, and environmental protection, among others. According to THR’s estimates, a reasonable interval for annual investment growth would stand between 1,5% and 4,0%. The elasticity for this variable is 0,25.
•
Increase in tourism promotion and communication: The implementation of a constant campaign of communication, promotion, public relations, and advertising to strengthen the image of Cyprus is fundamental. In this case, THR’s analysis indicates that a plausible interval of annual growth should remain between 1,0% and 3,5% in the different international markets. The elasticity for this variable is 0,18.
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•
Market stability (variations in average expenditure): Any positive changes in demand distribution will encourage arrivals from tourists who present a greater average expenditure. After considering different cases, THR has estimated that the annual variation could oscillate from an annual expenditure decrease of 2% to a positive expenditure increase of 2%.
•
Branding Effect: Any positive changes in Cyprus’ international recognition will foster the arrival of tourists who present a greater average expenditure. After considering different cases, THR has estimated that the annual variation could reach up to a 15% increase.
The use of the scenario method THR has created the model that generates 2030 Cyprus projections for 5 scenarios to evaluate the demand, expenditure, and overnight stays of international and domestic tourists according to the following hypotheses: Table 27. Assumptions per scenario (annual variations) Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
1. Available Income (AI)
+0,5%
+1,0%
+2,0%
+2,5%
+3,0%
2. Tourism Investment (TI)
+1,5%
+2,0%
+2,5%
+3,5%
+4,0%
3. Cyprus Promotion (CP)
+1,0%
+2,0%
+2,5%
+3,0%
+3,5%
4. Source Markets Stability (MS)
0,98
0,99
1,00
1,01
1,02
5. Branding Effect (BE)
1,02
1,05
1,07
1,10
1,15
The relative likelihood of each scenario has been assigned by experts using the DELPHI method. The goal of this method was to reach a common consensus based on discussion between experts, which concluded that scenarios 3 and 4 are the most likely to occur. For this reason, THR decided to take the average of scenario 3 and 4 to conduct the analysis Table 28. Likelihood of each scenario to occur according to experts’ opinions Scenario
Likelihood
1. Pessimistic / depression
3%
2. Adverse/moderated
14%
3. Tendency/historical
32%
4. Favourable/contained
48%
5. Optimistic/expansion
3%
Calculating the number of international tourists’ arrivals The process for estimating the number of international tourists and same day visitors visiting Cyprus in 2030 relies on the application of the projection formula: International tourists (T) = [Tourist base year × (AC)^T^E × (TI)^T^E × (CP)^T^E × MS × BE]
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Where: •
Tourist base year = Number of tourists in the base year (or number of excursionists, as applicable). In this case, 2015 is the base year.
•
AC = Increase in Available Income factor (AC);
•
TI = Increase in influence of tourism investment factor (TI);
•
CP = Increase in Cyprus promotional efforts factor (CP);
•
MS = Expansion of market stability factor (MS);
•
BE = Influence of the expansive situation due to branding effects factor (BE);
•
T = projection time (5, 10 and 15 years);
•
E = elasticity for each variable.
The table below shows the forecast results based on a Standard destination strategy: Table 29. International arrivals growth according to the Standard Destination Strategy Scenario 3
2015 2.633.333
2020 3.448.000
2025 4.176.000
2030 5.059.000
Average (S3-4) Scenario 4
2.633.333 2.633.333
3.600.000 3.766.000
4.480.000 4.799.000
5.577.000 6.116.000
Note: all numbers have been rounded up
The projections indicate that there is potential for Cyprus’ tourism to grow by 2030, considering international demand trends and the combined effects of the Cyprus Tourism Strategy. The projections for international tourists’ arrivals for 2030 according to the Standard Destination Strategy can be considered as the maximum potential of tourists for Cyprus.
d.
THR projection according to a Premium Destination Strategy The figures described in the previous section can be considered as the maximum potential of tourists for Cyprus, which may bring several issues to light in terms of additional resources required in accommodation and employment. However, the figures can vary if the customer value proposition differs. As it is explained previously, tot all international tourists spend the same amount of money when travelling. Apart from the Standard destination strategy, which is characterised by the highly predominant weight of the Mass market segment, THR also analysed the growth potential of Cyprus considering the adoption of a Premium Destination Strategy. This strategy presents a more balanced distribution of the different segments, with a still high standard tourist segment weight, but a significant presence of the upper segments. While in “Low-Cost” and in “Standard” destinations, the share of affluent and luxury customers is 30%, in Premium destinations this proportion implies 55% of the market, as it is illustrated in the table below:
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Table 30. Markets mix by Destination Strategy (% of each market) Markets
Standard destination
Budget market World average market Affluent market Luxury market
Premium destination
20% 50% 25% 5%
10% 35% 45% 10%
The Premium Destination Strategy attracts fewer tourists than the Standard destination strategy, but more revenues, given the higher spending capacity of the mix. The table below shows the forecast results of the potential of tourists’ growth for Cyprus, based on a Premium Destination Strategy. See section 5.4 for a more detailed explanation. Table 31. International arrivals growth potential according to the Premium Destination Strategy International tourists arrivals
2015
2020
2025
2030
2.633.333
3.132.000
3.895.000
4.848.804
Note: all numbers have been rounded up
The projections indicate that the Premium Destination Strategy also shows potential for Cyprus’ tourism to grow by 2030. However, the Premium Destination Strategy aims for a lower growth in the volume of tourists. On the other hand, targeting a larger proportion of highspending segments could multiply the contribution per tourist to the Cyprus economy.
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116
Compared results The main objective of the analysis is to estimate the growth potential of international arrivals that the island can experience during the next 15 years. The table below shows the forecast results of the potential growth of tourists’ arrivals in Cyprus, according to the three aforementioned approaches. Table 32. International arrivals growth potential according to each Strategy Forecast
Tourism Economics THR – Standard Destination Strategy THR – Premium Destination Strategy
2015
2020
2025
2030
2.633.333
3.593.848
4.256.508
5.117.738
2.633.333
3.600.000
4.480.000
5.577.000
2.633.333
3.132.000
3.895.000
4.848.800
Source: Tourism Economics data extracted on July 2016 Note: THR forecasts’ numbers have been rounded up.
The main conclusion to be drawn from the analysis is that the three approaches show that Cyprus has a high growth potential regarding the arrivals of international tourists for the next 15 years. However, it is important to consider that each method has followed different specific variables and criteria for the evaluation of the potential. Another important aspect to consider is that the analysis conducted by THR has provided two different ways to approach the growth potential of Cyprus. The Premium Destination Strategy represents an alternative to the Standard destination strategy for Cyprus, and proposes a new tourism model for the destination. Finally, the main implication for Cyprus will be the evaluation of whether it is more convenient to receive a larger number of tourists or to receive fewer tourists with higher purchasing power.
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117
Growth potential by source markets After the setting the total growth potential for Cyprus’ demand, the analysis of the growth potential and the contribution of the main source market to Cyprus’ growth over the next 15 years is conducted.
a.
Methodology For the analysis of the growth potential by source market, THR considered the top 15 source markets for Cyprus in 2015. To elaborate the analysis, THR used the following approach:
a1.
Total number of international arrivals to Cyprus First, it is assumed that the total number of international arrivals to Cyprus for 2030 is based on the Standard Destination Strategy, which shows the maximum potential for growth. Table 33. International arrivals growth potential according to the Standard destination strategy Forecast International tourists arrivals
2015
2020
2025
2030
2.633.333
3.600.000
4.480.000
5.577.000
Note: all numbers have been rounded up
a2. Source market share in total arrivals to Cyprus Secondly, forecasted source market shares in total arrivals to Cyprus have been calculated according to the forecasts of Tourism Economics, which are based on in-depth regression analysis that take into consideration a number of relevant factors. However, data for 2030 was not available, so THR developed a regression analysis based on the historical data of Tourism Economics and estimated the projection of the source market shares in total arrivals to Cyprus. Table 34. Source market share in total arrivals to Cyprus from 2000 to 2030 UK Russia Greece Sweden Germany Israel Norway Switzerland Ukraine Lebanon Denmark France Poland Finland Belgium
2000
2005
2010
2015
Trend
2020
2025
2030
51,2% 4,9% 3,8% 4,8% 8,8% 1,7% 2,3% 3,0% 0,4% 0,6% 1,3% 1,4% 1,1% 1,6% 1,4%
56% 4,0% 5,3% 3,6% 7,4% 1,7% 2,0% 1,6% 0,2% 0,6% 1,2% 2,1% 0,6% 1,2% 0,9%
46,2% 10,4% 5,9% 5,1% 6,5% 1,8% 2,9% 1,9% 0,5% 1,0% 1,4% 1,3% 0,9% 1,5% 1,1%
40,5% 20,5% 4,4% 4,2% 3,4% 3,3% 2,5% 2,0% 1,7% 1,4% 1,3% 1,3% 1,2% 1,1% 1,1%
▼ ▲ ▲
36,1% 24,1% 5,4% 4,4% 4,2% 2,6% 2,2% 1,9% 1,5% 1,3% 1,4% 2,1% 1,2% 1,2% 1,2%
31,4% 28,1% 5,9% 4,0% 5,1% 3,0% 2,0% 1,8% 1,4% 1,1% 1,3% 2,3% 1,2% 1,2% 1,1%
27,0% 31,7% 6,1% 4,2% 5,3% 4,0% 2,2% 1,8% 1,9% 1,4% 1,4% 2,3% 1,4% 1,1% 1,2%
Source: Tourism Economics data extracted on July 2016 Updated version 23.03.2017
= ▼ ▲ = ▼ ▲ ▲ = ▲ = ▼ =
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118
Growth potential Based on the following formula, the growth potential for the total international arrivals by source market has been calculated. Figure 81. Formula to calculate the total international arrivals growth potential
DTHR X SMTE = SMTHR
Tot al demand pot ent ial according t o t he St andard Dest ination St rat egy designed by THR
Source market share in t ot al arrivals based on Tourism Economics forecast
Source market pot ent ial in t ot al arrivals based on THR allocat ion
The table below shows the forecast results of the potential growth of tourists’ arrivals in Cyprus, according to the aforementioned approach. In addition, to validate the results obtained by THR, the growth perspective for each source market obtained from the interviews with main responsible of the CTO offices abroad has been added. Table 35. Growth potential by source market based on the Standard Destination Strategy
2015
2020
2025
2030
UK Russia Greece Sweden Germany Israel Norway Switzerland Ukraine Lebanon Denmark France Poland Finland Belgium Others
1.066.790 538.826 116.385 109.479 89.949 86.143 66.613 53.748 45.476 36.461 35.297 34.217 32.300 28.350 27.858 265.441
1.299.600 867.600 194.400 158.400 151.200 93.600 79.200 68.400 54.000 46.800 50.400 75.600 43.200 43.200 43.200 331.200
1.406.720 1.258.880 264.320 179.200 228.480 134.400 89.600 80.640 62.720 49.280 58.240 103.040 53.760 53.760 49.280 407.680
1.505.790 1.767.909 340.197 234.234 295.581 223.080 122.694 100.386 105.963 78.078 78.078 128.271 78.078 61.347 66.924 390.390
CAGR (2030 vs. 2015) 2,3% 8,2% 7,4% 5,2% 8,3% 6,5% 4,2% 4,3% 5,8% 5,2% 5,4% 9,2% 6,1% 5,3% 6,0% 2,3%
Total
2.633.333
3.600.000
4.480.000
5.577.000
5,1%
CTO Growth perspective Medium High High Medium High Medium High High High Medium High
Source: Based on Tourism Economics data extracted on July 2016 & CTO interviews
The analysis conducted, together with the perceptions from the responsible of the CTO offices abroad, conclude that the countries with a highest growth potential are Russia, which is also expected to be the main source market by 2030, and the Central European countries, such as Germany or France, which are expected to increase its share in total arrivals. On the other hand, UK, and the Nordic countries (i.e. Sweden, Norway, and Finland) the growth potential is lower than the average, which also coincides with the perspectives of the responsible of the CTO offices abroad, who forecast a medium-average growth in the future. Updated version 23.03.2017
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119
Growth potential according to the Premium Destination Strategy As it is mentioned before, the arrivals to Cyprus, and consequently, from its source markets, can grow following two different approaches. The first approach to calculate the growth potential by source market, the Standard Destination Strategy, is the one used previously, and therefore the second one, the Premium Destination Strategy, is introduced below. Table 36. Total international arrivals potential by source market
Standard Strategy Premium Strategy
Destination Destination
Arrivals 2015
% of Luxury & Affluent tourists
Arrivals 2030
Growth
2.633.333
30%
5.577.000
+111%
2.633.333
55%
4.840.804
+84%
As explained, the Premium Destination Strategy consists in a mix of tourists with a higher percentage of luxury and high-end tourists, which, according to the demand elasticity, reduces the total potential growth of arrivals. Therefore, the total growth potential by source market will also be lower than the potential following the Standard Destination Strategy. To calculate the total arrivals per source market according to the Premium Destination Strategy, THR multiplied the total estimated demand for the strategy by the current share of each source market according to Tourism Economics. Table 37. Growth potential by source market based on the Premium Destination Strategy
UK Russia Greece Sweden Germany Israel Norway Switzerland Ukraine Lebanon Denmark France Poland Finland Belgium Others
2015 1.066.790 538.826 116.385 109.479 89.949 86.143 66.613 53.748 45.476 36.461 35.297 34.217 32.300 28.350 27.858 265.441
2020 1.128.053 753.077 168.739 137.491 131.242 81.245 68.746 59.371 46.872 40.622 43.747 65.621 37.498 37.498 37.498 287.482
2025 1.221.020 1.092.697 229.427 155.544 198.319 116.658 77.772 69.995 54.440 42.775 50.552 89.438 46.663 46.663 42.775 353.863
2030 1.307.017 1.534.535 295.289 203.314 256.563 193.632 106.498 87.134 91.975 67.771 67.771 111.338 67.771 53.249 58.090 338.856
CAGR (2030 vs. 2015) 1,4% 7,2% 6,2% 3,9% 6,8% 5,5% 3,3% 3,3% 4,9% 4,4% 4,4% 8,1% 5,1% 4,2% 5% 2%
Total
2.633.333
3.124.800
3.888.600
4.840.804
4,1%
Source: Based on Tourism Economics data extracted on July 2016 & CTO interviews
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CTO Growth perspective Medium High High Medium High Medium High High High Medium High
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120
Growth potential by products The current situation of tourism stagnation in Cyprus requires the further development and extension of the product portfolio. To identify the products with higher potential, THR was asked to provide the analysis of the size of the market segments in the European outbound travel market, and Cyprus’ growth potential in each one of them.
a.
Methodology To estimate the Cyprus market/product growth potential, THR developed a structured 4-step approach: •
Estimate the size of the outbound demand from Europe
•
Estimate the size of market segments in European outbound demand
•
Estimate Cyprus’ potential in European outbound demand from Europe
•
Estimate Cyprus’ potential in European outbound demand per market segment Figure 82. THR approach in estimating Cyprus market/product growth potential
Finally, based on the estimation of the size of the market segments and the potential of Cyprus in each of them, THR estimated the potential of Cyprus share in European Outbound demand per market segments. The analysis provided in the following pages follows the sequence of the approach and clearly outlines Cyprus’ market potential in each of the market segments analysed.
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a1.
121
Estimates of the size of the outbound travel demand from Europe The following table shows THR process in estimating the size of the outbound travel market from Europe (number of people) staying at least 4 consecutive nights. Table 38. Outbound leisure travel for at least 4 nights abroad from 27 EU countries
Total
Population
Population 15+
Population 15+ traveling for personal purposes
681.337.430
573.720.736
347.561.263
Traveling for personal purposes for at least 4 consecutive nights
Traveling for personal purposes for at least 4 consecutive nights abroad
264.955.208
166.809.395
Source: 1) People and Society, Central Intelligence Agency (CIA), 2016 Source: 2) Demographic data, Tourism Economic, 2016 Source: 3) 4) 5) Data for EU countries from the European Commission (2016), for Russia Federal Statistic
The estimated size of the market is represented in the number of people traveling for personal purposes for at least 4 nights. To convert the estimated number of persons into total number of trips, THR used the following assumptions and facts: •
Based on the market research it is assumed that travellers take on average 2 holidays lasting at least 4 consecutive nights per year.
•
Traveling abroad for at least 4 consecutive nights’ accounts for 91% of outbound trips 32.
•
Based on the market research, it is estimated that leisure travel accounts for 90% of total outbound travel demand (hence business travel represents 10%).
Thus, the formula to estimate the total number of trips is the following: Figure 83. Formula to estimate the total number of outbound leisure travel trips from EU countries
The results show that the total estimated number of outbound trips from Europe is over 407 million trips. To double-check the estimates and the reasoning, THR compared the estimates with the data obtained from Tourism Economics for the same sample of 31 countries (i.e. 396 million trips) which resulted only in 2,7% difference. However, for further estimates THR will use only leisure outbound trips lasting more than 4 consecutive nights, since the average length of stay for tourists in Cyprus is longer than 4 nights. Hence, the total number of trips used for further estimates is 333.618.790 (people traveling abroad for personal purposes X 2 trips abroad per year).
32
THR based on Preferences of European towards tourism, European Commission, 2016
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Estimates of the size of market segment in the European outbound demand Based on the brand adoption survey performed for Cyprus in the top 6 source markets in terms of arrivals to Cyprus (the UK, Russia, Germany, Sweden, France, Norway), THR managed to gain an insight into the preferences of traveller in terms of market segments. 2 questions were analysed and considered for further estimates: 1. “What is your favourite type of trip/holiday abroad?” 2. “What is your second favourite type of trip/holiday abroad?” Figure 84. THR approach to estimate the potential of market segments
Since the brand adoption survey carried out for Cyprus was performed only in the top 6 source markets for Cyprus, to estimate the size of the segment in other 26 countries, THR assumes that similar travel behaviour exists among travellers there. Hence, a weighted average from 6 source markets included in the brand adoption survey was applied.
City breaks
Nature
Adventure
Wellness & Medical
Sailing & Yachting
Sports
Others
Total
102,3
81,5
52,8
26,7
18,2
11,4
8,3
6,6
25,4
Share
31%
24%
16%
8%
5%
3%
2%
2%
8%
Total leisure outbound trips
Itineraries & Culture
Table 39. Size of the European outbound travel per market segments (number of trips (millions))
Sun & Sea
a2.
122
333,6 100%
Source: Based on the Cyprus brand adoption survey
To validate the reliability of THR approach, results derived from the approach were compared with the data provided by the world’s largest provider of international travel & tourism, IPK International, and although there were differences, they are within the accepted margin of error. Based on the analysis, estimates made by THR are reasonable and can be used as a basis for further estimates.
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a3.
123
Estimates of Cyprus’ potential in European outbound travel demand Based on the analysis of the Cyprus brand adoption survey, THR could estimate a potential for Cyprus in European outbound demand, based on the methodology employed in the brand adoption process. Questions included in the brand adoption process analysis were the following: 1. “Are you aware that Cyprus is a tourism destination?” - Awareness 2. “Are you familiar with Cyprus tourism offer?” – Understanding 3. “Do you consider it attractive?” – Attractiveness 4. “Do you find it to be affordable?” – Affordability 5. “Are you planning on visiting Cyprus in the short/mid-term?” – Purchase intention Figure 85. Results of the brand adoption process analysis (total sample) Acquired potential
Lost potential
6%
60% 100%
94%
5%
40% Total universe
Awareness
Understanding
Acquistion ratio =
55%
95% Attractivness
Total with purchase intention
Total aware
=
20%
45%
80%
Affordability
Purchase intention short/mid term
13%
Since the brand adoption survey carried out for Cyprus was performed only in the top 6 source markets for Cyprus, to estimate the size of the segment in the other 26 countries, THR assumes that a similar perception of Cyprus exists among travellers there. Hence, the weighted average from 6 source markets included in the brand adoption survey was applied. Table 40. Estimates of Cyprus potential in European outbound travel demand Total Universe
Awareness of Cyprus
Understanding of Cyprus tourism offer
Attractiveness towards
66.253.079
63.267.896
Cyprus
Affordability of Cyprus
Intention to visit Cyprus in short/mid term
31.041.398
24.743.689
Country
Total
166.809.395 155.688.697
Source: Based on Cyprus brand adoption survey
Similar to the formula used in step 2, Cyprus’ potential market share (calculated using the number of people) will be converted into the number of trips for further estimates, which results in a total number of 49.487.377 trips (people traveling abroad for personal purposes X 2 trips abroad per year)
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Cyprus’ potential in European outbound travel demand per market segment To estimate Cyprus’ potential demand in European outbound travel demand per market segment, the following approach was conducted: Figure 86. THR approach to estimation of market segments potential for Cyprus
Based on the answers of the questions above, THR multiplied the potential of Cyprus in European outbound travel demand per a weighted average of the answers and then obtained the potential for Cyprus in the European outbound travel per market segment:
Itineraries & Culture
City breaks
Nature
Adventure
Wellness & Medical
Sailing & Yachting
Sports
Total (.000s)
49.487
19.360
14.881
1.867
3.645
1.947
738
3.198
706
3.145
Share
100%
39%
30%
4%
7%
4%
1%
6%
1%
8%
Others
Sun & Sea
Table 41. Potential for Cyprus in European outbound travel per market segments (thousands of trips)
Potential for Cyprus (short mid term)
b.
124
Source: Based on the Cyprus brand adoption survey
Figure 87. Potential for Cyprus in European outbound travel per market segments (mill. trips) 19,4 14,9
3,6
Sun & Sea
Itineraries & Culture
Nature
3,2
Sailing & Yachting
1,9
1,9
Adventure
City Breaks
Source: Based on the Cyprus brand adoption survey Updated version 23.03.2017
0,7
0,7
Wellness & Medical
Sports
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Not surprisingly, Sun & Sea has the highest potential in terms of total tourists for Cyprus with 19,3 million trips. However, its potential share of 39% is clearly below the current share, which is estimated to be in between the region of 70-80%. This fact is clearly beneficial for Cyprus, as it is aligned with THR’s vision regarding the need to diversify the product portfolio of the destination. The analysis clearly shows potential for Cyprus in other segments, primarily for Itineraries & Culture with an estimated potential of close to 15 million trips.
Product potential to attract visitors per source markets As the analysis has been done considering each source market individually, based on the methodology explained previously, THR has been able to provide the approximate growth potential per market segment for each of the main European source markets.
Sun & Sea
Itineraries & Culture
City breaks
Nature
Adventure
Wellness & Medical
Sailing & Yachting
Sports
Table 42. Market segments’ potential for Cyprus in European outbound travel per source markets (thousands of trips)
Russia
15.321
5.975
4.060
383
1.149
766
224
2.222
77
UK
6.703
2.748
2.044
234
335
268
34
311
101
Germany
6.090
2.466
1.948
365
578
152
101
132
122
France
4.741
1.659
1.751
213
426
190
63
23
95
Ukraine
2.419
942
742
98
169
84
46
74
45
Poland
1.438
560
441
58
101
50
27
44
27
Belgium
1.035
403
317
42
72
36
20
32
19
Switzerland
830
323
254
33
58
29
16
25
15
Denmark
686
267
210
27
48
24
13
21
13
Finland
455
177
139
18
32
16
9
14
8
Sweden
214
96
53
6
8
5
8
4
5
Norway
214
99
49
5
9
3
2
14
8
Greece
126
49
38
5
8
4
2
4
2
Others
9.215
3.596
2.835
380
652
319
174
280
170
Total
49.487
19.360
14.881
1.867
3.645
1.946
739
3.200
707
Share
100%
39%
30%
4%
7%
4%
1%
6%
1%
Potential for Cyprus (short mid term)
b1.
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3.3.4
126
Market growth potential in low season
a.
The problem of seasonality
a1.
The seasonality of tourism demand in Cyprus Seasonality remains, even today, one of the main concerns for managers of tourist destinations – particularly those in which sun & sea represents the main business. The complexity of the seasonality phenomenon involves many factors and is difficult to manage as it also requires combined and coordinated actions by many stakeholders, both public and private. In Cyprus, seasonality of international tourist arrivals is becoming more pronounced every year. In 2005, 74% of arrivals were in the May-October period, while in 2015, this percentage increased to 78%. Figure 88. Evolution international tourist arrivals per months in Cyprus (2005 – 2015) 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Jan
Feb
Mar
Apr
May
Jun
2005
Jul
2010
Aug
Sep
Oct
Nov
Dec
2015
Source: CYSTAT
One of the reasons for this increase in the seasonality is the increase on the percentage of arrivals for holiday purposes, as seasonality is even more pronounced in those destinations where the main motivation is holidays.
Figure 89. Percentage of holiday arrivals in Cyprus (May-October) from 2005 to 2015 84% 82%
81,0%
80% 78%
In Cyprus, whilst in 2005 the percentage of arrivals for holiday purposes in the period May-October was 76,8%, in 2015 increased to 82,4%.
82,4%
76,8%
76% 74% 2005
Holiday arrivals Source: CYSTAT
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2010
2015
CYPRUS TOURISM STRATEGY
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127
The seasonality of tourism demand in Europe An analysis of the arrivals within the EU shows that 32% of total inbound arrivals take place in the low season (period November-April). This means that the total number of trips during this season within Europe is around 130 million, which represents a high potential market. Figure 90. Share of inbound arrivals per month to Europe, Spain, and Cyprus in 2015 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
14% 10%
14%
11%
11% 8%
7% 4%
5%
Jan
Feb
6%
Mar
Apr
Europe
May
Jun
Jul Cyprus
Aug
Sep
Oct
5%
5%
Nov
Dec
Spain
Source: Arrivals at tourist accommodation establishments, monthly data, Eurostat (2015)
This potential market, of more than 130 million of tourists visiting Europe during the low season indicate that the problem that most destinations suffer during this period is not related to the demand but to the product. A clear example is Spain. Although Mediterranean countries are perceived primarily as Sun & Sea destinations in the eyes of the tourists, destinations like Spain, with a very diverse tourism portfolio, have succeeded in managing to also attract tourists in the winter months as it is shown in the graphic. Spain can do that thanks to the great variety and quality of products offered, including culture and itineraries, gastronomy, and cities such as Madrid or Barcelona.
a3.
Seasonality in other Mediterranean destinations However, as it is mentioned before, the ideal seasonality, with a balanced distribution of visitors throughout the year, is a difficult goal to reach in destinations which, like Cyprus, have based their tourism development only on the sun & sea market and tour operators. Proof of this is that most of the sun & sea destinations in the Mediterranean, whose constant tourism policy objective has been “fighting against seasonality� for over 30 years, still have seasonality curves demonstrating high concentration in the summer months.
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The figure below illustrates the monthly distribution of international tourist arrivals to Cyprus compared to a selected competitive set with destinations in the Mediterranean that have a similar tourism offer: Greece, the Balearic Islands, and Malta. Figure 91. International tourist arrivals by month in 2015 in four selected destinations (as % of arrivals) 25%
20%
15%
10%
5%
0%
Greece
Cyprus
Balearic Islands
Malta
Source: CYSTAT, IBESTAT, Malta Airport Statistics and SETEGR
In the table below, the share of arrivals per season among the competitive set in 2015 is detailed. Table 43. Shares of arrivals per season among the competitive set in 2015 Competitive Set Malta
Cyprus
Balearic Islands
Greece
Average
Low season (Nov-Apr)
35%
22%
14%
13%
15%
Pre-and-Post season (May, Jun, Sep, Oct)
40%
48%
48%
47%
47%
Peak season (Jul-Aug)
25%
30%
38%
40%
38%
Source: CYSTAT, IBESTAT, Malta Airport Statistics and SETEGR
As shown, Cyprus does not have the most unbalanced seasonality curve. During the low season in 2015, Cyprus attracted 22% of the total arrivals and performed significantly better than the average of the competitive set. Furthermore, during the pre-and-post season, Cyprus achieved the best performance in the competitive set, being able to attract almost half of its total arrivals in the “shoulder� months. These two facts combined mean that the total amount of arrivals outside the high season represent 70% of the total arrivals of the destination. Updated version 23.03.2017
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The most unbalanced seasonality curve corresponds to Greece and the Balearic Islands. These destinations, although they are among the most important ones in the Mediterranean, still experience a demand peak during July and August. During the high season, both destinations receive approximately 40% of the total arrivals in one year. Finally, the best performance during the low season and the least intense seasonality corresponds to Malta. During the low season in 2015, Malta attracted approximately 37% of the total arrivals of the year, which is 20% higher than the average of the group. This significantly higher performance of Malta outside the peak season led THR to analyse in more detail its seasonality and its historical trend. Figure 92. Shares of arrivals per month in Malta in 2015 compared to 2005 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4%
2015
2005
Source: Malta International Airport Statistics (2015)
In this graphic, it can be observed that, during the last 10 years, the monthly share of arrivals in Malta has not changed significantly. Table 44. Shares of arrivals per season in Malta (2000 – 2015) 2005
2010
2015
Low season (Nov-Apr)
34%
34%
35%
Pre-and-Post season (May, Jun, Sep, Oct)
40%
41%
40%
Peak season (Jul-Aug)
26%
25%
25%
Source: Malta International Airport Statistics (2015)
However, Malta’s case shows that there is room for continuous improvement for a country like Cyprus, which share similarities with Malta like the tourism offer, the mix of the source markets, the natural isolation, and the geographical location. .
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130
Cyprus performance compared with Malta According to the country’s Statistics Office, in 2015 Malta managed to attract 35% of the total arrivals in the low season, placing Malta in the top position of the Mediterranean sun & sea destinations in terms of decreasing seasonality. In comparison, the share of arrivals in the low season in Malta is 13 p.p. higher than Cyprus’ figure, which was 22% in 2015. Figure 93. Share of annual arrivals in November – April (2015) 35% -13 p.p.
22%
Malta
Cyprus
Source: National Statistical Office of Malta and Cyprus Statistical Office
One of the reasons for this difference is Malta’s position in the main European source markets. Although Cyprus traditionally fares better in the UK market, Malta is currently better known and understood in Germany, Italy, France, and Spain, to name a few. As shown in the figure below, Cyprus is attracting 26% less arrivals from those markets in the low season. Figure 94. Low season arrivals in Malta and Cyprus in top European source markets in 2015 -26%
% of Cyprus compared with Malta
374,545
275,395
+25% 221,885 178,045 -95% 99,803
-39% 58,439
35,411
5,212 UK
Italy
-93%
-66%
Germany Malta
38,258
50,576 12,887
France Cyprus
Source: National Statistical Office of Malta and Cyprus Statistical Office *Period November-April
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3,751 Spain
Total (5 markets)
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a4.
131
Good practices to reduce seasonality – The Canary Islands case The successful case of the Canary Islands also shows that there is still some room for improvement regarding seasonality. The Canary Islands, which also base its value proposition on Sun & Sea, have achieved an outstanding performance over more than 30 years in regard to reducing seasonality. Figure 95. Cyprus’ seasonality curve compared with the Canary Islands’ in 2015 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Jan
Feb
Mar
Apr
May
Jun
Cyprus
Jul
Aug
Sep
Oct
Nov
Dec
Canary Islands
Source: Frontur 2015 and CYSTAT 2015
In 1970’s, the Canary Islands began a process based on positioning the destination as a “all year round” destination for Europeans. Despite the strong irruption of Caribbean destination in 1990s, nowadays the Canary Islands are still the undisputed leader for sun & sea trips in winter for almost every European source markets. Table 45. Shares of arrivals per season among the competitive set in 2015 Canary Islands
Malta
Cyprus
Balearic Islands
Greece
Low season (Nov-Apr)
53%
35%
22%
14%
13%
Pre-and-Post season (May, Jun, Sep, Oct)
30%
40%
48%
48%
47%
Peak season (Jul-Aug)
17%
25%
30%
38%
40%
Source: CYSTAT, IBESTAT, Malta Airport Statistics, SETEGR and Frontur
Although the Canary Islands and the Mediterranean destinations in the competitive set have a similar portfolio of assets, the Canary Islands sustain its all year tourism model through three main “do-wells”, which bring a competitive advantage. The do-wells of the Canary Islands are based on: •
Developing a strong Pre-and Post Season (PPS) and Winter value proposition and offering.
•
Stimulating the increase of air capacity and distribution by the travel trade PPS and Winter season.
•
Communicating efficiently the PPS and Winter Season offering in the targeted markets.
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The unexploited “white space”: The “Canary Islands of the Mediterranean” Surprisingly, no Mediterranean destination has yet positioned itself as the “Canary Islands of the Mediterranean”. Therefore, Cyprus could become a great candidate for the position, as the country has one of the best year-round climates in the Mediterranean. To demonstrate this, THR analysed Cyprus’ weather compared with the competitive set. The analysis is based on two variables: the monthly average maximum air temperature and the monthly average sea temperature. The analyses conducted show that Cyprus is positioned as the destination with the highest average air temperature and also with the highest average sea temperature during the year. Figure 96. Average max. temp. by country
Figure 97. Average sea temp. by country
Turkey Malta
Dec
Oct
Nov
Sep
Jul
Aug
Jun
Apr
May
Mar
Feb
Dec
Nov
Sep
Oct
Aug
Jul
Jun
May
Apr
Mar
Feb
Cyprus
Jan
30 28 26 24 22 20 18 16 14 12 10
40 35 30 25 20 15 10 5 0
Jan
a4.1
132
Greece
Cyprus
Greece
Côté d'Azur (France)
Turkey
Côte d'Azur (France)
Sun Coast (Spain)
Malta
Sun Coast (Spain)
Source: BBC Weather Centre
The research conducted by THR with more than 1700 interviewees in 6 different source markets (i.e. Russia, UK, France, Germany, Sweden and Norway) states that the weather is one of the top assets of Cyprus, since approximately 28% of the respondents agreed that the good weather is Cyprus’ main attraction. However, one key asset to become the “Canary Islands of the Mediterranean”, is the flight capacity, especially during low season which is one of the main weaknesses of the destination.
Source: NOAA (National Atmospheric Administration)
Oceanic
and
Figure 98. Main attractions of Cyprus 28%
Weather
13%
Beaches
10%
Landscape
9%
Culture
7%
Friendly people Gastronomy
4%
Flight connection
3%
Affordable
3%
Relax Safe
2% 1%
Source: Brand Adoption process
Therefore, to increase the number of arrivals in the low season, Cyprus must stimulate and increase its air capacity. Also, nothing can be done without strengthening its value proposition during the pre-and post-season and provide value offering during winter. Finally, Cyprus must put efforts in targeting markets for the low season and communicate efficiently to them the value proposition offered during the low season.
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b.
133
Growth potential for Cyprus in the low season As discussed before, managing seasonality in the Mediterranean destinations is a complicated task and a process that requires high efforts. However, Cyprus has tourist assets that would allow the destination to have room for improvement in the low season. Although it is difficult to determine a market potential, because there is no clear methodology and data available to precisely calculate the potential arrivals in the period November – April, THR has developed indirect procedures to provide an estimate of this potential. The procedure is based on two different parts: The first one, is based on calculating the potential in the European outbound market based on the answers obtained in the brand adoption survey. The answers to the question: “Do you consider Cyprus as an all year-round destination” provides an insight regarding the potential of Cyprus for the period November – April. Then, the second part is based on simulating that Cyprus performs similarly to Malta in the low season and then test if the results obtained are reasonable, comparing them with the arrivals during the period November - April of a selected group of competitors.
b.1
Perception of Cyprus as an “all year-round destination” THR has analysed tourists’ perceptions regarding Cyprus as an all year-round destination based on the answers obtained in the Brand Adoption Survey from 1716 interviewees in 6 different source markets to the question: “Do you consider Cyprus as an all year-round destination?” Table 46. “Do you consider Cyprus as an all year-round destination?” Average Russia
France Germany
UK
Norway Sweden
Completely
24%
37%
24%
22%
28%
13%
11%
Somewhat
44%
37%
51%
46%
50%
31%
34%
Not particularly
18%
15%
9%
15%
13%
32%
25%
Don’t know/Others
14%
11%
16%
17%
9%
24%
30%
Source: Brand Adoption Process
To quantify the results and therefore obtain an approximate potential per source market, THR assumed that the perception obtained from each tourist is related to a specific ratio. Answers “Completely” considering Cyprus as an all year-round destination were fully considered (100%) but on the other hand, “Somewhat” answers were multiplied by a reduction factor of 0,1 (10%), as the potential for Cyprus to attract tourists with that perception is lower. Table 47. Perception of Cyprus obtained in the Brand Adoption Survey Completely
Somewhat
Total compounded
Russia
37%
37%
41%
UK
28%
50%
34%
France
24%
51%
29%
Germany
22%
46%
27%
Norway
13%
31%
16%
Sweden
11%
34%
15%
Average
24%
44%
28%
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Once the perception of tourists had been analysed, THR developed an analysis to obtain the travel intention to Cyprus based on the acquisition ratio obtained from the Brand Adoption Process. The questions included in the brand adoption process analysis were the following: 1. “Are you aware that Cyprus is a tourism destination?” - Awareness 2. “Are you familiar with Cyprus tourism offer?” – Understanding 3. “Do you consider it attractive?” – Attractiveness 4. “Do you find it to be affordable?” – Affordability 5. “Are you planning on visiting Cyprus in the short/mid-term?” – Purchase intention These conversion ratios provide insights of the perceptions of tourists regarding Cyprus in each source market. The results of the Brand Adoption Survey for the six source markets interviewed were the following: Table 48. Conversion ratio obtained during the Brand Adoption Survey per source market Total Universe
Aware
Russia
100%
-3%
-45%
-1%
-3%
-21%
27%
France
100%
-6%
-48%
-1%
-3%
-24%
18%
UK
100%
-5%
-54%
-2%
-4%
-21%
14%
Germany
100%
-12%
-55%
-2%
-4%
-17%
10%
Norway
100%
-6%
-55%
-6%
-9%
-19%
5%
Sweden
100%
-8%
-80%
-1%
-2%
-6%
3%
Understand
Attractive
Affordable
Purchase Intention
Conversion Ratio
Source: Based on the results of the Brand Adoption Survey
However, since the Brand Adoption Process was carried out in only 6 source markets, THR was not able to identify the potential in the low season for other European Countries. Thus, to estimate their potential, THR applied to them the average conversion ratio obtained in the survey: Table 49. Average conversion ratio obtained in the Brand Adoption Survey
Average
Total Universe
Aware
100%
-6%
Understand
-56%
Attractive
-2%
Affordable
-20%
Purchase Intention
-3%
Conversion Ratio
13%
The population of the analysis is the same considered for the calculation of the growth potential by products (chapter 3.3.3); which is the number of outbound trips of at least 4 consecutive nights for each source market. The estimated size of the market is represented in the number of people traveling for personal purposes for at least 4 nights. To convert the estimated number of persons into total number of trips, THR assumed, based on a market research, that travellers take on average 2 holidays lasting at least 4 consecutive nights per year.
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The following table shows THR process in estimating the size of the total outbound travel market from Europe staying at least 4 consecutive nights abroad. Figure 99. Process to estimate the size of the European outbound travel market
1
2
3 Population 15+ travelling for personal purposes
Population + 15 years old
Population
4
travelling for personal purposes at least 4 consecutive nights
5
6 At least 4 consecutive nights abroad
Outbound trips for personal purposes at least 4 consecutive nights abroad
Therefore, the following table shows the outbound leisure travel for at least 4 nights abroad from 27 European countries: Table 50. Outbound leisure travel for at least 4 nights abroad from 27 EU countries 1
2
3
4
5
6
Outbound Traveling for Traveling for trips for Population personal personal personal 15+ purposes for Population purposes for purposes for Country Population traveling for at least 4 15+ at least 4 at least 4 personal consecutive consecutive consecutive purposes nights nights nights abroad abroad 64.735.958 Germany 80.767.500 70.186.958 53.342.088 43.740.512 32.367.979 Russia
117.013.830 97.121.479
58.272.888
40.791.021
28.553.715
57.107.430
UK
64.351.200
53.025.389
34.837.680
30.657.159
23.299.441
46.598.881
France
65.835.600
53.590.178
38.209.797
32.096.230
12.838.492
25.676.984
Sweden
9.644.900
7.995.622
6.124.647
5.144.703
3.395.504
6.791.008
Norway
5.174.200
4.242.844
3.394.275
3.258.504
2.052.858
4.105.715
64.301.406
128.602.814
Others Total
338.550.200 287.558.266 153.379.888 109.267.079 681.337.430 573.720.736 347.561.263 264.955.208
166.809.395
333.618.790
Source: 1) People and Society, Central Intelligence Agency (CIA), 2016 Source: 2) Demographic data, Tourism Economic, 2016 Source: 3) 4) 5) Data for EU countries from the European Commission (2016), for Russia Federal Statistics source: Service of the Russian Federation
Once the total population of the analysis is obtained, the total potential is calculated based on the % of people considering Cyprus as an all year-round destination and the conversion ratio obtained in the questions of the Brand Adoption Survey. .
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Table 51. Cyprus’ Potential in the low season for the European outbound travel market Outbound trips of at least 4 consecutive nights abroad (2015)
Consider Cyprus as an all year-round destination Yes (%)
Total
Conversion Ratio (BAP)
Total Potential
Russia
57.107.430
41%
23.414.046
27%
6.321.792
UK
46.598.881
34%
15.843.620
14%
2.218.107
Germany
64.735.958
27%
17.478.709
10%
1.747.871
France
25.676.984
29%
7.446.325
18%
1.340.339
Ukraine
19.202.602
28%
5.376.729
13%
698.975
Netherlands
17.131.151
28%
4.796.722
13%
623.574
Poland
11.421.342
28%
3.197.976
13%
415.737
Italy
11.388.088
28%
3.188.665
13%
414.526
Spain
9.881.664
28%
2.766.866
13%
359.693
Czech Rep.
8.303.586
28%
2.325.004
13%
302.251
Belgium
8.217.437
28%
2.300.882
13%
299.115
Austria
6.987.324
28%
1.956.451
13%
254.339
Switzerland
6.590.362
28%
1.845.301
13%
239.889
Denmark
5.447.071
28%
1.525.180
13%
198.273
Finland
3.617.779
28%
1.012.978
13%
131.687
Ireland
3.342.265
28%
935.834
13%
121.658
Hungary
2.812.544
28%
787.512
13%
102.377
Slovakia
2.646.626
28%
741.055
13%
96.337
Romania
2.326.897
28%
651.531
13%
84.699
Portugal
1.804.683
28%
505.311
13%
65.690
Slovenia
1.559.709
28%
436.719
13%
56.773
Lithuania
1.049.096
28%
293.747
13%
38.187
Greece
1.004.781
28%
281.339
13%
36.574
Norway
4.105.715
16%
656.914
5%
32.846
Croatia
872.293
28%
244.242
13%
31.751
Latvia
816.646
28%
228.661
13%
29.726
Sweden
6.791.008
15%
1.018.651
3%
30.560
Estonia
730.373
28%
204.504
13%
26.586
Luxembourg
642.490
28%
179.897
13%
23.387
Bulgaria
567.876
28%
159.005
13%
20.671
Malta
238.127
28%
66.676
13%
8.668
Total
333.618.788
101.867.053
16.372.656
Source: 1) People and Society, Central Intelligence Agency (CIA), 2016 Source: 2) Demographic data, Tourism Economic, 2016 Source: 3) 4) 5) Data for EU countries from the European Commission (2016), for Russia Federal Statistic 6) BAP (Brand Adoption Process) Survey
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As it is shown in the table above, Cyprus would have the potential to attract approximately 16 million trips in the low season. These trips do not necessary need to take place only in one year, as the number obtained is an estimation of the total market potential, but does not specify when would these trips occur. The source market with the highest potential in the low season is Russia. Based on the analysis, in an ideal scenario, more than 6 million trips made by Russians could potentially to Cyprus during the period November - April. UK, with more than 2 million potential arrivals in the low season, represents the second highest potential source market. However, the conversion ratio compared to Russia is significantly lower. Then, Germany and France also show great potential, being some of the most important outbound markets in the world. Finally, Nordic countries (Norway and Sweden) are the countries showing the least potential to bring tourists to Cyprus during the period November-April, as the conversion ratio obtained during their analysis is the lowest among the source markets, b1.1
Growth potential by 2030 Furthermore, THR considers that the potential in the low season could grow by the next few years, according to the global demand trend and the growth projections for Cyprus’ demand considering the adoption of the Premium Demand Strategy. To calculate the growth of the total population travelling abroad for at least 4 consecutive nights, THR assumed that the total outbound demand growth will be the same as Cyprus’ growth rate per year. Thus, it is assumed that the total outbound travel will increase 4,1% per year from now until 2030. Table 52. Estimated growth of the total international arrivals to Cyprus according to the Premium Destination Strategy Total demand
2015
2030
CAGR
2.659.400
4.848.804
4,1%
Also, the conversion ratio could grow by the next years if Cyprus would perform a strategy focused on reducing seasonality. Based on previous experience, THR estimates that if Cyprus adopts strategic actions, such as developing new market segments, conducting a premium demand strategy, and performing marketing actions to promote tourism during low season, it would help to improve brand awareness, the communication of its tourist attractions, and the intention to visit the destination. Thus, based on THR estimations, the potential in the period November - April could gradually increase 1,8% CAGR each year, reaching a 30% increase between now and 2030. Table 53. Estimated growth assigned to the conversion ratio obtained in the Brand Adoption Survey due to the impact of Marketing actions Current conversion ratio
Potential Conversion ratio (2030)
CAGR
Russia
27%
35%
1,8%
France
18%
24%
1,8%
UK
14%
18%
1,8%
Germany
10%
13%
1,8%
Norway
5%
7%
1,8%
Sweden
3%
4%
1,8%
Average
13%
17%
1,8%
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According to these two assumptions, THR presents two different scenarios to calculate the future growth potential: •
Scenario 1: Cyprus does not perform specific marketing actions in the low season, and therefore the potential demand increases only according to the global trends (i.e. 4,1%)
•
Scenario 2: Cyprus perform strategic marketing actions to promote the destination and reduce seasonality, which increases the conversion ratio in the Brand Adoption Survey by 30% between now and 2030 (i.e.1,8% annually). This generates a higher potential demand, that also grows at 4,1% annually following the global trends.
The following table shows the total potential arrivals in the low season for Cyprus in the next 15 years based on the aforementioned assumptions: Table 54. Comparison of Cyprus potential demand in the low season with and without Marketing Actions Without Marketing Actions Potential Demand low season
With Marketing Actions
Growth (vs 2015)
Potential demand low season
Growth (vs 2015)
Difference 2030 vs 2015
2015
15.565.211
-
15.565.211
-
-
2016
16.201.121
4%
16.486.987
6%
+285.866
2017
16.863.011
8%
17.463.351
12%
+600.339
2018
17.551.943
13%
18.497.536
19%
+945.593
2019
18.269.021
17%
19.592.965
26%
+1.323.944
2020
19.015.394
22%
20.753.266
33%
+1.737.872
2021
19.792.261
27%
21.982.280
41%
+2.190.020
2022
20.600.865
32%
23.284.077
50%
+2.683.212
2023
21.442.506
38%
24.662.967
58%
+3.220.461
2024
22.318.531
43%
26.123.515
68%
+3.804.984
2025
23.230.345
49%
27.670.557
78%
+4.440.212
2026
24.179.412
55%
29.309.215
88%
+5.129.803
2027
25.167.252
62%
31.044.915
99%
+5.877.663
2028
26.195.450
68%
32.883.404
111%
+6.687.954
2029
27.265.655
75%
34.830.769
124%
+7.565.114
2030
28.379.582
82%
36.893.457
137%
+8.513.875
It is important to mention that the results obtained aim to show that the number of European outbound travellers potentially interested in going to Cyprus in the low season is forecasted to grow. The second important fact to remark is that it is very important to perform marketing actions to promote the destination and increase the brand awareness, since according to THR assumptions, it could generate an extra demand potential for the European outbound leisure travellers to Cyprus of 8,5 million trips more by 2030.
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b2.
Feasibility study
b2.1
Emulating Malta The results obtained in the previous section based on the methodology conducted by THR show the total potential arrivals that could receive Cyprus in the low season for each of the 27 European source markets. In addition, THR wants to provide a second approach based on comparing Cyprus with a similar country performing better in the low season, to estimate the potential for improvement of Cyprus. The selected destination is Malta. Although Cyprus and Malta share most of its strategic assets, Malta currently has a better competitive performance than Cyprus in terms of seasonality as shown in the table below: Table 55. Share of arrivals per season to Cyprus compared with Malta 2015 Cyprus
2015 Malta
Low season (Nov-Apr)
22%
35%
+13
Pre-and-Post season (May, Jun, Sep, Oct)
48%
41%
-7
Peak season (Jul-Aug)
30%
24%
-6
Source
Difference (p.p.)
Source: Malta International Airport Statistics (2015) & CYSTAT
Therefore, to evaluate Cyprus’ potential for improvement in the reduction of seasonality, THR assigned Malta’s monthly share to the total annual arrivals of Cyprus in 2015. Consequently, by assigning these shares, it is shown how the demand would have been in 2015 if Cyprus had performed like Malta in the low season and attracted 35% of the total annual arrivals during the period November – April. Table 56. Cyprus arrivals per month considering Malta’s seasonality
Arrivals
(%)
(%)
Cyprus (2015) (with Malta’s seasonality) Arrivals (%)
January
41.799
1,6%
5%
120.806
5%
+79.007
February
50.709
1,9%
5%
123.041
5%
+72.332
March
97.479
3,7%
6%
162.783
6%
+65.304
April
201.495
7,6%
9%
232.433
9%
+30.938
May
307.449
11,6%
10%
259.328
10%
-48.121
June
336.967
12,7%
10%
267.940
10%
-69.027
July
414.527
15,6%
12%
325.356
12%
-89.171
August
392.272
14,8%
12%
324.966
12%
-67.306
September
360.899
13,6%
11%
287.182
11%
-73.717
October
269.363
10,1%
10%
261.041
10%
-8.322
November
108.093
4,1%
6%
154.051
6%
+45.958
December
78.348
2,9%
5%
140.474
5%
+62.126
Total
2.659.400
Cyprus (2015)
Malta (2015)
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2.659.400
Difference
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The table shows that, by having the same monthly share of arrivals as Malta, Cyprus would receive 350.000 more tourists in the low season and have a flatter seasonality curve. Figure 100. Cyprus’ potential seasonality curve emulating Malta’s performance in low season 20%
15%
10%
5%
0%
Cyprus 2015
Cyprus (Malta's share)
Source: Malta International Airport Statistics (2015) & CYSTAT
Also, assuming that the total demand will remain equal, the increase in winter months would involve a reduction of 156.000 tourists during the peak season which means there would be less tourism saturation in summer months. Finally, the number of tourists in the pre-and-postseason would also be lower, suffering a decrease of 199.00 tourists. Table 57. Share of arrivals per season to Cyprus compared with Malta 2015 Cyprus
2015 Cyprus (with Malta’s seasonality)
Difference
Arrivals
(%)
Arrivals
(%)
Arrivals
p.p.
Low season (Nov-Apr)
585.068
22%
933.588
35%
+355.665
+13
Pre-and-Post season (May, Jun, Sep, Oct)
1.276.512
48%
1.075.491
41%
-199.187
-7
Peak season (Jul-Aug)
797.820
30%
650.322
24%
-156.477
-6
Source: Malta International Airport Statistics (2015) & CYSTAT (2015)
THR considers that a similar monthly distribution of arrivals as Malta would bring improvements to Cyprus’ tourism. However, reaching that seasonality curve would require time and specific actions to be performed, like the development of new markets segments to have a more varied offer and therefore attract tourists all year-round, and also the performance of marketing actions to promote the tourist attractiveness of Cyprus during the shoulder and low season. However, there is the need to prove the feasibility of this theoretical analysis by comparing the results obtained with other Mediterranean destinations.
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Potential arrivals in the low season compared to other Mediterranean destinations To prove that the results obtained by reaching the same seasonality curve as Malta are reasonable and feasible, THR has compared the potential arrivals in the low season for Cyprus with the current arrivals of a selected group of competitors formed by Mediterranean destinations (i.e. Balearic Islands, Greece, and Malta) that offer a similar tourism offer as Cyprus, and the Canary Islands, considered as a success case for reducing seasonality. Table 58. Monthly arrivals to Cyprus (Malta’s seasonality) compared to competitors (2015) Canary Islands
Balearic Islands
Greece
Cyprus (with Malta’s seasonality) (%) Total
(%)
Total
Malta
(%)
Total
(%)
Total
(%)
Total
Jan
9%
1.035.430
2%
365.605
1%
162.332
5%
120.806
5%
104.941
Feb
9%
1.008.597
2%
295.652
1%
171.736
5%
123.041
5%
106.882
Mar
10%
1.101.115
2%
362.098
3%
369.343
6%
162.783
6%
141.405
Apr
8%
904.407
3%
557.496
6%
833.303
9%
232.433
9%
201.908
May
7%
810.247
8%
1.467.134
11%
1.500.122
10%
259.328
10%
225.271
Jun
7%
787.876
13%
2.372.846
15%
2.004.511
10%
267.940
10%
232.752
Jul
8%
947.573
18%
3.263.921
18%
2.434.546
12%
325.356
12%
282.628
Aug
9%
1.000.852
22%
3.885.717
20%
2.641.462
12%
324.966
12%
282.289
Sep
7%
864.902
17%
2.963.439
14%
1.953.910
11%
287.182
11%
249.467
Oct
9%
1.054.770
9%
1.547.626
8%
1.072.340
10%
261.041
10%
226.759
Nov
9%
1.038.992
2%
435.303
2%
220.384
6%
154.051
6%
133.820
Dec
9%
1.018.121
2%
402.744
1%
160.512
5%
140.474
5%
122.026
Total
11.572.882
17.919.581
13.524.501
2.659.400
2.310.148
Source: CYSTAT, IBESTAT, Malta Airport Statistics and SETEGR, Fontur
The analysis states that similar destinations currently attract an equal or higher number of travellers during the low season which means that there is inbound market potential in the winter months for Mediterranean destinations with similar tourism offer than Cyprus. Table 59. Share and total arrivals during the period November – April in 2015 % of arrivals in the period Nov-Apr
Total arrivals Nov-Apr
Canary Islands
53%
6.106.662
Greece
13%
2.418.898
Balearic Islands
14%
1.917.610
Cyprus (Potential emulating Malta’s seasonality curve)
35%
933.588
Malta
35%
810.982
Source: CYSTAT, IBESTAT, Malta Airport Statistics and SETEGR
To conclude, the comparison of arrivals shows that the potential in the low season for Cyprus, considering the reduction of seasonality following Malta’s monthly distribution of arrivals, is logical and reasonable. Updated version 23.03.2017
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Summary and implications for Cyprus 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 healthier activities in their trips and they are willing to pay more for these needs to be met. In order to make the most of these opportunities, Cyprus’ tourist businesses, as well as the Government, will have to evolve and innovate in order to adequately respond to these new needs. Implications for Cyprus 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 access by tourists by 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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• 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 and niche meetings 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. Seniors. Exploiting this opportunity requires developing value propositions based on familiarity, many activities, opportunities for socialisation and healthy food, complemented by light medical attention. 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, including but not limited to whale watching, shaman tours, visiting famous battlefields, bird watching, and speleology. 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. Although the numbers are still small, original, and exclusive places to hold memorable meetings where the professional and experiential are combined are increasingly sought out. 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 to 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 began their decision-making process by choosing the activity or experience they wanted to enjoy was almost 30%. In a few years, this number will approach 60%. Implications for Cyprus Cyprus must take advantage of this opportunity by developing a suitable menu of 3 types of experiences: top experiences, brand experiences and signature experiences. These will 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 of 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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Chapter 4 Key issues to be tackled 4.1
SWOT analysis for Cyprus as a tourist destination 4.1.1 The SWOT matrix 4.1.2 Brief description of the SWOT elements
4.2
26 Strategic Questions the Strategy must address
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Introduction The external and internal analysis has collected a large amount of information from market research, interviews, thematic and regional workshops, etc.; much of which can seem confusing when examined in depth. However, from a strategic planning point of view, the analyses have a very specific purpose: to identify those elements that directly affect the possibilities of achieving the vision – distinguishing between those that affect it positively (strengths and opportunities) and those which affect it negatively (weaknesses and threats). The SWOT analysis identifies the Cyprus tourism sector’s existing strengths and weaknesses, its emerging opportunities, and the worrying threats the destination faces. Figure 101. Process used to identify SWOT elements
The long list of elements (both positive and negative) which have been identified throughout the process is presented below. We then display the most relevant 25 elements (strengths, weaknesses, opportunities, and threats) that must be taken into account.
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The SWOT analysis for Cyprus as a tourist destination
Value for stakeholders
Results for Cyprus
Table 60. 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
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
Strategic processes
Strengths in our internal processes; where we excel
15. Extensive experience in tourism management
Strengths in terms of people, culture, core competencies and strategic capabilities
Enablers
4.1
9. Low experiential value of the offer 10. High level of visual pollution 11. Weaknesses in air capacity
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
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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12. 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
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4.1.1 The SWOT matrix The BSC combines both financial and non-financial criteria to provide a more “balanced” view of the destination’s performance, therefore allowing an easier execution of the strategy. The BSC suggests that a destination must be analysed from four perspectives, which are later the basis for the development of objectives, strategy map, measures and targets and initiatives. Together, the financial and consumer perspectives outline what a destination hopes to achieve, whilst the process and people & growth perspectives describe how the destination will implement its strategy. Figure 102. SWOT according to the BSC
Source: Kaplan & Norton “The Execution Premium”
a.
The “results for Cyprus” perspective Incorporates the tangible outcomes of the strategy in traditional financial terms. Financial performance is the ultimate indicator of a destination’s success and describes how to create value for shareholders. Financial objectives include: GDP contribution, revenue, investment requirement, and economic value added, etc.
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149
The “value for stakeholders” perspective Describes objectives and measures that are directly related to the value that is proposed to stakeholders, focusing on their satisfaction. This is a key indicator for forward planning, as even if the current financial picture looks positive, poor performance from this perspective could signify a future decline. Customer objectives include: customer satisfaction, partners’ financial accomplishment, local community happiness, etc.
c.
The “strategic processes” perspective Refers to the critical internal business activities and processes that will satisfy the financial and customer objectives. These define how well the destination is doing and how well it can provide the value expected by customers. Process objectives can be seen in: operations management, customer management, planning and development, etc.
d.
The “competitiveness and management” perspective Identifies the jobs (human capital), systems (information capital) and climate (organisation capital) that support the value-creation processes. Examples of areas in which learning & growth objectives are found are: education and training, investment attraction, management, etc.
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Brief description of the SWOT elements Strengths 1.
Outstanding climatic conditions
Cyprus boasts 330 sunny days per year and the warmest sea temperatures of all European beach destinations. Relaxation and beach activities are possible practically all year round.
2.
Diversity of tourism assets
Within Cyprus, tourists can find its warm climate, great beaches, beautiful landscapes, vibrant towns and idyllic small villages, a rich cultural heritage spanning thousands of years, friendly people, good food, mountains, and much more – a hugely diverse range of tourist activities.
3.
Safety, comfort, and convenience
Staying on and travelling around Cyprus is generally easy and comfortable, due to its excellent road system and the relatively small size of the island. Cyprus has full EU membership, which brings many advantages for Cyprus and EU travellers, as well as the high level of English spoken by its inhabitants.
4.
Attractive and trustworthy place for business
Membership of the European Union and the Euro as a relatively stable currency create a trustworthy and reliable business environment. Many services and sectors are highly developed and very professional. Additionally, the high level of English spoken amongst the majority of Cypriot professionals bolsters communication with international business people.
5.
Extensive experience in tourism management
Cyprus’ degree of professional experience when dealing with small and large international operators, crisis situations, and different type of tourists is invaluable. The country should aim to benefit from its technical know-how, while combining it with innovative thinking to create further progress.
b.
Weaknesses 6.
High seasonality
Despite its good climate all year around, the tourism sector in Cyprus suffers from high seasonality which has been getting worse over the past decade. Most income is generated between June and September - a major problem for investors, entrepreneurs, and employees. This lowers attractiveness, income, and profitability for those involved in the sector.
7.
Weak performance of the sector
The financial situation and profitability of many tourist businesses in Cyprus has arguably been weak and investment remains somewhat low. Averages in lengths of stay, occupancy rates, and above all daily spending, especially outside of hotels, are registering negative trends. Cyprus’ product and its competitiveness are both in decline.
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151
Low experiential value of the offer
Concern has been expressed about the lack of Cyprus’ experiential value, reinforcing what is perceived as a loss of Cypriot identity and Mediterranean personality. This leads to a lower return rate of tourists and a deterioration in Cyprus’ competitiveness as a destination.
9.
High level of visual pollution
“Visual pollution” presents two threats to the development of Cyprus’ tourism: the lack of cultural identity (e.g. “soulless” architecture), pollution through unplanned building activity, unregulated advertising and pollution through illegal waste disposal. Similarly, noise pollution causes problems for tourism development throughout the country.
10. Weaknesses in air capacity There is no national carrier actively serving the interests of the Cyprus government and enterprises – unless you count Charlie Airlines, which recently purchased the now-defunct Cyprus Airways logo to use on their Cyprus-routed planes for the next decade. For many international airlines, traffic to Cyprus is too low to justify additional connections. New local airlines are mainly serving existing key markets and neglecting new potential markets. A general interest in Cyprus among airlines exists, however this needs to be developed further before they increase connections.
11. Lack of a clear Strategy Cyprus today lacks a clear, comprehensive, and duly budgeted strategy. This prevents reasonable consensus amongst key stakeholders as well as the alignment of their actions, which is essential. Without a clear and viable strategy, it will be impossible for Cyprus to produce its necessary growth and development. Nor will it be feasible to implement the key initiatives that make this growth and development possible. Finally, without a precise and strongly endorsed strategy, it is impossible to establish the political efforts required to successfully put it into practice.
12. Lack of strategic thinking, objectives, and planning Planning in both urban and rural environments is lacking a central approach. This needs to follow a selected growth model, which identifies specific destinations, the speed and the type of growth that is appropriate for each of these destinations. National, regional, and local planning interest approaches often conflict in the absence of a clear nationwide tourist development plan, the results of which are often chaotically planned.
13. Poor branding and marketing performance Market development in Cyprus has been hindered in recent years by low marketing budgets and little effort being made. The private sector is almost absent when it comes to common or even supported marketing activities and Cyprus’ brand positioning is rather generic.
14. Weak industry innovation, intelligence, and technology support processes Cyprus, like many other areas that lack research and innovation, presents a low degree of modernisation and persistent inability to adapt to worldwide trends.
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15. Weak governance, cooperation, and management system Tourism has recently suffered from a clear leadership vacuum in Cyprus. One Ministry has to split its resources between areas of responsibility as diverse as Energy, Commerce, Industry, and Tourism. Besides this, the CTO has leadership deficiencies which have led to mutual distrust with the private sector. These deficiencies are dominating the communication between them and hindering their collaboration.
16. Lack of stakeholder trust and collaboration The tourism sector is always highly dependent on collaboration between a range of different ministries and private sector stakeholders. In Cyprus, public-private collaboration is weakened by the mutual distrust mentioned above and unrealistic expectations of the private sector regarding public support. The complicated relationship between national, regional, and local authorities adds to these issues.
c.
Opportunities 17. Opportunities for revenue growth Cyprus has been experiencing a strong growth in tourist arrivals, increasing its financial performance. Growth relates not only to arrivals and overnight stays, but especially to expenditure. Internally, there is room for more upgraded and diversified products and destinations, with more activity in the winter seasons. With added revenue and activity in the winter seasons, productivity will naturally improve.
18. Significant opportunities for targeting new markets and improving the CVP Cyprus is still relatively unknown in many markets. Tour operators and travel agencies in sometimes desperate search of new destinations – especially with the current political crises in various formerly strong destinations – give it a lot of room to grow. By focusing on other markets, not only on the UK and Russia, the CVP will be strengthened as it will be less reliant on merely two markets.
19. International trade and airline interest in Cyprus Tour operator and airline interviews have clearly shown that there is a general interest in Cyprus across many markets. Cyprus is perceived as an attractive potential growth candidate.
20. Opportunities to reduce operational costs Operational costs have, until recently, been an issue for Cyprus. Operational costs are an issue as local employees are used to high salaries in other industries. Products are often outdated, with property and municipal taxes making hospitality sector businesses more expensive when compared to competitors. As an island, a higher number of goods has to be imported. Greece and Cyprus have the highest financing costs in Europe, however there is room for these to be reduced, under a centralised and strengthened legal and regulatory system.
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Threats 21. High market and product portfolio risk The UK and Russia alone account for 59% of tourist arrivals in Cyprus. No other competing Mediterranean destination depends so heavily on just two markets. Some incompatibility between the current product and the requirements of tourists from other markets is inevitably due to the current product focusing heavily on targeting these two markets, as well as a lack of Cypriot personality in the current portfolio.
22. Decreasing net value of the customer journey Cyprus is competing with many other destinations that often have newer and more modern products, more effective marketing and stronger brands, better connections, more efficient strategies and implementation processes, governance, and management systems, to name the most important ones. This has led to a deterioration of the customer experience which must be restored and improved.
23. Weak legal, regulatory, and administrative system Because of its lack of transparency, high degree of complexity, and number of outdated regulations, the legal and regulatory system related to hospitality and tourism has been the subject of criticism in the past.
24. Low commitment towards ‘wise tourism’ and criticism of the current tourism model An excessive concentration on the Sun & Sea segment, the negative effects of high seasonality, the saturation of coastal areas, environmental pollution, and a loss of authenticity in the tourist product, are in strong disagreement with the current leading development model, and exhibit a lack of commitment towards developing smart tourism.
25. Deficiently managed Human Capital Experienced tourism professionals in Cyprus have accumulated great knowledge and experience over the years. However, this knowledge must be updated and adapted to meet travellers’ needs in todays’ highly competitive world of tourism. The absence of innovation and the fact that many can be seen as “stuck in their ways” make it very difficult to have an open and critical collaboration amongst the people involved in the industry.
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26 Strategic Questions the Strategy must address From the 25 previously identified elements, we have developed the Key Issues that must be addressed by the strategy. These have then been transformed into Strategic Questions which the strategy must answer.
Issue Category / Issue 1. Critical issues Goals and objectives Competitive advantage Destination’s positioning Product and market development
Strategic Question
What volume of demand and contribution to Cyprus’ GDP should we achieve by 2030? What Cyprus must do better than or differently from its competitors? Which positioning strategy must be the most appropriate for Cyprus? How can we diversify the tourism products and the source markets?
2. Customer journey’s value Tourism How can we develop a unique system experiences of tourism experiences in Cyprus? Satisfaction on What can we do to improve service services satisfaction? Visual pollution
How can we dramatically reduce visual pollution in Cyprus?
3. Planning and development Master planning How can we substantially improve the planning process?
Growth model Product innovation
Which growth model should Cyprus follow for the next 15 years? Which new innovative products and services should we develop?
4. Investors and collaborators Investors 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? Updated version 23.03.2017
Addressed in
Core Strategy
Core Strategy Core Strategy Core Strategy and Separate Action Plans “Products/segments” and “Priority Source Markets”
Initiative 1 Initiative 2 and Separate Action Plan “Improvement of the Quality” Initiative 3
Initiative 4 and Separate Action Plan “Integrated Spatial Tourism Development for major Tourism Areas” Initiative 5 Initiative 6
Initiative 7 Initiative 8
Initiative 9
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Issue Category / Issue
Strategic Question
5. Marketing and seasonality Brand How can we develop a powerful tourism brand for Cyprus? Conquering tourists
Seasonality
How (and from where) can Cyprus conquer more and higher yielding tourists? How can we transform Cyprus into an ‘all year-round destination’?
6. 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 How can we protect vulnerable elements systematic elements? 7. Competitive Diamond Profitability How can we help to improve the efficiency and profitability of the sector? Legal and How can we substantially improve regulatory Cyprus’ legal and regulatory framework framework? Human Capital How can Cyprus develop the right human capital? Air capacity How can Cyprus achieve its required air capacity? 8. Governance and management 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 monitoring performance?
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Addressed in
Initiative 10 and Separate Action Plan “Cyprus Brand” Initiative 11
Initiative 12 and Separate Action Plan “Seasonality Reduction”
Initiative 13 Initiative 14 Initiative 15
Initiative 16
Initiative 17
Initiative 18 Initiative 19
Initiative 20 Initiative 21 Initiative 22
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Part B The Cyprus Strategy 5.
The Core Strategy
6.
Outcomes, Strategy Directions, and Objectives
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Introduction To achieve the Vision, Cyprus must achieve higher sales and/or lower production costs for the Cyprus tourism industry, finding ways to bring more value to the market for the same effort, or the same value for less effort, or even both at the same time. Without this, it will be difficult to offer attractive investments and grow at the necessary pace with the quality that is required. Therefore, the Strategy is made up of two components: •
A Core Strategy that clearly defines the Strategy’s objectives, the destination’s business scope and the way to differentiate Cyprus’ positioning and offer from that of its competitors so that it can create a sustainable competitive advantage leading to superior financial and social performance.
•
A combination of Strategy Directions indicating the way to tackle each of the Key Issues that need addressing, in order to achieve the Vision and make the Core Strategy turn into a sustainable reality.
The Strategy Directions can be seen as a kind of “vision” for each Key Issue. They are carefully selected 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 gains its full value. The figure below demonstrates the Strategy components in further detail, alongside the logical sequence in which they must be formulated in order to ensure high levels of consistency and alignment.
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Chapter 5 The Core Strategy 5.1
The Strategy’s goal and objectives 5.1.1 The ultimate Goal of the Strategy 5.1.2 The specific objectives of the Strategy
5.2
The competitive advantage 5.2.1 The main advantage 5.2.2 The competitive reinforcers
5.3
The business scope 5.3.1 Product/ segment portfolio strategy 5.4.2 Source market portfolio strategy
5.4
Destination strategy 5.4.1 The alternatives 5.4.2 The proposed Premium Destination Strategy
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The Strategy’s goal and objectives
5.1.1
The ultimate goal of the Strategy
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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 largely depends on its ability to create value for all stakeholders involved: local population, investors, tourists, and collaborators. Figure 103. 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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The “Core Strategy� represents the essence of the Cyprus Tourism Strategy. It has the following components: the Strategy Objectives, the Competitive advantage, and the business scope.
5.1.2
The specific objectives of the Strategy 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 Destination Strategy which is the one that is primarily recommended by the CTS. Important note: However, an equally Premium Destination Strategy, yet softer in terms of growth and development, is proposed later on as an alternative option in case political, financial etc. reasons call for an even more qualitative and restrained growth. Table 61. Tourism demand results of the considered demand positioning (2030) 2015
Premium destination demand 2030
2.656(1)
4.631
Same day Visitors (Thousands)
120(2)
216
Domestic Visitors (Thousands)
1.297(3)
1.366
Tourist volume (Thousands)
4.070
6.214
Tourism Expenditure - (Mill. Euro)
2.352
7.133
Average expenditure / day (Euro)
94(1)
133,91
Average expenditure / stay (Euro)
794(1)
1.147,74
Overnight Stays (Thousands) (4)
30.545
53.263
Required Hospitality Keys (5)
43.144
77.094
-
28.950
Total Tourism Jobs
73.500
119.229
Production (Mill. Euro) [Direct + Indirect]
4.380
12.482
Income (Mill. Euro)
2.391
6.815
Income / GDP
14%
28%
Total revenues from tourism
818
2.330
Main variables International Visitors (Thousands)
New Hospitality Keys to be developed (6)
(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) No distinction is made between accommodation types (hotels/apartments, licensed/unlicensed) (5) 5.000 hotel non-licensed keys (source CTO) are considered for 2030 (6) 5.000 hotel non-licensed keys (source CTO) are not considered for 2030
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To do so, the strategy must focus on improving the performance and revenue yield of the tourism sector, establishing a sustainable tourism model, improving the competitiveness of the industry, developing a diversified product and a strong brand while reducing seasonality, etc. At the same time, the strategy is expected to show how to achieve higher value added tourism, upgrade the current product, sustain mature markets while attracting new ones and address the issues of seasonality and air capacity.
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The competitive advantage The value proposition that Cyprus will offer the market throughout the year, greater than that offered by its competitors, contains four elements: Figure 104. 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 oncein-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 top-level 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-of-theart facilities and natural scenarios. • Cycling: Convenient size of the island and its weather. • Sport stages: Its great climatic conditions.
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The main advantage Taking advantage of a powerful concept: Europe’s year-long best climate The first concept, “the best climate in Europe”, is a factor which is directly related to one of the basic requirements for tourism activity – great climatic conditions – complemented by the fact that it is in Europe, i.e. within the main outbound and inbound region for international tourist trips. The second factor, “all year round”, brings substantial added value which should contribute to the construction of the image of Cyprus as a destination suitable for a wide and diverse range of tourist activities, beyond Sun & Sea. Cyprus represents an ideal place for holidays and trips due to its excellent temperature, uplifting light and positive energy derived from the sun. It makes the Cypriot experience a unique one as it offers the perfect climate for your wellbeing (and happiness!)
5.2.2 a.
•
Benefits for the mind: Cyprus’ climate represents an exciting and inspiring light that activates permanently positive emotional states. It is a climate that promotes happiness. [The climate in Cyprus offers inspiring light and serenity that brings forth permanently positive emotions; it is a climate guaranteed to lift the spirits of every traveller that experiences it.]
•
Benefits for the body: Cyprus’ climate (its light, its temperature, its humidity, etc.) injects energy into its people and activates positive hormonal effects leading to an improved sense of wellbeing. [The Cypriot climate fills people with a good energy that leads to a better sense of comfort, by increasing a beneficial hormone production.]
The competitive reinforcers Reinforcer 1: A great menu of tourism experiences An increasingly sophisticated and demanding consumer is forcing destinations all over the world 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.
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Having the best climate in Europe throughout the year opens up a wide range of possibilities for the design and development of experiences for all audiences, based on a wide range of themes and environments, using the country’s territory and natural and cultural attractions as a base. A system of experiences is something that goes far beyond a system of conventional tourism activities and excursions. Unlike tourism activities, experiences are something truly memorable due to the positive emotions they offer tourists, as a result of their ability to seduce and fascinate. Cyprus will develop a system of experiences which are uniquely creative and diverse, which will become a major source of demand, tourist satisfaction and their subsequent recommendation. 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. Figure 105. Cyprus’ Experiences System
Experience type
Top experiences are state-owned and managed, becoming the centrepiece of travel experiences in Description Cyprus and acting as a benchmark for private operators that wish to design experiences on a smaller scale.
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.
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.
5-7
20
+50
Large/XLarge
Micro/Small
Medium/Small
Responsible
Public
Public Private
Private
Responsibilities
Development & Control
Promotion & tools
Invitation & Filtering
Quantity Size
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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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Top experience 1: Grand Tour of Cyprus 1.
Customer value proposition a. Gain creators: Authenticity, entertainment, customised experiences b. Pain relievers: Well organised routes plus an excellent portfolio of experiences. c. Products and services: Touring routes including gastronomy and wine, cultural heritage, and natural attractions.
2.
Specific target Full spectrum of tourists, but specifically:
3.
•
Motivated cultural tourists
•
Special interest independent travellers
•
Independent couples.
Unique attributes This experience will deliver 3 unique attributes
4.
5.
6.
•
Road and off-road trips, offering fascinating landscapes, memorable natural and cultural experiences, hospitable people, and true authenticity
•
Personalised information to tourists based on their preferences to discover the country on their own and book services and experiences.
•
Experience locals’ culture and hospitability, and destination’s authenticity while discovering the island.
Logistics •
Location: Larnaca – Ayia Napa – Nicosia – Omodos – Polis - Pafos
•
Accommodation: Needed
•
Transport: Yes; Rental car companies, public transport, and very convenient parking system.
•
Internet: Information regarding routes and contact with services providers
Price range/duration/recommended period •
Price-range: On demand
•
Duration: From 5 to 10 days
•
Recommended period: All year round
Owner and manager Owner: Cyprus Experience Agency
7.
Stakeholders involved •
National Tourism Authority
•
National Tourism Planning unit
•
Local Communities
•
Private Sector (Car rental companies, Hospitality brands …)
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Action Plan (Do well´s) 1. Successfully communicate the market strategy 2. Develop and manage an attractive route and its extensions 3. Design and manage the Grand Tour of Cyprus 4. Develop a dedicated “Grand Tour of Cyprus” website 5. Coordinate the development of the Grand Tour of Cyprus with rent-a-car companies 6. Establish a "Grand Tour of Cyprus" accredited network of partners 7.
Conduct specialised educational programs for different stakeholder groups
8. Attract renowned international hospitality brands 9. Develop the brand “Grand Tour of Cyprus 10. Implement a communication strategy for the “Grand Tour of Cyprus”
Top experience 2: Ancient Kourion, take a trip to the past 1.
Customer value proposition a. Gain creators: entertainment, edutainment, escapism, and aesthetic experiences. b. Pain relievers: An organised, safe, and clean environment. c. Products and services: A strongly archaeological site, state of the art interpretation system and guided tours, Kourion Opera every evening (PPS), live shows in the amphitheatre (designed by local university), Kourion shopping (authentic crafts). Kourion Dining Experience, perfect logistic services.
2.
Specific target Full spectrum of tourists and specifically:
3.
•
Young couples
•
Families with teenagers
•
Empty nesters.
Unique attributes Kourion Experience will deliver 3 unique attributes:
4.
•
A “Virtual Reality” interpretation program
•
A world class entertainment experience (Kourion mini-opera)
•
A Live Market
Logistics •
Location: Kourion site
•
Accommodation: not needed
•
Transport: yes; public transport and very convenient parking system
•
Top quality toilets system.
•
Internet purchase of tickets.
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Price range/duration/recommended period THR recommends 30-40 € per standard day visit and 70-90 € per mini-opera evening show
6.
Owner and manager Owner: Estate of Cyprus (Ministry of Heritage). To be developed by the Experiences Agency and to be managed by a specialised company.
7.
8.
Stakeholders involved •
National Tourism Authority
•
A well selected local university
•
The National Alliance for Tourism
•
Main tour-operators.
Action Plan (Do Well’s) 1. Hire an expert company to develop the concept and the business plan 2. Secure the funds 3. Activate the Cyprus Experiences Agency to build the experience 4. Award the contract to a reputed operator 5. Activate Visit Cyprus to market the experience one year before the grand opening.
Top experience 3: Immersion into the roots of Cyprus’ wine and local cuisine 1.
Customer value proposition a. Gain creators: edutainment and escapist experiences (a minimum of 15 partners), very rigorous system of partners ‘selection. b. Pain relievers: Low risk experience because of a good selection of caves and restaurants c. Products and services: On demand appointments, wine and food tasting, very efficient shopping, and transport system.
2.
3.
Specific target •
Discerning travellers
•
Foodies and wine lovers.
Unique attributes This experience will deliver 3 unique attributes
4.
•
Personalised visits staged by the owner
•
Very well designed “mezze” only for the experience partners
•
“Made in Cyprus” shop in every cave and restaurant.
Logistics •
Location: in the rural area
•
Accommodation: not needed. However, some partners can develop some B&B business.
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5.
169
Transport: own car plus convenient parking system in each place.
Price range/duration/recommended period THR recommends 10-20 € per tasting including some small food/snacks. Price of “Made in Cyprus” products to be decided by the managers of the program.
6.
Owner and manager Owner: Cyprus Experiences Agency. To be developed by the Experiences Agency and to be managed by a small unit financed by the partners with a support from CEA.
7.
8.
Stakeholders involved •
National Tourism Authority
•
The Association of Local Operators and Hoteliers
•
Ministry of Commerce
•
Etc.
Action Plan (Do well’s) 1. The CEA to develop the concept, the business case, and the coordination system 2. Develop the rules of the game of the association of partners and the mechanisms for internal governance 3. Secure the funds for operating 3 years minimum 4. Develop the electronic app to deliver information and to facilitate reservations 5. Make sure the logistic for “exporting” products to the home of buyer is very efficient and at a reasonable cost.
Top experience 4: Encounter ancient Cypriot culture in charming villages 1.
Customer value proposition a. Gain creators: edutainment, escapists, and aesthetic experiences. b. Pain relievers: Very well selected villages (no risk), very convenient parking places in every village, excellent signalling. c. Products and services: The main product is the villages, its atmosphere, and its habitants. Also, shops, workshops and local gastronomy offers.
2.
Specific target Full spectrum of tourists and especially:
3.
•
Young couples
•
Empty nesters.
Unique attributes Charming Villages Experience will deliver 5 unique attributes •
-5-7 very well selected villages according to 3 main criteria: authenticity, open in PPS (at least at 50%) and good logistics: signalling, parking, public toilets, etc.
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5.
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•
High level of aesthetics and non-trivialisation: flowers, wood, local materials, typical shops, and workshops, etc.
•
50% of restaurants having the new quality label.
•
Also, a labelled B&B offering
•
At least one “Made in Cyprus” shop.
Logistics •
Location: in the rural / mountains area.
•
Accommodation: labelled B&B.
•
Transport: private car. Very convenient parking system.
•
Top quality toilets system.
•
System of appointments for the workshops.
Price range/duration/recommended period THR recommends that the villages become pedestrian and a paid parking is offered at the entry of the village.
6.
Owner and manager Owner: The Municipality and the CEA
7.
8.
Stakeholders involved •
National Tourism Authority
•
Minister of Commerce.
Action Plan (Do well’s) 1. Hire an expert company to develop the concept, the business plan and recruit 5-7 Charming Villages (Troodos, Omodos, etc.) 2. Activate the Cyprus Experiences Agency to promote the development of the experience and eventually invest in some services and logistics. Secure the funds 3. Develop a specific plan for improving the authenticity and aesthetics of each village joining the experience. 4. Create, at local level, the “Charming Villages” task force inside the Municipality framework. 5. Activate Visit Cyprus to market the experience one year before the grand opening.
Top experience 5: Innovative pools and themed beaches 1.
Customer value proposition a. Gain creators: an exceptional “landscaped swimming pool experience” on the beach and all year around. b. Pain relievers: A safe, clean, well-organised environment plus an excellent menu of services. c. Products and services:
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3.
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•
Mega swimming pools with an excellent landscaping
•
5 themed sandy beaches around the swimming pools (Caribbean beach, luxury beach, family beach, etc.)
•
a collection of bars, restaurants, shops, entertainment facilities, wellness services.
•
special domes for winter
Specific target •
Sun and sea clients
•
PPS tourists looking for a memorable winter “beach experience”
Unique attributes Innovative swimming pools Experience will deliver 3 unique attributes
4.
5.
•
A “High Tech” mega-swimming pool close to the beach and in front of the hotels.
•
A reservation system for hammocks in the Themed Beaches (Digital app)
•
An extensive menu of shopping and F&B experiences
•
Possibility to enjoy it in winter.
Logistics •
Location: selected places in the coast line.
•
Accommodation: hotels in the coastline.
•
Transport: public transport.
Price range/duration/recommended period THR recommends 20-30 € per hammock/day and standard prices for the rest of services.
6.
Owner and manager Owner: Private sector. Here the role of the CYA is to develop the first “schematic design”, secure the technology, promote the idea among private sector and speed up special permissions.
7.
8.
Stakeholders involved •
Private sector
•
CEA
Action Plan (Do well’s) 1. Hire an expert company to develop the concept and the business plan 2. Activate the Cyprus Experiences Agency to nurture the idea 3. Proactively facilitate the permissions 4. Clearly specify the conditions for financially supporting the project
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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.
a3.
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 program. Businesses wishing to be included in this programme must comply with the standards to be endorsed. Figure 106. 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” program.
•
Visiting fish auctions.
•
Participating in workshops related to lace-work, silverware, pottery, intricate crochet, etc.
Reinforcer 2: The 8 Cyprus attributes The country: A modern, EU member state •
Member of the EU and Eurozone
•
Modern and cosmopolitan with top-level infrastructure (roads, telecom, etc.)
The destination’s 6 special features: an ideal tourist destination •
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
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Reinforcer 3: Specific competitive advantages per each business model Cyprus will operate 5 business models as stated below, developing a strong CVP for each. The specific CVP of each business model is indicated in the table below: Table 62. Cyprus business modelâ&#x20AC;&#x2122;s competitive advantage Business Model
Specific competitive advantage
1. Sun & Sea
Sea water quality and a country behind the beaches.
2. Itineraries & Culture
101 things to see and do less than an hour away from the hotel.
3. Meetings
Attractive for small and medium size meetings with state-of-the-art facilities and natural scenarios.
4. Cycling
Convenient size of the island and its weather.
5. Sport stages
Its great climatic conditions.
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The business scope The business scope defines the market segments Cyprus intends to compete in (business portfolio) and the geo-markets that Cyprus must focus on (geo-market portfolio). To select the market segments and geo-markets in which Cyprus can successfully compete, a prioritisation matrix has been developed that combines attractiveness and competitiveness factors. The methodology used to assess the categories referred to is based on both quantitative data and qualitative criteria, combining in-house knowledge with the analysis of international trends and growth prospects carried out by secondary sources.
5.3.1
Product/segment portfolio strategy With the aim of diversifying its product offer, attracting higher yielding customers and alleviating seasonality, Cyprus must develop products for segments other than Sun & Sea. The question is deciding which segments to compete in, which can be done by assessing which market segments are most attractive for Cyprus in terms of opportunities and how well-poised Cyprus is to compete in them. The variables considered to assess the attractiveness of each product / segment are: Table 63. Components of the product attractiveness assessment Criteria
Attractiveness assessment Description
a. Product attractiveness
Weight 100%
Market size
What is the size of the market segment in Europe?
30%
Historic growth
How did the segment develop within the last 10 years?
30%
Economic value creation
What is the economic value the segment creates?
40%
b. Porterâ&#x20AC;&#x2122;s 5 forces
100%
Threat of new entrants
Is it easy for a new destination to enter and successfully compete in this segmentâ&#x20AC;&#x2122;s market
20%
Threat of substitutes
Is it easy for buyers to substitute the needs and experiences that the segment provides them with?
20%
Bargaining power of buyers
How strong is buyer bargaining power?
20%
Bargaining power of suppliers How strong is supplier bargaining power? Rivalry among competitors
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How strong is the rivalry amongst current competitors in the market?
20% 20%
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The numbers resulted from the product / segment attractiveness assessment are: Table 64. Results of the product attractiveness assessment General product attractiveness
Total Attractiveness
Market size
Economic value creation
Historic growth
Average
Threat of new entrants
Threat of substitutes
Bargaining power of buyers
Bargaining power of suppliers
Rivalry among competitors
Average
Value
Ranking
Porter's 5 forces
Weighting
30%
40%
30%
100%
20%
20%
20%
20%
20%
100%
Sun & Sea
5
2,5
2,5
3,3
4
4,5
1
3
1
2,7
6,0
1
Itineraries & Culture
4
3
2
3,0
4
2,5
1
3
3
2,7
5,7
3
1,5
3
2,5
2,4
2,5
2
1
1,5
3
2,0
4,4
13
Sailing & Yachting
1
3
2
2,1
4
3
1
1,5
2,5
2,4
4,5
12
Adventure
1
3
3,5
2,6
2,5
1,5
1
3
3
2,2
4,8
11
2,5
1,5
5
2,9
4
4,5
2,5
1,5
2
2,9
5,8
2
Wellness
1
3,5
3
2,6
2
3
3
2,5
2
2,5
5,1
5
Medical
0,2
4
2
2,3
1,5
4
4
2,5
2
2,8
5,1
7
Sport stages
0,5
5
3
3,1
2,5
2
1
2,5
1,5
1,9
5,0
9
Meetings
1,5
4,5
3
3,2
1,5
3,5
1
3
1,5
2,1
5,3
4
Weddings
0,5
2,5
2
1,8
2
2,5
3
3
2
2,5
4,3
14
1
2,5
3
2,2
3
3
2,5
2
2,5
2,6
4,8
10
2
3,5
3
2,9
2,5
2
2
3
1,5
2,2
5,1
5
1,5
4
2,5
2,8
3,5
2
1,5
3
1
2,2
5,0
8
0,5
3,5
1,5
2,0
2,5
1
0,5
1
3
1,6
3,6
15
Products/ Segments
Nature
Short Breaks
Cycling 4th Generation resorts High-end holiday homes Golf
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The variables considered to assess how competitive Cyprus is for each product / segment are: Table 65. Cyprusâ&#x20AC;&#x2122;s competitiveness criteria for products / segments Criteria
Strategic fit with Cyprus Description
c. Strategic benefits
Weight 100%
Alignment with Vision & Goals
How aligned is the segment with our Vision & Goals?
20%
Market positioning
Does this product position us better/diversify us in the market?
20%
Contribution to sustainability
How does the development of this product contribute to overall sustainable development?
30%
Impact on seasonality reduction
How is this product affecting the seasonality of arrivals?
30%
d. Ease of development
100%
Intellectual capital
Do we have the intellectual capital that can carry out development and successfully manage the segment?
20%
Existing infrastructure
What key infrastructure needed for this segment do we currently have?
30%
Investment requirements
What are the investment requirements needed to successfully develop the product?
30%
Ability to leverage core assets
Does this product leverage our core assets?
20%
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The numbers resulted from the product / segment competitiveness assessment are: Table 66. Cyprusâ&#x20AC;&#x2122;s competitiveness results for products / segments Total Competitiveness
Sun & Sea
3
3
2,5
1,5
2,4
4,5
3,5
3,5
5
4
3
4
Sailing & Yachting
3,5
3,5
Adventure
2,5
Short Breaks
30%
20%
100%
3,5
3,5
2
4,5
3,3
5,7
9
4,2
3
3
3
4
3,2
7,4
1
3
3,5
2,5
2,5
2,5
2,5
2,5
6,0
8
2,5
2
2,8
3,5
2,5
2,5
3,5
2,9
5,7
9
2
3,5
3
2,9
2
1,5
2
1,5
1,8
4,6
15
3
2
3,5
4
3,3
2
2
2
1,5
1,9
5,2
14
Wellness
4
3
3,5
3,5
3,5
4
2,5
2,5
3
2,9
6,4
7
Medical
3
1
4
4
3,2
3
2
2
1,5
2,1
5,3
13
Sport stages
3,5
3
4
3,5
3,6
3,5
3
2,5
3
3,0
6,5
6
Meetings
3,5
2,5
4
4
3,6
3,5
3
2,5
3
3,0
6,6
5
Weddings
3
3,5
4
4
3,7
3,5
3
3
3,5
3,2
6,9
2
Cycling
3
2,5
4
4
3,5
3,5
2,5
3,5
3
3,1
6,6
3
3
3,5
3,5
3
3,3
2
2,5
1,5
4
2,4
5,7
9
3
2,5
3
2
2,6
3,5
3
2,5
3
3,0
5,6
12
3
2,5
4
3,5
3,4
3,5
3,5
2,5
3,5
3,2
6,6
4
Itineraries & Culture Nature
4th
Generation resorts High-end holiday homes Golf
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Intellectual capital
30%
Benefit
Ranking
30%
Value
30%
Cost
20%
Ability to leverage core assets
Impact on seasonality reduction
20%
Investment requirements
Contribution to sustainability
Weighting
Existing infrastructure
Products/ Segments
Market positioning
Ease of development
Alignment with Vision & Goals
Strategic benefits
100% 20%
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Accordingly, the prioritisation matrix is as follows:
Attractiveness
Competitiveness
Table 67. Product attractiveness and competitiveness assessment results
Sun & Sea Itineraries & Culture Nature Sailing & Yachting Adventure Short Breaks
6,0 5,7 4,4 4,5 4,8 5,8
5,7 7,4 6,0 5,7 4,6 5,2
Wellness Medical Sport stages Meetings Weddings Cycling 4th Generation resorts High-end holiday homes Golf
5,1 5,1 5,0 5,3 4,3 4,8 5,1 5,0 3,6
6,4 5,3 6,5 6,6 6,9 6,6 5,7 5,6 6,6
Products/ Segments
Figure 107. Product / segment prioritisation matrix
As a result, three priorities are determined:
Priority A Cyprus should embark on the following market segments as its 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 resorts, Wellness, Sailing and Yachting, High-end homes, Nature, Golf, and Weddings.
Priority C Adventure and Medical Tourism should be managed in a selective way.
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180
Source market portfolio strategy The analysis of geo-markets aims to identify where Cyprus should focus its marketing efforts while identifying new opportunities for diversification. As marketing resources are obviously limited, it is crucial to target source markets in which Cyprus presents good value in relation to the attractiveness/competitiveness ratio. Just as with product/segment prioritisation, the approach used to assess the geo-markets combines both the attractiveness and the competitiveness matrixes into one. The variables considered to assess the attractiveness of each geo-market are as follows: Table 68. Geo-market attractiveness criteria Criteria/factor
Description
a. Market size Outbound departures to Europe b. Growth and performance Forecasted growth of arrivals to Europe Economic value creation Seasonality reduction
How many travellers travel to Europe? How will arrivals to Europe develop in the years to come? Are travellers from this market yielding customers? What is the economic value they create? What is the percentage of total travels in the mid/low-season?
Weight 100% 100% 100% 30% 40% 30%
The variables considered to assess how competitive Cyprus is for each geo-market are as follows: Table 69. Cyprus’s competitiveness criteria for geo-markets Criteria/factor
Description
c. Cyprus position in the market Current demand for Cyprus
100% How popular is Cyprus as a tourist destination in the market?
d. Cyprus competitiveness Forecasted growth of arrivals to How will arrivals to Cyprus develop in the years to Cyprus come? Are there enough flight connections? What is the Flight connections flight time? Motivational fit
Weight
Does Cyprus’ “selling proposition” fit with the needs of the market?
100% 100% 40% 35% 25%
After the assessment was performed under the attractiveness and competitiveness approach explained before, the geo-markets prioritisation matrix has been fine-tuned under a collaborative professional work of the Project Management Team and THR. The matrix resulted is as follows:
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Figure 108. Geo-markets prioritisation matrix
In the first phase, efforts should be concentrated into a finite selection of source markets, and in later phases (mid-long term) further source markets could be developed gradually. This phasing allows enough time for current minor markets to evolve and grow, gaining attractiveness for Cyprus and/or increasing competitiveness. Therefore, the proposed source markets here are the ones that currently present good opportunities for Cyprus given that, technically, they are highly attractive as source markets and Cyprus’ tourism offer is also highly competitive for them. These source markets are: • • • •
The UK Russia Germany The Nordic Countries
• • • •
France Switzerland Israel Ukraine
Additionally, there are other markets that, despite not being top performers in a technical sense, are strategically important, such as: • • • •
Belgium The Netherlands Poland Ireland
• • •
Lebanon Austria The UAE / Qatar
Finally, the recommendation is to momentarily set aside the remaining analysed markets. The status of these markets should be reviewed in the long run, but for the period covered by this strategy, it is recommended to concentrate efforts on those countries which we proposed above.
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5.4
Destination strategy
5.4.1
The alternatives
a.
182
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 70. Types of tourists in terms of average daily per capita expenditure
b.
Type of tourist Budget tourist World average tourist
Average daily expenditure Average – 35% Average
Affluent tourist
Average + 30/50%
Luxury tourist
Average + 100/150%
i.e. Backpackers Majority of big TOs 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 is less than 30%, in “Premium” and “High-end” destinations this proportion ranges from between 40% and 90% as illustrated in the table below: Table 71. Destination positioning strategies in terms of client mix Destination types Low-cost destination Standard destination Premium destination High-end destination
% of affluent and luxury tourists 10 30 40-60 50-80
Each positioning strategy corresponds with a specific mix of the four tourism markets. For instance, a World-average demand strategy is targeting a mix of demand in which Affluent and Luxury tourists (high-spenders) are only 30% of total incoming tourists. This can increase between 40% and 60% in the Premium, and between 50% and 80% in the high-end strategies.
c.
Criteria to evaluate the demand strategy Every country has an explicit demand strategy, each of which has a different economic, social, and environmental level of performance. While some strategies generate high national and social benefits, others are incapable of doing so and ultimately fail.
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A demand strategy is a specific way of generating value for stakeholders (tourists, operators, local communities, the tourism industry, etc.) in a sustainable way, minimising any costs or externalities associated with producing such value. Tourism strategies exist that create reduced value and, in the long run, have both socially and environmentally high costs. There are other strategies that produce high value at reasonable costs, but only benefit one of the parties involved. Therefore, the objective of identifying a new, sustainable, and competitive demand strategy for tourism is crucial for Cyprus. For a tourism strategy to be fiscally beneficial for all parties involved, specific principles must be respected. The following have been considered in the assessment of the proposed strategies: Table 72. Quantitative criteria selected to assess the tourism strategies A tourism strategy should not expect to compete in all markets; instead, it should only focus on those in which it can really gain and retain reasonable value. Mass tourism is not an attractive business for industries that Competitive price range have to intensely use their workforce and require a high degree of service. There are strategies that generate very few jobs. A hotel can Generate quantity and generate 17 times more jobs than an apartment for rent and quality jobs uses 20 times less land per bed than a villa. A good tourism strategy creates the right conditions for Attractive profitability of investment to be profit-attractive, and enables national major investments investments. The tax receipts increase can help to create funds to support the plan and secure public investments. The ideal tourism strategy is one that will optimise investment in infrastructure, reduce operational costs and offer more Efficient cost/benefit services and value to tourists. It is also one best for handling resources and minimising pollution. Ability to capture and retain value
Table 73. Qualitative criteria selected to assess the tourism strategies A tourism strategy that will raise experiential products is better aligned to new demand trends. Hence, this is crucial to Attractive experiences offer accomplishing higher volumes of expenditure, longer stay and an improved quality of services and products. If sustainability is not embedded in the tourism strategy as the Active management of basic pillar of the value chain, the strategy will hardly remain sustainability competitive in the mid-long run. Within a good strategy, local communities participate in the Integrate and benefit decisions associated with tourism development and gain from local communities them as well. Not all of the territories have the right conditions for tourism Enhance a smart tourism development. One of the most frequent causes of failure is the development policy adoption of a policy aiming to develop tourism everywhere, independent from local opportunities.
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d.
184
Building consistent demand strategies The three different strategies based on the demand, or price-quality positioning, that a country can adopt have been modelled for Cyprus (discarding the Budget strategy, which is below its current positioning) and analysed using the demand projections from the average of Scenarios 3 and 4 (S3-4), taking the World Average projections for 2030into account.
d1.
The process used to develop the strategies The adjustment of the main variables (including tourism volume) obtained for S3-4 consisted of a 5-step process: •
Step 1. Distribution of total tourist demand by markets. The total volume of tourist demand, encompassing international tourists, day visitors and domestic tourists, were distributed among the 5 different travel motivations: Pleasure, Business, Visiting Friends and Relatives (VFR), Day visitors and Domestic.
•
Step 2. Segmentation per tourist segment. The total tourist demand, split amongst the 5 travel motivations in step 1, was then distributed into the 4 major tourist segments by degree of sophistication: Low-Cost, World Average, Affluent and Luxury.
•
Step 3. Calculation of price elasticity coefficient per tourist segment. In order to assess possible demand reactions, a price increase was simulated according to different demand strategies, and the price elasticity of each segment was calculated.
•
Step 4. Calculation of demand per tourism segment. Based on S3-4 and the price elasticity coefficients, the tourist demand for each demand strategy was computed.
•
Step 5. Assessment of the effects on the tourism economy. For each tourist market, key variables were calculated: tourism accommodation overnights, rooms, if there is any preliminary investment required, jobs, tourism production, contribution to the GDP and increase of tax receipts.
The basis of the model is that tourist demand decreases as tourists are more or less sensitive to higher prices, according to the reduction factor of: Reduction Factor = (Price increase coefficient)
Price elasticity coefficient
Note: The tourism figures obtained through the Simulation Platform take into consideration the demand projections for Cyprus, obtained from the Scenario model, which assumed a World Average profile. However, as a result of increased demand due to the mix of market segments and the elasticities considered, the total number of World Average tourists differs by 1% once adjusted.
d2.
The assumptions In order to develop different tourism strategies, a series of assumptions related to the key variables of the tourists’ behaviour have been defined: The average daily per capita expenditure changes for each tourism market. The increase in average daily per-capita expenditure is mainly due to an increase in the quality and variety of products and services purchased; constant prices are considered excluding the inflation effect. In order to set the multiplier from one segment to another, an analysis of holiday packages for 2, 3, 4 and 5-stars has been made, comparing Mediterranean destinations.
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Table 74. Average daily per capita expenditure (Euro) Tourist segments Budget World average Affluent Luxury
Pleasure 78,75 105,00 157,50 420,00
Travel motivation Business VFR Day visitors 130,50 56,25 37,80 145,00 75,00 50,50 290,00 131,25 75,75 548,00 225,00 126,25
Domestic 35,20 44,00 66,00 132,00
The average length of stay varies for each segment and motive. As per previous experience and analysis done by THR in countries like Spain, tourists with a higher disposable income are keener to spend more money during their trips and tend to stay longer than other profiles. Table 75. Average length of stay hypothesis (days) Tourist segment
Pleasure 9,5 9,5 9,5 10,0
Budget World average Affluent Luxury
Travel motivation Business VFR Day visitors 4,0 12,0 1,00 4,5 15,0 1,00 4,5 18,0 1,00 5,0 21,0 1,00
Domestic 5,5 6,0 6,0 6,5
Price elasticity of demand adjusts similarly in each of the tourism markets; higher elasticity coefficients are found in the Low-Cost and Mass tourism markets where tourists are more likely to reduce their demand as prices increase. On the contrary, the tourists in the high-end market are less influenced by price fluctuations. Table 76. Price elasticity coefficient of the demand segments Tourist segment
Pleasure 1,30 1,00 0,70 0,50
Budget World average Affluent Luxury
Travel motivation Business VFR Day visitors 1,30 1,30 1,30 1,00 1,00 1,00 0,70 0,70 0,70 0,50 0,50 0,50
Domestic 1,20 1,00 0,80 0,60
Assumptions about the relative price levels associated with the different strategies and markets were also introduced: Table 77. Price increase coefficient of the demand segments Tourist segment Budget World average Affluent Luxury
Pleasure 0,75 1,00 1,50 4,00
Travel motivation Business VFR Day visitors 0,90 0,75 0,75 1,00 1,00 1,00 2,00 1,50 1,50 4,00 2,50 2,50
Domestic 0,80 1,00 1,50 3,00
Moreover, an index regarding the tendency to use hotels and other tourism-licensed accommodation (vs. other types of accommodation) for each of the tourism markets was also introduced in the strategies, given the different behaviour of the segments (lower use of hotels and licensed tourism accommodation by VFR and Domestic markets compared to others like Pleasure or Business). Based on CYSTAT figures, International and Domestic tourists Updated version 23.03.2017
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differ significantly on the type of accommodation they use, which has been taken into account. Table 78. Tourism accommodation propensity by market (%) Tourist segments
Travel motivation Pleasure
Business
VFR
Day visitors
Domestic
Budget
70%
95%
0%
0%
35%
World average
70%
95%
0%
0%
40%
Affluent
75%
100%
3%
0%
40%
Luxury
75%
100%
5%
0%
40%
Note 1: Higher expenditure segments tend to choose licensed tourism accommodation in higher categories but at the same time have the capacity to purchase a second residence. Note 2: The VFR motivation segment has been modelled considering the ongoing international trend of reduction of stays in friends and relative's houses in favour of tourist accommodation. In order to simulate the projected demand for international tourists, a market mix has been considered based on the previous considerations and the possible scenarios for Cyprus. Table 79. Distribution mix by markets and demand positioning for international demand (%) Markets Budget World average Affluent Luxury
Standard destination
Premium destination
High-end destination
20% 50% 25% 5%
10% 35% 45% 10%
5% 15% 65% 15%
However, the domestic demand is not likely to experience big changes as it depends more on the wealth distribution of the country rather than the market segments to target, so a more conservative profile has been considered. Table 80. Distribution mix by markets and demand positioning for domestic demand (%) Markets Budget World average Affluent Luxury
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Standard destination
Premium destination
High-end destination
30% 40% 25% 5%
25% 40% 30% 5%
20% 40% 35% 5%
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e.
187
The results of the simulation By applying the hypotheses and processes, the 3 strategies were developed and their key tourism variables results obtained: •
Standard value proposition strategy. This strategy is characterised by the predominant weight of the Mass market segment. Affluent and high-end segments have a minor share in this strategy. This strategy gets a higher number of tourists aligned with the demand projection obtained by the scenario model, although not that of revenues, when compared with the other strategies.
•
Premium value proposition strategy. This strategy presents a more balanced distribution of the different segments, but with a significant presence of tourists from the upper segments. The Premium Destination Strategy attracts fewer tourists than the World Average strategy, but more revenues, given the higher spending capacity of the mix.
•
High-end value proposition strategy. The relatively dominant share of high-end and affluent markets characterises this strategy, which significantly decreases the number of tourists despite revenues being higher, but requires a high-quality infrastructure to cover the projected demand which is currently unavailable.
The main variables resulting from each tourism strategy by 2030 are presented below: Table 81. Tourism demand results of the considered demand positioning (2030) Main variables International Visitors (Thousands)
2015
Standard Premium destination destination 2030 2030
High-end destination 2030
2.656(1)
5.578
4.631
4.368
Same day Visitors (Thousands)
120(2)
257
216
203
Domestic Visitors (Thousands)
1.297(3)
1.407
1.366
1.324
Tourist volume (Thousands)
4.070
7.241
6.214
5.699
Tourism Expenditure - (Mill. Euro)
2.352
6.335
7.133
7.737
Average expenditure / day (Euro)
-
102,53
133,91
157,78
Average expenditure / stay (Euro)
-
874,84
1.147,74
1.357,59
30.545
61.076
53.263
49.037
43.144(5)
88.596
77.094
65.994
-
40.486
28.950
22.850
Total Tourism Jobs
73.500
112.779
119.229
126.966
Production (Mill. Euro) [Direct+Indirect]
4.380
11.086
12.482
13.540
Income (Mill. Euro)
2.391
6.053
6.815
7.393
Income / GDP
14%
24,87%
28,00%
30,38%
Tax receipts from tourism
818
2.070
2.330
2.528
Overnight Stays (Thousands) (4) Required Hospitality Keys New Hospitality Keys to be developed (6)
(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) No distinction is made between accommodation types (hotels/apartments, licensed/unlicensed) (5) 5.000 hotel non-licensed keys (source CTO) are not included but taken into account for 2030 (6) Unlicensed keys are not taken into consideration (5.000 keys) Note: Numbers have been rounded up, so slight differences may be found
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The proposed Premium Destination Strategy The CTS recommends focusing on a Premium Destination Strategy which is one level above the current Standard destination positioning. The simulation models which were specifically designed to develop the CTS show that an excessive focus on Budget / World average tourism significantly increases the number of tourists, but generates the lowest wealth for the country (based on the number of jobs or corporate profits), while at the same time producing the highest negative impacts on society and the environment as the additional number of keys will not be profitable. Focus on a High-end destination strategy would require a more intense transformation but a much lower number of tourists; it represents a big commitment in terms of investment and mobilisation of people involved to be achieved in only 15 years. The Premium Destination Strategy is a well-balanced approach, as it will attract less tourists than the maximum outlined in the World Average strategy. However, the better yield is sufficient to cover and overcome the potential loss. All things considered, and as per the results obtained from the simulation platform that has been developed, the Premium Destination Strategy offers the most appropriate combination of net positive elements in the long run. Therefore, it is highly recommended that Cyprus implements the Premium Destination Strategy.
Figure 109. Evolution of the Positioning Strategy
Table 82. Demand projection 2020-2030 (Premium Destination Strategy) 2020
2025
2030
3.132.201
3.895.736
4.848.804
Pleasure
2.560.536
3.227.784
4.062.143
Business
163.511
206.120
259.401
VFR
268.082
287.549
310.274
Day visitors
140.072
174.282
216.987
Domestic tourists
1.092.565
1.274.495
1.365.611
Total tourists
4.224.766
5.170.231
6.214.415
International tourists
Based on the average length of stay, the total number of overnight stays can be projected, regardless of the type of accommodation used.
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Table 83. Tourism overnight stays estimates 2020-2030 (Premium Destination Strategy) Indicators
2020
2025
2030
International Tourism Overnight stays (Millions)
26.749
32.924
45.304
Domestic Tourism Overnight stays (Millions)
6.187
7.217
7.959
32.936
40.142
53.263
Total Tourism Overnight Stays (Millions)
Note: Numbers have been rounded up, so slight differences may be found
To evaluate how many keys, need to be developed, for each profile a different double occupancy rate has been considered (i.e. 1,85 as the international standard ratio for pleasure travellers and 1,10 for the business travellers). However, the double occupancy rate considered for Serviced Units is 2,2 for apartments and 3,1 for Villas. Table 84. Tourism accommodation room-nights projections per market in 2020-2030 (Premium Destination Strategy) Tourist segments
2020
2025
2030
8.689.737
10.990.322
16.388.633
Pleasure
8.150.856
10.274.880
15.287.087
Business
530.433
706.380
1.032.762
8.448
9.062
68.784
0
0
0
Domestic
1.219.632
1.422.721
1.653.014
Total room-nights
9.909.369
12.413.043
18.041.647
49.122
56.725
77.094
International tourists
VFR Day visitors
Required daily Tourism Accommodation Keys (1)
Note: Numbers have been rounded up, so slight differences may be found (1) Unlicensed keys (5.000) are considered
Combining the number of tourists, their average expenditure, and their length of stay, it is possible to estimate the economic impact of the Premium Destination Strategy. Table 85. Economic impact projections in 2020-2030 (Premium Destination Strategy) Variables
2020
2025
2030
Production (Mill. Euro) [Direct + Indirect]
5.816
8.116
12.482
Income (Mill. Euro)
3.175
4.432
6.815
Income / GDP (%)
15,9%
20,4%
28,0%
Total Jobs Created
27.897
33.438
45.729
Note: Numbers have been rounded up, so slight differences may be found
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Chapter 6 Outcomes, Strategy Directions, and Objectives 6.1
The 7 Outcomes Outcome 1. Deliver an exceptional tourism experience Outcome 2. Excel in planning and development Outcome 3 Attract the right amount of vetted investors and MSMEs Outcome 4. Conquer more and better yielding customers Outcome 5. Benefiting the local society and the environment Outcome 6. Develop a highly competitive diamond for the tourism sector Outcome 7. Implement smart governance and tourism management framework
6.2
Strategy Directions and objectives (drivers)
6.3
Strategy Directions and objectives (enablers)
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The 7 Outcomes Following on from the Core Strategy presented in the previous chapter, the Strategy Directions make up the second part of the strategy. These are extremely important as they establish how the internal processes that Cyprus will use to produce value for stakeholders will be improved (planning, sales, services, etc.), so that the objectives and the strategy’s final result are achieved. Strategy Directions are developed for each of the Strategic Questions associated with the 24 Key Issues. The Strategy Directions are then grouped into 7 outcomes that represent the key guidelines to follow. Figure 110. Source market Outline of the Strategy Direction groups by outcome
5 “driver” outcomes 2 “enabler” outcomes
Figure 111. Sequence used to develop the Strategy Directions
As seen in the figure above, the process that devises the Strategy Directions and Strategic Objectives is sequential. The four steps are as follows: 1. 25 Key Issues: chosen to be managed by the strategy. 2. Strategic Question: The question that answers, resolves or manages the key Issue. 3. Strategy Directions: The directions that, if followed, respond to the question. They are strategic decisions. •
Strategic Objective: The objective to reach by following the guidelines set by the Strategy Directions. They lead on to do-wells, measures, targets, and initiatives in the Planning phase.
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Outcome 1. Deliver an exceptional tourism experience This outcome is two-fold; on the one hand, it covers experiential development, and on the other the quality of services offered to tourists. It aims to promote the development of 5-10 internationally attractive unique “Top Experiences”, capable of attracting demand and acting as a great motivational reinforcement in any case. Additionally, a system of “Brand Experiences” will be implemented in Cyprus, associated with symbols, icons, and myths of Cypriot culture. Development of Cyprus’ “Signature Experiences” will be promoted, created and managed by the private sector in cooperation with the government. Meanwhile, measures will be taken to encourage and reward quality improvement of all types of services offered to tourists: hotels, restaurants, taxis, shops, archaeological sites, inbound operators, etc.
Outcome 2. Excel in planning and development Cyprus suffers from excessive linear coastal development and very limited tourism planning and development in rural and mountain areas. Moreover, all development falls under an umbrella of outdated and dysfunctional legislation and regulations. Looking ahead to 2030, growth in Cyprus will be both quantitative and qualitative. It will be done wisely and will target the growth in demand, be largely made up of fourth generation resorts, and complemented by refurbishments and upgrades of the existing offer, as well as some isolated offers in exceptional places to respond to the Premium Demand Strategy. The mountainous area of Cyprus will be valued as a “Mountain Playground” to host the following types of tourism: Green Sun Vacations (GSV), rural tourism, nature and adventure experiences, hiking and walking tours, cultural experiences, short breaks, itineraries, and excursions. The rehabilitation of 3-5 charming villages and their expansion into resorts will be critical.
Outcome 3. Attract the right amount of vetted investors and MSMEs Putting the strategy into action will require private investment of around €20 million of both national and international origin, in proper proportions. Attracting this significant amount of money will be no easy task and failure in this area would mean the failure of the entire strategy. The strategic direction is made up of three components: •
The Government should activate a small but highly capable organisation in order to identify investors, generate interest and negotiate the best possible investment conditions with them efficiently and quickly.
•
At the same time, potential investors should be offered a complete menu of investment opportunities of all kinds: resorts, attractions, new accommodation, tourist services, etc., accompanied by all required documentation – that of pre-licensing and key due diligences.
•
Finally, efforts will be made to effectively attract and support 500 local entrepreneurs in order for them to develop products and services for tourists or tourism businesses: graphic designers, digital marketing experts, animation experts, nutrition experts, sports monitors, new restaurants, and shops, DMCs, etc.
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Outcome 4. Conquer more and better yielding customers Marketing will be the key to achieving the growth targets until 2030. Cyprus must create a highly-trained organisation to deploy highly innovative and effective marketing, competing with large destinations who invest much talent and money in it. The main objective will be to create more secondary demand in target markets, based on increasing the â&#x20AC;&#x153;understandingâ&#x20AC;? of Cyprus as a tourist destination. Marketing efforts will be reflected in tri-annual Marketing Plans that will emphasise two things: Media Relations instead of publicity and online, rather than offline, marketing. This should comprise a progressive abandonment of traditional marketing tools that no longer deliver a good performance.
Outcome 5. Benefiting the local society and the environment Local citizens will be the main beneficiaries from tourism development, seeing their quality of life and prosperity improve. To do so, the Government will promote and facilitate tourism opportunities for them to engage in meaningful jobs and entrepreneurial activity in the industry. The host communities will benefit through improved education and training, increased business prospects, diversified income-earning opportunities with increased meaningful and stable employment opportunities. They will participate actively in local tourism planning, development, and management, leading to a stronger sense of belonging. Ultimately, Cyprus should make large efforts towards social and environmental responsibility, to ensure that the growth of tourism is compatible with the preservation of the quality of life for its inhabitants and future ability to continue creating value.
Outcome 6. Develop a highly competitive diamond for the tourism sector So that the Cyprus Tourism industry can flourish profitably and orderly, it is imperative that it is able to benefit from a good Competitive Diamond, which creates great conditions for industry development and consists of; good conditions for businesses, decent infrastructure, positive conditions for demand, and satisfactory conditions of the support and administration sectors. Cyprus should ensure it has excellent conditions in the following areas: the legal and regulatory framework, company management, human capital, innovation and technology, extensive use of best practices, and the role of the Government. The Strategic Directions to implement, as part of the Strategy, are as follows: â&#x20AC;˘
The coordination of the many activities and improvements needed to create and maintain a good Competitive Diamond will require a Specialised Unit for this complex subject, which must have a large capacity for horizontal work.
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â&#x20AC;˘
The legal and regulatory framework must be extensively re-engineered to allow for more speed and flexibility in investment and operations, whilst at the same time ensuring the quality of services, consumer protection and free competition.
â&#x20AC;˘
Cyprus must make significant progress in the field of innovation and the use of new technologies, as well as the use of best practices, both in the public and private sectors.
â&#x20AC;˘
Finally, Cyprus will develop new and more effective ways to manage the required education and training of around 45.000 new direct and induced jobs (of a total of 120.000 jobs if we also add the indirect jobs resulting from the multiplier effect).
Outcome 7. Implement management framework
smart
governance
and
tourism
Cyprus will develop a new system of governance to manage major sectoral issues with economic, social, and political importance, in cooperation with key industry stakeholders. A group of industry associations able to increase their negotiating strength will be promoted. Cyprus must also make significant progress in the strategic and operational management of the industry. However, what cannot be measured cannot be managed, and in this sense, Cyprus should develop a system of key performance indicators of its tourism industry which will aid proper management.
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Strategy Directions and Objectives (drivers) Issue Strategic Question
Objective
Strategy Directions
Addressed in
1. Critical issues Goals and objectives What volume of demand and contribution to Cyprus’ GDP should we achieve by 2030? Competitive advantage What must Cyprus do better than or differently from its competitors? Destination’s positioning Which must be the most appropriate positioning strategy for Cyprus?
Product and market development How can we diversify the tourism products and the source markets?
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Growth should focus on creating value for the 4 different types of stakeholders: locals, investors, collaborators, and tourists. The focus should also be on optimising environmental and social benefits. Finally, tourism should become one of the main drivers of Cyprus’ economy. Cyprus will creatively exploit its exceptional climate, that allows it to position itself as the Canary Islands of the Mediterranean. This will be complemented by a sophisticated system of authentic and memorable experiences that make up for the insufficient unique attractions offer.
Cyprus will become an “all-year-round” destination, with “Premium” positioning. Over 40% of tourists in Cyprus will be of the “affluent” and “luxury” type by 2030.
Cyprus will diversify its products to align itself with the Premium Destination Strategy, with the aim of reducing both seasonality and the risk level of the current portfolio. The weight of the UK and Russian markets will decline to about 45%, however this will not be the case in terms of the number of arrivals, in order to risk associated with excessive overdependence on these markets.
Optimise tourism’s contribution to the Cypriot quality of life. •
Core Strategy
Implement a wellcrafted competitive advantage system •
Core Strategy
Become a Premium Destination •
Core Strategy
Focus on strategically selected products and source markets • •
•
Core Strategy Products / segments development Separate Action Plan Priority Source Markets Separate Action Plan
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Issue
Objective
Strategy Directions
Strategic Question
196
Addressed in
2. Customer journey’s value Tourism experiences How can we develop a unique system of tourism experiences in Cyprus?
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 system of high value experiences in Cyprus •
Initiative 1 B.
Satisfaction on services What can we do to improve service satisfaction?
Visual pollution How can we dramatically reduce visual pollution in Cyprus?
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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. 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.
Significantly improve the value along the customer journey • •
Initiative 2 Cyprus Quality Labels Separate Action Plan C. Dramatically reduce visual pollution in the destination
•
Initiative 3
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Issue
Objective
Strategy Directions
Strategic Question
197
Addressed in
3. Planning and development D.
Master planning How can we substantially improve the planning process?
Growth model Which growth model should Cyprus follow for the next 15 years?
Product innovation Which new innovative products and services should we develop?
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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.
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. 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.
Implement excellent tourism development master planning • •
Initiative 4 Integrated Tourism Development Separate Action Plan for Major Tourism Areas E. Define and manage clear growth models for all regions
•
Initiative 5 F. Increase product diversification and innovation
•
Initiative 6
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Issue
Strategy Directions
Strategic Question
198
Objective Addressed in
4. Investors and collaborators
Investors 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?
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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. 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. 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.
G. Attract necessary vetted investors •
Initiative 7
H. Ensure competitive MSMEs grow in Cyprus •
Initiative 8 I.
Increase the quantity and quality of market partners •
Initiative 9
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Issue
Objective
Strategy Directions
Strategic Question
199
Addressed in
5. Marketing and seasonality
Brand How can we develop a powerful tourism brand for Cyprus?
Conquering tourists How (and from where) can Cyprus conquer more and higher yielding tourists? Seasonality How can we transform Cyprus into an ‘all year-round destination?
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Both public and private sector marketing will be based on the strong brand we’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. 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. 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.
J. Develop a powerful tourism brand • •
Initiative 10 Building a powerful brand for Cyprus Separate Action Plan K. Conquer more higher yielding tourists
•
Initiative 11 L.
Reduce seasonality • •
Initiative 12 Seasonality reduction Separate Action Plan
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Issue Strategic Question
Strategy Directions
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Objective Addressed in
6. 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 we protect vulnerable systematic elements?
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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 •
Initiative 13
N. Reduce carbon footprint of tourism activity in Cyprus •
Initiative 14
O. Enhance vulnerable economic activities and protect cultural identity •
Initiative 15
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201
Strategy Directions and Objectives (enablers) Issue
Strategy Directions
Strategic Question
Objective Addressed in
7. Competitive Diamond Profitability How can we help to improve the efficiency and profitability of the sector?
Legal and regulatory framework How can we substantially improve Cyprus’ legal and regulatory framework?
Human Capital How can Cyprus develop the right human capital?
Air capacity How can Cyprus achieve its required air capacity?
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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. We will continue to revise and reform tourism relevant legislation and regulations, supporting the ever-improving 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 speed-to-market. 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. 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.
P. Promote productivity improvement tools •
Initiative 16
Q. Reengineer legal and regulatory framework •
Initiative 17
R. Educate and train the right people •
Initiative 18
S. Develop air capacity •
Initiative 19
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Issue Strategic Question
Strategy Directions
202
Objective Addressed in
8. Governance and management
Governance How can we create a highly efficient governance framework?
Management How can we improve management of the system?
Performance monitoring How can we monitor the sector’s performance?
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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 an effective collaboration between the different ministries that are involved. CTO will be transformed into a dynamic sector development facilitator. It will manage the Strategy’s Balanced Scorecard (BSC) system, key policies, and processes in a highly efficient way, stimulate public-private collaboration and support a transparent strategy communication, step by step regaining trust and credibility in the private sector. 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 intelligencebased decision-making culture in both the public and private sectors.
T. Establish a sound system of modern governance •
Initiative 20
U. Implement an efficient management framework •
Initiative 21
V. Launch a state-ofthe-art monitoring system •
Initiative 22
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Part C The Strategic Plan 7.
The Plan
8.
Driving Initiatives
9.
Enabling Initiatives
10. Separate Action Plans 11. Economic impact of the Plan
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Chapter 7 The Plan 7.1
The Strategy Map
7.2
Synthesis of Initiatives
7.3
Synthesis of the Special Plans
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Introduction Once the Core Strategy and its objective, competitive advantage and business scope have been outlined, and the Strategy Directions have been developed alongside their Strategic Objectives, the process of formulating the strategy will have concluded. The next crucial step is to convert the Strategy into a Plan, which encompasses the following:
Components of the Strategic Plan •
The Strategic Objectives (derived from the Strategy).
•
The measures, targets and KPIs: the measures indicate how the objectives will be graded and to what extent, while the targets and KPIs determine the numerical target that must be reached.
•
The initiatives: actions or groups of actions/programs that establish what will be done to achieve the objective.
The initiatives not only show what will be done, but also who is in charge (the owner), the available budget and timeframe, stakeholders involved in their application, etc. As a whole, these components make up the Balanced Scorecard and are what connect the strategy to its implementation. In the next section, we will present the Strategy Map, which maps the essential elements of the Strategic Plan. For an extended version of the 22 Initiatives, please refer to the Chapter 8 and 9.
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The Strategy Map
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207
Synthesis of Initiatives 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
“Dark 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 program. Focus on developing and implementing minimum 3 Top experiences. Launch the Signature Experiences program. 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.
209
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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, which 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 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 higher yielding tourists
Initiatives
Share of tourism arrivals generated in period 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 Set up 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 especially 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 between service providers and consumers.
Implement the “Cyprus Leadership Executive Education” programme. Deliver high-quality education alongside specialised activities in strategic sub-sectors.
Cyprus’ current legal and regulatory framework is very uncompetitive: excessive regulations, little transparency, a large diversity of stakeholders, slow processes, etc.
Simplification of the current regulatory framework. Speed-up the work already done by the specialised entity. 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. A 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.
Launch an executive education programme at the NTA. Provide NTA officials with a programme to effectively guide the entire Strategy implementation. 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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Synthesis of 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 86. The Six Separate Action Plans Plan 1. Product/Segments Objective: Establish a process successfully develop select group products/segments.
to a of
Plan 4. 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. Priority Source Markets Objective: Recommend strategies and types of marketing actions that must be implemented in order to generate tourist traffic towards Cyprus from each selected source market. Plan 5. Seasonality Reduction Objective: Attract more tourist arrivals during the Pre and Post season, as well as the winter season.
Plan 3. Improvement of the Quality 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. Plan 6. Integrated Spatial Tourism Development for major Tourism Areas Objective: Define the guidelines for a tourism development master planning effort for the 2017-2030 period that can be easily implemented.
For an extended version of the Separate Action Plans, please refer to Chapter 10.
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Separate Action Plan 1. Product/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 on 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 87. Objectives per product/segment
Sun & Sea Itineraries & Culture Meeting & Events Cycling Sports Stages
Arrivals Revenues (€ million) Arrivals Revenues (€ million) Arrivals Revenues (€ thousand) Arrivals Revenues (€ million) Arrivals Revenues (€ thousand)
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. • 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.
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Actions needed for a successful product development In order for these six 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 88. 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 2. 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 89. 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 90. Marketing “toolbox” components for Cyprus source markets
1.
Media relations programme building media network).
(incl.
11.
Winter season special 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.) Targeted online advertising campaigns.
14.
Co-op marketing campaigns with travel trade and airlines. Trade shows and tourism fairs.
6.
Social media management (in language).
own source
profiles market
16.
Channel marketing (special packages, exclusive promotions).
7.
Website/Apps language).
source
market
17.
8.
Mobile marketing.
18.
‘Buy & Sell’ Cyprus events and workshops (between the trade with the industry). Customer relationship marketing.
9.
Email marketing.
19.
Country presentations/events.
10.
Pre and Post campaigns.
20.
Industry support seminars).
5.
(in
Season
special
15.
(webinars
and
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 3. Improvement of the Quality Issue to tackle and objective to achieve Issue The quality of most of Cyprus’ tourism services is 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 Cyprus and the markets.
•
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 Cyprus and the markets. 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 4. 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 organise those elements under six aspects and two dimensions: picture of the sender (physique, personality, relationship, and culture/ values); and picture of the receiver (reflection and self-image).
Figure 112. Cyprus’ Brand Identity Prism
The 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: “To the lovers of unforgettable holidays and journeys, Cyprus offers a unique set of premium experiences and services for Relax, Discovery and Enjoyment.
Source: Proposal for Cyprus based on the Identity Prism Model
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 radiance of tour unique light, the 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.
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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. 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 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 visual. 7. Ensure proper use of the brand on the official and private marketing supports both online and offline. 8. Organise specific programmes 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 NTA. 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. Updated version 23.03.2017
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Separate Action Plan 5. 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 month 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 a 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 welldesigned 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 commercialising 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, NTA offices abroad, regional tourism offices, 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, the following accompanying measures are required: • •
•
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 decisionmaking 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 113. Cyprusâ&#x20AC;&#x2122; development areas and clusters
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Chapter 8 Driving Initiatives
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8.1 Driving Initiatives Outcome 1. Deliver an exceptional tourism experience Strategic objective
Measure
Target
A. Develop a system of high value experiences in Cyprus
Number of experiences developed/ year
•
B. Significantly improve the value along the customer journey
% of tourism services and companies labelled/ year
• • •
•
2018: 2 brand experiences 2019: 3 top and 10 signature experiences
2018: 15% 2019: 20% 2020: 30%
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 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
Initiatives
“Dark 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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Set up the “Experience Cyprus Programme” Initiative Owner: Cyprus Experience Agency
A.
237
Priority Start-final deadline 1Y1Q-4Y4Q
Issue(s) to be resolved Tourists expect more and more to be able to book and live meaningful, unique, and authentic experiences during their travels. They seek experiences they will never forget and can be shared with others, and they are willing to pay for them. Even though Cyprus offers a variety of natural and cultural sights and activities, the experiential level offered is currently very low. As a consequence, the resulting value generation for both tourists and local businesses is deficient and the differentiation of Cyprus within the marketplace weak.
B.
Initiative summary Establish and launch the “Cyprus Experience Agency” (CEA), a public entity appointed to design, develop, operate, and market the following system of outstanding tourism experiences: 1. Top experiences: a small range of iconic must-do experiences directly developed and controlled by the CEA. 2. Signature experiences: a portfolio of quality experiences created and run by private sector companies, with CEA being responsible for the selection process, and supporting companies for technical guidance and marketing programmes. 3. Brand experiences: a few small memorable “ritual” experiences that tourists are likely to witness all over the country. CEA is responsible for the selection and promotion within the industry. With regard to Top Experiences, CEA will focus on designing and investing in these experiences and, in principle, will leave the operation of these to specialised companies. In terms of brand and signature experiences, the CEA will promote their development, and it will support the tourism companies involved in developing and implementing and execute the marketing and quality control policy throughout the system. Accordingly, THR recommends that the CEA be managed by a specialised management team that will report to the head of the NTA or a Supervisory Board composed of 2-4 Ministers. However, THR also considers two other options acceptable: •
That the CEA be a Department within the NTA.
•
That the CEA deal only with the development (investment and management via third parties) of the Top experiences and that the rest be a department within the NTA.
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C.
238
Key benefits of a successful initiative implementation Tourists will understand what they can expect in Cyprus, they will be attracted by, and value the unique and authentic quality experiences they can live only in Cyprus. This will give the country a stronger and more differentiated market positioning and significantly raise overall customer satisfaction, recommendation, and repeat rates. Local companies will have better opportunities to set up profitable businesses and develop new services that generate good money and quality jobs for the local population.
D.
Action plan Work stream 1. Install the Cyprus Experience Agency The Cyprus Experience Agency will be a newly created entity responsible for developing a whole new system of tourism experiences, answering the growing tourist demand for authentic, unique, and memorable experiences.
Action 1.1 Set up the roles and organisation of the Cyprus Experience Agency (CEA) We recommend to give the CEA 3 key roles: 1. Development of tourist experiences: create and/or oversee the creation of new and memorable tourism experiences, divided into Top, Signature, and Brand experiences. 2. Stimulation of excellence and innovation: improve continuously the quality of the experiences offered by providing technical support and guidance of the private sector, and a system of quality labels in line with Initiative 2. 3. Marketing of experiences: generate, manage, and promote unique quality marketing content based on experiences; support experience related marketing efforts generated by the private sector in a structured way. For reasons of flexibility and speed-to-market, the unit should be managed as an independent organisation but very much associated with the Marketing Department. It is envisioned as a multi-disciplinary team with expertise in the following areas: Figure 114. Proposed organisational chart for the Cyprus Experience Agency
The Unit should count 10 to 18 team members, with approximately 3-5 experts in experience design and staging, 2-4 experts in experience marketing, 3-5 experts in experience management and 2-4 experts in experience operatorsâ&#x20AC;&#x2122; enrolment and support of the Signature experiences programme.
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Action 1.2 Staff the CEA organisation For the Unit to be successfully managed, it has to be staffed with Cypriot entrepreneurial minds, therefore a high share of people with private sector background is recommended. Initially, it should rely on the advice of externally-hired experts in experience design and management, ideally related to benchmark experiential destinations such as Catalonia (http://experience.catalunya.com), for example. Staff must meet capabilities in terms of experience design, staging, management, marketing, and industry support.
Action 1.3 Run an industry support programme facilitating an experiential business culture The Cyprus Experience Agency should also act as a stimulating force and facilitator of an experiential culture, resulting in innovative experience design, quality management, and marketing. This programme should grant access to information on tourism experiences, including research, data, case studies and business tools. All information and tools should be made available through an online industry support platform, webinars, workshops, industry events, and articles distributed through the media. Case studies and best practice are key elements and should be promoted broadly.
Action 1.4 Publicly launch the Agency Communicate clearly its creation, role, and objective as well as the benefits derived by the tourism and travel industry. Plan a kick-off event inviting industry members and both national and international media. Organise a series of targeted follow-up events to network and engage with key stakeholders and potential investors.
Work stream 2. Start the Top Experience programme Top Experiences are an exclusive selection of once-in-a-lifetime experiences that set Cyprus apart from other destinations, while engaging travellers with the culture, the people and the places visited, in an authentic and memorable manner. Top Experiences become a key component of the Cyprus positioning. Being built around top attractions and with full Government support, the creation, operation, and supervision of these experiences fall directly to the Cyprus Experience Agency. For the period covered by the Strategy, it is recommended to focus on developing and implementing minimum 3 Top experiences.
Action 2.1 Select 3 strategically important attractions to host Top Experiences Select 3 key natural and/or cultural attractions on which basis the first Top Experiences will be assembled. To select these attractions, the following criteria should be considered: •
Highly emblematic attractions and/or an environment that allows creating extremely memorable experiences from scratch.
•
High degree of authenticity and/or uniqueness.
•
Contribution to seasonality alleviation.
•
A good geographic spread among the different Top experiences.
•
Capacity of the government to get full control over the selected attraction (if needed) so as to take executive decisions.
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Action 2.2 Design the experiences The development of each experience is a crucial step that requires a team of skilled experts in product and experiences design and staging. To deliver memorability, experiences must have elements of seduction and fascination, appealing to a mix of edutainment (to learn), entertainment (to see), escapism (to do) and aesthetic (do be there) claims. In order to attract different target segments, we recommend each of the 3 experiences to have a different lead concept. The entire customer experience journey must be thoroughly planned and follow the lead concept throughout, from booking the trip to sharing the memories. All stages must be considered part of the experience, so for an edutainment driven concept, such as a 10.000-year time travel through Cyprusâ&#x20AC;&#x2122; history, the questions what to learn, how to learn, how to ensure the entertainment factor and which other components, e.g. aesthetic, to add in which manner need to be asked. Other practical questions are included further in this report.
Action 2.3 Ensure the necessary funding to create, operate and manage the experiences Once the venues have been selected and the experience designed, feasibility analyses have to be run to assess the adequacy and practicality of the Top experiences chosen. The usually high necessary funding could come from other related entities, EU funds and/or private investors.
Action 2.4 Launch the first experience project Build a dedicated project team with members from the CEA and external consultants, which leads the implementation of each Top Experience designed. The interministerial committee should be closely involved in order to settle challenges relating to other areas, such as infrastructure, financing, legislation, etc. A detailed implementation plan must be developed for each Top Experience, with clear milestones and responsibilities. A Top Experience committee should be set up and meet frequently. This committee should be made up of the project team and local stakeholders from both private and public sector in order to integrate local know-how and interests and gain strong local support of the project. Before launching the experience, various test runs should be made in order to ensure the high quality of the project and to integrate the new ideas of the selected test persons, which could even be real tourists. The launch should be accompanied by a strong media campaign, inviting journalists and bloggers from the key markets to live the experience themselves and write about it.
Work stream 3. Launch the Signature Experiences programme Signature Experiences are driven by private sector companies and should engage travellers with the local culture in ways that are authentic and memorable. The Cyprus Experience Agency will be responsible for the creation and coordination of the programme, as well as for managing the affiliation process. The number of Signature Experiences to be endorsed depends greatly on the volume and quality of the current experience operators and local DMCs, but in the long run also on the ideas developed by start-ups and MSMEs moving into that area. A number of 20 SEs launched by 2020 seems realistic.
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Action 3.1 Set up the eligibility criteria to enrol in the Signature Experiences programme Two types of criteria are necessary for both the applicant and the experience idea: quality and character criteria. The following are some examples for quality related selection criteria: •
Have been operating experiences or activities for a minimum of 2 years with a proven track record for safe and professional operation.
•
At least 4-star average ratings on Tripadvisor for offered services.
•
Be the owner and/or deliverer of the proposed experiences.
•
Have a website with booking capabilities in at least 2 languages.
Experience character criteria could be linked to a set thematic framework that could slowly evolve over time (or not). As an example, this could mean the chosen experiences should fit into categories like Cyprus culinary magic, Cyprus mountain life, Cyprus Blue Seas etc.
Action 3.2 Develop enrolment processes and application guide Documents explaining the programme should be made available online, and combined with tests checking the knowledge has really been acquired. Only then enrolment can move on. Get inspired by the process documentation provided by the international benchmark for such a programme, the Canadian SEP. Full documentation can be found here: http://en.destinationcanada.com/resources-industry/canadian_signature_experiences The application guide used as first entry into the programme should cover topics such as: •
What in detail is a Signature experience?
•
Which are the benefits of joining the programme?
•
How to apply, and how the application procedure and timings works?
•
What is expected of enrolled companies?
•
Etc.
Action 3.3 Create an industry support programme In order to make the most of the programme while continuously fostering experiential innovations, industry support tools should include: •
Tutorials and webinars on related subjects.
•
Practical and training tools, best practice, and case studies.
•
Brand & experience toolkits, to understand what Signature Experiences are about.
•
Market intelligence reports.
•
Information on professional events and exhibitions, Etc.
Action 3.4 Design back-office and support platform for experience providers It is essential to have a user-friendly website that allows experience providers to communicate easily with the Cyprus Experience Agency and to manage their experience offer. The platform hosts the back-office function, allowing all experience providers to show their content on the central official booking platform in a highly attractive standardised format. This platform should become a one-stop-shop for all technical concerns, questions, and answers, and also include active features such as uploading new multimedia content or adding experiences. Updated version 23.03.2017
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Action 3.5 Design an online experience booking platform for end users Being the visible face of the Signature programme, designing a handy website for tourists to get information and book experiences online is key. The website can be THE central destination website, as it is with Canada. Please refer to http://www.canada.travel for reference. This booking platform should include a vast amount of multimedia content, featuring videos and pictures of the proposed experiences. It should also allow end users to share reviews and content on social media.
Action 3.6 Ensure periodic SE portfolio revision To ensure that quality is maintained and the essence of the Signature experiences programme is not lost, it is important to ensure that no criteria is breached. To this end, periodical revisions should be performed to ensure the quality of the operations and the satisfaction of the visitors. Another measure would be the analysis of Tripadvisor and other social media reviews. Weak experiences should be given a chance to turn around before they are eliminated and replaced by others. The portfolio, of course, can grow, but growth must happen in a controlled way, making sure to avoid too close a duplication of experiences.
Work stream 4. Promote Brand Experiences A set of micro-experiences, conveying Cypriot values and traditions, will be designed, and made available all over the country. Tourists shall find these micro-experiences in a standardised, authentic, and unique way wherever they go in Cyprus.
Action 4.1 Define inherent and distinctive cultural elements featured in BEs Brand experiences are to be built around elements that are innate of Cyprus, elements that are associated with the country and that contribute to the creation of a brand. For example, these elements could be related to Cypriot coffee and sweets (hotels offering Cypriot coffee to welcome guests near the reception) or the Meze (present authentic and delightful Cypriot food in a traditional manner).
Action 4.2 Select 4-5 Brand Experiences in line with chosen elements Assess the adequacy of each of the identified elements within CEA and with the help of external Cypriot experts. For example, when thinking about a coffee experience, invite hoteliers, chefs, restaurant owners, coffee brand representatives, a historian, and coffee fanatics, generating ideas and testing their feasibility with the stakeholders involved. Select those ideas that are more likely to leave a strong impression on the maximum number of tourists, best reflect Cyprus, are simple, unique, and authentic, and enjoy great support by local stakeholders regarding their implementation.
Work stream 5. Initiate experience marketing and communication system Once Top, Signature and Brand experiences are set up, and right before these are officially launched, it is necessary to concentrate all efforts on marketing them and communicating their benefits to both industry and visitors. In addition to this one-time efforts, a marketing and communication system needs to be installed, continuously promoting the experiences to both end users and local entrepreneurs.
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Action 5.1 Create promotional materials Develop the content for the different type of experiences and use them widely throughout the web. Design appealing, above all digital, collaterals that clearly convey the uniqueness, authenticity and local flavour of the experiences. Interactive multimedia content such as audio, animation or videos must be in high resolution and of high quality. This material should trigger the wish to visit and experience Cyprus.
Action 5.2 Prepare a PR campaign communicating the benefits of the experience system A public relations campaign is essential to get the most promotion possible to the right targets, to increase the brand recognition and awareness of Cyprus, and to inform both international business partners and target audiences of the changes that the Cypriot tourism industry has recently completed. Invite media partners from the key markets to live the experiences themselves. Help them with texts and top quality visual material, both pictures and videos.
Action 5.3 Select third-party partners to also market Top/Signature Experiences To complement the CEA booking platform that has been previously designed, it is essential to enhance sales through agreements with experience sellers, tour operators and travel agencies in the targeted source markets, online travel agencies, and other partners that could support selling and marketing the Cypriot experiences. As an example, leading experience sellers include Viator, GetYourGuide or Excursiopedia among others, but also traditional tour operators like TUI, Thomas Cook, and others should be involved. A programme like the Canada Specialist programme helps foreign companies better sell Canada: http://csp-caen.canada.travel/ Certified SE programme members then can benefit from joint marketing actions led by CEA, generating significant cost and creating advantages for SE providers. They should be informed about marketing actions like market promotion tours and the likes.
E.
Main stakeholders and their roles Responsible
National Tourism Authority
x
Cyprus Experience Agency
x
Accountable
Consulted
Informed
Interministerial Commission
x
Marketing Department (Visit Cyprus)
x
x
Cyprus Tourism Planning Unit (CTPU)
x
x
Department MSMEs
x
x
x
x
x
x
x
of
Investment
Private sector stakeholders Local communities
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and
x
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F.
244
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action
Total (.000 €)
17
800
533
267
-
-
1.1 Set up the roles and organisation of the Cyprus Experience Agency
1.2 Staff the CEA organisation
1.3 Run an industry support programme facilitating an experiential business culture
1.4 Publicly launch the Agency
829
1.657
1.657
1.657
2.1 Select 3 strategically important attractions to host Top Experiences
2.2 Design the experiences
2.3 Ensure the necessary funding to create, operate and manage the experiences
2.4 Launch project
-
1.000
1.000
1.000
3.1 Set up the eligibility criteria to enrol in the Signature Experiences programme
3.2 Develop enrolment processes and application guide
3.3 Create programme
3.4 Design back-office and support platform for experience providers
3.5 Design an online experience booking platform for end users
3.6 Ensure revision
-
525
1.050
525
4.1 Define inherent and distinctive cultural elements featured in BEs
4.2 Select 4-5 Brand Experiences in line with chosen elements
-
-
1.900
1.900
5.1 Create promotional materials
5.2 Prepare a PR campaign communicating the benefits of the experience system
5.3 Select third-party partners to also market Top/Signature Experiences
Work stream 1. Install the Cyprus Experience Agency (CEA)
Work stream 2. Start the Top Experience programme
the
first
5.800
experience
Work stream 3. Launch the Signature Experiences programme
an
industry
periodic
SE
support
portfolio
Work stream 4. Promote Brand Experiences
2.100
Work stream 5. Initiate experience marketing and communication
Total L: Low
M: Medium
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3.000
H: High
3.800
Budget per year 18 19
Timetable Years
20
30.245 4.160 8.540 10.110 7.436 NR: No Risk
17
H
H
H
H
H M
H M
M M
18
19
Period 20
21-25
26-30
•• • • • • •••• • •• • • ••• • • • • •• • • •• • ••• • •• •• • •• ••
CYPRUS TOURISM STRATEGY
2
Introduce Cyprus Quality Label System
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
245
1Y1Q-4Y4Q
Issue(s) to be resolved In the absence of a framework providing broadly accepted quality standards and an attractive label system in Cyprus, there are significant variations in quality across tourism products and destinations throughout the island and a high risk of discrepancy between the visitorsâ&#x20AC;&#x2122; expectations and what they actually encounter. This situation has a negative impact on customer satisfaction, recommendation, and retention. On the other hand, efforts are needed to reposition the role of government as a partner to proactively support quality and innovation within the tourism sector.
B.
Initiative summary The Cyprus Quality Label (CQL) system will be managed by a specialised unit within the NTA. The Unit will define the structure of labels, the type of tourism services, attractions, and destinations eligible to join the quality system, as well as the processes and criteria for joining. Companies and destinations will receive technical assistance in order to successfully comply with the criteria and enjoy the maximum benefits of adhering to the system. Finally, the quality labels will be prominently marketed to both local stakeholders and source markets, and the quality will be constantly monitored.
C.
Key benefits of a successful initiative implementation Improved and consistent quality across all the tourism supply chain of Cyprus will lead to higher customer satisfaction and higher levels of recommendation and repetition. Customers will therefore become Cyprus best marketers. Moreover, since label certificates will be awarded based on stringent criteria and professional inspections, consumers will eventually be able to trust these symbols. The net result will be an improved, differentiated and consistent delivery of a world-class customer experience. Tourism businesses will do their best to comply with the label criteria in order to get access to new powerful marketing channels and increased consumer and business value creation. They will understand clearly the benefits of the label system and will take advantage of the technical and marketing support provided to those who join the quality system.
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D.
246
Action plan Work Stream 1. Set up the Cyprus Quality Labels Management Unit Action 1.1. Reach an agreement on the organisational structure of the CQL Unit A new unit within the NTA will design and manage the Cyprus Quality Labels system. It will infuse enthusiasm in the industry, providing support for quality improvement, promoting business adherence to quality standards, and marketing the quality labels to consumers, the travel trade, and other partners in the markets. It is suggested that the Organisational structure of the CQL Unit has a manager and 4 main areas. Figure 115. Proposed organisational structure of the CQL Management Unit
The CQL Unit will regularly invite professionals representing different tourism activities in Cyprus to share opinions, discuss the quality standards to be applied and provide inputs to improve the system.
Action 1.2. Staff the CQL Unit The Unit could be partially staffed with NTA officers. However, it will be necessary to hire some professionals with hands-on experience in managing tourism companies. All of them should support a radical change in the approach to quality management in Cyprus, moving away from quality “control” towards quality facilitation. It is advisable to start by appointing the Unit Manger and CQL Development Officer, as they will be responsible to define the basic concepts, rules, and procedures for the CQL. If necessary, they could get support from external specialists. Training will be provided to all staff, including benchmarks of quality systems, and the objectives, standards, and procedures of the CQL system.
Work stream 2. Develop the Cyprus Quality Labels system Action 2.1 Define the labels (concepts plus visuals) The development of the CQL system will start by defining meaningful concepts for quality labels using a customer oriented approach. The new quality labels could cover destinations, attractions, tourism services and facilities, although the introduction of labels may be phased. Brainstorm label concepts with representatives of the public and private sectors. Then, select few labels to be implemented first. Ideally, those responding to the strategic priorities, product portfolio, potential for differentiation and/or feasibility of implementation, among other. A “name” for each label will be defined as well as the visual symbols. Labels based on characteristic key assets of Cyprus will be more powerful, attractive, and consistent.
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The label visual symbols will form a system to be easily recognised and decodified by customers. The type, size, and materials of certificates, plates/signs and the like should also be defined at this stage.
Action 2.2. Define the quality standards and the rules of the game for the CQL The next step will be defining standards for each label. They should be based on international standards and should present some challenges to push improvements in the quality of destinations and businesses. Then the â&#x20AC;&#x153;rules of the gameâ&#x20AC;? for the label system will be defined including general rules (such as minimum requirements, rights and duties of members, penalties, membership fees). Private industry stakeholders must be invited to discuss and refine the quality standards.
Action 2.3. Define processes for the efficient management of the CQL system Clear and streamlined processes need to be set up in order to offer guidance to the staff of the CQL Management Unit and to facilitate the interaction with potential and actual members of the system. Some key processes are summarised in the figure below. Figure 116. Processes within the CQL system
Those processes should be fully described and completed with other administrative processes, and a handbook should be prepared to ensure consistent and smooth implementation.
Work stream 3. Deploy the CQL system Action 3.1 Develop the e-Platform to support the CQL System The CQL System will be supported by an online platform targeting the Cypriot tourism industry, travellers, and international tour operators and media. One of the best platforms to get inspiration from is New Zealand Qualmark (available at http://www.qualmark.co.nz/). Ideally, eligible candidates should be able to apply for a label online, as well as follow up on their candidacy, get feedback, download training and marketing materials. The platform
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should also allow the travel trade, potential tourists, and visitors to search for labelled quality businesses, services, and experiences. If for some reason, a fully functional platform is not viable in the short term, a more basic but appealing and clear website should be developed including information about standards, procedures, and contact details. In both cases (sophisticated platform or basic website), they should be backed by a database designed to manage applications, assessments, labelled companies, inspections, etc., that will be the main tool for the work of the CQL Unit team.
Action 3.2 Provide training to the team of advisors The training needs of the team of the Admission and Quality Control area will have to be identified and training provided so the team is in a position to perform the tasks assigned and feels empowered. In addition to a comprehensive introduction to quality systems, their main objectives, and approaches, it is advisable to offer the opportunity to learn from best practice. Thus, it is advisable to invite experts from destinations successfully managing a label system such as France, Austria, or New Zealand to learn from their experience, exchange views and discuss practical issues.
Action 3.3. Organise public launch event of the CQL system Once the system has been developed, and the platform has reached at least the Beta test phase, it will be time to organise the public launch of the CQL (before opening the application process and before the start of the initial assessments). A main event should be organised in the capital that could be followed by regional meetings to present the CQL, the â&#x20AC;&#x153;rules of the gameâ&#x20AC;?, and the application process to public and private stakeholders. A small folder should be printed for distribution.
Action 3.4. Conduct initial assessments of applicants After launching the CQL system and calling for applications, those received will be processed and the initial assessments (using the standards) should be organised by the CQL Unit. The Unit team of assessors/inspectors may need some time to develop specific skills and to establish their credibility. An approach that helps to raise the bar from day one, avoiding pressures to lower the standards, and allowing local assessors to gain experience and recognition from the industry, is to outsource the job to professionals with experience in quality assessments and grading that will provide an objective and professional input in the first round of assessments.
Work stream 4. Market and promote the CQL system in Cyprus and the markets Action 4.1. Prepare and implement a CQL Marketing Plan The CQL system must have its own marketing plan, targeting: local label candidates and stakeholders (tourism businesses and destinations), tourists (potential and visitors in Cyprus), and the international travel trade and media. The plan will define the key messages to be passed on, the type of contents to be developed, and the communication channels. The CQL marketing plan should be aligned with the main national tourism plan prepared by the NTA, taking full advantage of all the resources and platforms available. Some activities to be included in the plan are: i) press releases announcing new members, interviews with managers when they are awarded the label and at a later stage to talk about the benefits
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obtained, ii) news and articles about the CQL in the official tourism portals/blogs, iii) displaying information on the CQL in trade shows booths and workshops, iv) presentations during press trips and fam trips, and v) distribution of small printed pieces with general information about the scheme.
Action 4.2 Develop rich and engaging B2C online marketing content Online channels and social media will be key to achieve broad coverage of the CQL at a low cost and it will be necessary to provide excellent online multimedia content about the labelled destinations, attractions, and services targeting potential tourists (stories, short videos, and photos). An official free App to be available for download at the airport, hotels, tourism offices, etc., could be an effective tool to reach and engage visitors in Cyprus. Additionally, all members of the CQL should generate their own themed online content around the label and should receive support to do so.
Works stream 5. Implement a strong monitoring and enforcement system Action 5.1 Control compliance with the quality standards on a regular basis In addition to the initial assessment of compliance with the requirements and standards to join the system, a mechanism for monitoring that quality standards are maintained should also be in place. It will be mainly based on periodical and/or random inspections performed by highly trained inspectors, whose technical expertise and experience exceeds that of the operators they are inspecting. Based on the reports prepared following the inspections, the CQL Unit staff will approach the property managers or destination managers to discuss the next steps.
Action 5.2 Continuously monitor customer satisfaction Annual surveys to control customer satisfaction and calculation of the Customer Net Promoter Score Index (NPS) should be implemented33 The survey should be complemented with big data analysis reviewing Tripadvisor and other social media. Nowadays, there are very useful and affordable tools to evaluate big data for tourist destinations and businesses, e.g. German-based www.trustyou.com or US-based www.revinate.com. Additionally, a costeffective mechanism that could be easily implemented is to include in the official tourism portal and other official websites the option for customers and the travel trade to send feedback and complaints to the manager of the CQL System.
Action 5.3. Launch the Quality Excellence Awards The Quality Excellence Awards should be launched as a positive incentive to attract, keep and reward CQL members. The categories and requirements for the awards should be defined and publicised together with the procedure to select the winners. Winners will be made public in an official ceremony widely covered by local media. These awards will make stand out businesses and destinations that excel in quality standards, becoming points of reference for other players throughout Cyprus.
Net Promoter ScoreÂŽ, or NPSÂŽ, measures customer experience and predicts business growth. This proven metric transformed the business world and now provides the core measurement for customer experience management programs the world round. 33
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E.
Main stakeholders and their roles Responsible
National Tourism Authority
x
CQL Unit
x
Accountable
Cyprus Experience Agency Regional / Organisations
F.
250
Local
Consulted
Informed
x Tourist
x
x
x
Mayors of selected destinations
x
Private stakeholders
x
x
Tourist Associations
x
x
Travel Trade
x
Specialised Media
x
Operational Action Plan & Budget (for the 4 first years) It is recommended that in the first 4 years of implementation of the strategy the following should be done: •
Take all year 1 to design the system and set up the Unit, within the NTA, to be in charge of promoting and managing the system which should include the labels and some endorsements. The system will include labels (tourist restaurant A, B, or C) and endorsements (The best Mezze, Museums you must see, etc.).
•
Year 2, will focus on implementing 3 labels and 3 endorsements namely: - Labels: Taxi services, restaurants, and attractions. - The Endorsements: Best Mezze and Kebab, Best Fine Dining, Attractions not to miss.
•
Years 3 and 4 will be used to roll out the system including the following labels and endorsements: - Labels: Hotels, shops, beaches, excursions, local operators, buses, etc. - Endorsements: Family beaches, family destinations, best rural accommodation, nicest streets, and squares, etc.
Important Note: In designing the system in Year 1, the NTA must take into account the role that the private sector has to play in it. A further recommendation is that the NTA establishes a specialised working group in which stakeholders of the private sector participate to jointly decide the labels and endorsement to activate the terms to qualify.
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CYPRUS TOURISM STRATEGY
Work stream / Action
PrioRisk rity
Budget for four years Total (.000 €)
17
950
475
475
-
-
H
H
200
67
133
-
-
H
H
570
190
380
-
-
M M
3.250
-
1.083
1.083
1.083
M M
2.000
-
400
800
800
H M
5.1 Control compliance with the quality standards on a regular basis
5.2 Continuously monitor customer satisfaction
5.3 Launch the Quality Excellence Awards
Work stream 1. Set up the Cyprus Quality Labels Management Unit
Budget per year 18 19
20
1.2 Staff the CQL Unit Work stream 2. Develop the Cyprus Quality Labels system 2.1 Define the labels (concepts plus visuals) 2.2 Define the quality standards and the rules of the game for the CQL 2.3 Define processes for the efficient management of the CQL system Work stream 3. Deploy the CQL system 3.1 Develop the e-Platform to support the CQL System 3.2 Provide training to the team of advisors 3.3 Organise public launching event of the CQL system 3.4 Conduct initial assessments of applicants Work stream 4. Market and promote the CQL system in Cyprus and the markets 4.1 Prepare and implement a CQL Marketing Plan 4.2 Develop rich and engaging B2C online marketing content Work stream 5. Implement a strong monitoring and enforcement system
Total
6.9701
732 2.472 1.883 1.883
L: Low M: Medium H: High NR: No Risk 1The budget of € 6.9 mil covers the cost of developing the QLS.
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Timetable 17
1.1 Reach an agreement on the organisational structure of the CQL Unit
251
Years 18 19
20
Period 21-25 26-30
•• •• • •• • • • ••• • • • •• ••• •• •• ••• • • • •• • • •
CYPRUS TOURISM STRATEGY
3
Run a visual pollution initiative
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
252
1Y1Q-4Y1Q
Issue(s) to be resolved At the time being, visual pollution is extremely high in Cyprus, not only in almost all tourist areas, but also along roadsides and in villages tourists drive through. An abundance of ugly and ineffective advertising signs, illegal unfinished construction, debris, and other rubbish at the roadside is strongly affecting the beauty of the country. Especially, but not only, tourists from northern or central European markets find this really upsetting and it lowers the quality of their customer experience significantly. Furthermore, buildings often are perceived as “soulless”, not showing a hint of where they are, without any traces of traditional Cypriot architecture.
B.
Initiative summary The first step is an identification process of the most disturbing elements to be identified and documented by an inspection team touring the various regions. A selection of the 100 “darkest spots” of the island will be made with the help of a “visual pollution index” and a plan about how to clean them up. Legal enforcement will be ensured, if necessary with new legal norms. Actions will be planned and executed in collaboration with local authorities. The cleaning-up will be accompanied by educational measures, and incentive and award schemes to sustain the efforts. Another part of the initiative will identify crucial elements of traditional Cypriot architecture to be highlighted in renovations and new buildings.
C.
Key benefits of a successful initiative implementation Once experiencing the true beauty of their place, and being educated about the benefits and ways of preservation, local communities will automatically take pride in protecting their places better. The incentive and award schemes as well as media coverage and increased tourism benefits will be “infectious”, leading to other places joining the new dynamic. As cleaning up is accompanied by a gradual reintegration of traditional Cypriot architecture, places will regain not only beauty but also character and soul, leading to higher attractiveness for tourists, subsequent economic benefits, and increased local pride and wellbeing.
D.
Action plan Work stream 1. “Dark spot” elimination programme The most critical spots and elements all across Cyprus will be detected, documented, and prioritised according to urgency and importance of an aesthetic makeover. The top 100 will be selected as goals for the coming 3 years. Before approaching local authorities and communities, a funding incentive and award programme will be developed. Together with mayors, local businesses, and community representatives the programme will then be rolled Updated version 23.03.2017
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out, creating a new dynamic of more aesthetically pleasing villages, roadsides, attractions, and buildings.
Action 1.1 Identify and prioritise critical visual pollution The first step is to identify the most critical visual pollution categories; among others, these will be: •
Advertising signs
•
Debris and rubbish dumps
•
Illegal and/or unfinished buildings
•
Unused, unfinished, and demolished shacks, huts, or houses
With a check list of critical elements and armed with cameras, a team of 3-5 inspectors (could be from the former CTO quality management unit) will travel through the places tourists frequent or pass by most. The list of places will be determined following an analysis of number of hotel beds per village/town/region, popular routes, and excursions. The checklist will contain ratings for level of visual pollution, overall and per category, and first ideas regarding required measures and investments. Key criteria would be “eye sore level”, type of upsetting element, ownership, degree of ease of removal, related cost, etc. Based on the resulting visual pollution index, a prioritisation of the worst 100 places will be done.
Action 1.2 Initiate financial and other facilitation measures The first question the Ministry will encounter in affected areas will be “Who is going to pay for the cleaning up?”. The majority of the funding will have to come from the public sector, split between central and local funds. In many cases the necessary funds will be rather low, though. Taking off signs, removing debris and rubbish dumps or tearing down old huts does not require heavy financing. The following incentive and enforcement measures should be applied, depending on each case: •
Required “cleaning” efforts for destinations applying for labels, e.g. “most beautiful traditional villages of Cyprus”
•
Connecting certain centrally financed infrastructure works (e.g. roadworks) to cleaning measures (to be cleared with interministerial commission)
•
Legal enforcement with the help of local authorities regarding illegal buildings, garbage dumps, etc.
•
Offering of incentives: e.g. a big central sign/car stop showing local businesses relevant for tourists, replacing all individual signage formerly littering the place.
•
Aside from labels, an award scheme awarding, for example, “most improved villages of Cyprus”
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Action 1.3 Engage local stakeholders and start cleaning process Following the local reports and a decision about the right approach per place, the Ministry should agree with local authorities about: •
Actions
•
Timing
•
Funding
•
Schemes used
Integration of local businesses should follow in a second step through a meeting with local entrepreneurs and community representatives. The meetings should clearly highlight the benefits of the programme and be held in a constructive manner, trying to develop even more “beautification” approaches with the locals. One of the most important actions in this step is to identify the system of "prizes, punishments and aides" to accompany the program which may include possible VAT deductions (total or partial), a very public and official recognition of the best examples, up to making the granting of new building licenses subject to the achievement of certain objectives in the reduction of "dark spots". “Before and after” photos and photoshop creations could show how beautiful places could look after the cleaning efforts, success stories should be shared and results and benefits highlighted in order to overcome a certain degree of local “blindness”.
Work stream 2. “Care for Cyprus” education programme In order to create a new dynamic of “aesthetic revolution” in Cyprus, an education programme shall be launched, and be executed year after year for many years to come. The main programme targets will be high schools, universities, and colleges, with organised spill-over effects into local families and events. A further target group will be local businesses.
Action 2.1 Decide about programme The NTA follow-up organisation together with the Ministries of Agriculture, Rural Development, and Environment and that of Education and Culture should meet in order to define the programme and/or see how to integrate it into existing environmental programmes targeting students of different ages. The aim must be the incorporation of the concept of visual pollution into curricula, project days and local politics.
Action 2.2 Roll out programme into local communities The roll-out should be nationwide, especially for schools, colleges, and universities. Businesses should be approached in the prioritised target communities first. The implementation of the programme is different from target segment to target segment. The following approaches are recommended for the three principal groups: For high schools: in a fun way, project days like “we clean our village” or a photo tour of the most beautiful and the ugliest spots, with presentation of the projects to family and friends during a school event. For colleges/universities: integration of related content into tourism courses, e.g. in destination management or similar
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For businesses: events stressing the legal norms, but above all possible labels or awards with the resulting benefits. Clear mandatory and voluntary guidelines and tips on how to contribute to and benefit from the programme should be prepared and distributed. For all: A national “Care for Cyprus” day in which cities and communities organise cleaning events with people from all kind of institutions, organisations, and businesses spending some hours picking up rubbish, for example. THR additionally recommends the publication of a brochure to be distributed widely within Cyprus society, tourists, tour operators and the media with the commitment to beautify and improve Cyprus. It would show the list of dark spots that will be removed next year and the "owner" (agent responsible for) of the action. The following year, a new brochure would show what has been achieved and presents the new objectives.
Work stream 3. Enhance the built environment On top of the activities directed towards reducing visual pollution, this work stream is all about increasing the beauty and authentic character of places, especially villages. It will enhance the use of traditional Cypriot architectural elements in new buildings, but also their integration into existing buildings. The term architecture should be interpreted in a broad way as it also could refer to other non-building related approaches like landscaping, for example. Again, the implementation will be the result of a mix of enforced and voluntary measures.
Action 3.1 Identify Cypriot style architectural elements Together with the Ministry of Education and Culture and selected experts from Cypriot arts, history, architecture and construction sectors, a task force will be started with the objective of identifying authentic architectural Cypriot elements and discussing ways of (re-)integrating those elements in towns, villages and even resorts. Here is a list of possible elements to be taken into consideration: •
Doors and windows
•
Fences
•
Pavements
•
Plants
•
Fountains
•
Road signs
•
Street lamps
The result of this action should be a prioritised list taking into account the level of the visual upgrade, uniqueness of the element, ease and cost of implementation, application to new vs. existing structures, and photo friendliness.
Action 3.2 Fix incentives, guidelines, and norms One approach will be closely linked to Cyprus’ new system of destination labels, especially regarding villages and small towns. The (re-)integration of certain elements should be turned into label criteria. Legal enforcement is another possibility, developing and applying norms regarding renovation works or new buildings in village centres. It will be also important to develop such norms and guidelines for hotels and restaurants; in this case, especially the cost-impact
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relation needs to be taken into consideration. Consultation with the two hotel associations of Cyprus is highly recommended here. Other approaches should be motivational, clearly highlighting the benefits of a “Cyprus style” approach. For example, a village could decide to market itself as the village of the old Cyprus doors, where a whole street or various streets could be renovating and painting their old doors in different styles and colours. Tourists will flock to such a place to enjoy the atmosphere and for picture taking.
Action 3.3 Execute and promote the programme The legal enforcement will be executed rather than promoted, while still highlighting the reason for and benefits of the measure. It is recommended to create 3-5 pilot village cases, possibly linked with the labelling system. Before deciding on the pilot cases, it is recommended to estimate the openness of mayors to the programme. This way success stories can be created, motivating other villages/places to follow. For certain types of renovations (e.g. of historic houses) and new buildings (e.g. houses in village centres) the new norms must find their way into the local administration processes, followed by a clear communication via the media and public sector employees. The hotel initiative should be communicated via the hotel associations, also here a label could be considered, e.g. “Typical Accommodations of Cyprus” or “At home, Cyprus style”. The government should support or even itself undertake related marketing approaches, for example feature the “old doors of Cyprus” village on their websites and in tourist guides and postcard series. Finally, the Ministry could consider tax breaks for house or hotel owners investing in certain traditional architectural elements.
E.
Main stakeholders and their roles Responsible
National Tourism Authority
Accountable
Informed
x
x
x
Ministry of Education and Culture
x
Ministry of Agriculture, Rural Development and Environment
x
Local authorities
x
Local private stakeholders
x
Schools, colleges, universities
x
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Consulted
CYPRUS TOURISM STRATEGY
F.
257
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. “Dark spot” elimination programme
Total (.000 €)
Budget per year 18 19
17
2.215
738
738
738
-
3.040
553
1.105
1.105
276
H M
2.520
775
775
775
194
M M
2.619
2.619
470
20
17
H
H
1.1 Identify and prioritise critical visual pollution 1.2 Initiate financial facilitation measures
and
other
1.3 Engage local stakeholders and start cleaning process Work stream 2. “Care for Cyprus” education programme 2.1 Decide about programme 2.2 Roll out programme into local communities Work stream 3. Enhance the built environment 3.1 Identify Cypriot style architectural elements 3.2 Fix incentives, guidelines, and norms 3.3 Execute programme
and
Total
promote
the
7.7751 2.066
Timetable Years 18 19
20
••• •• • •• •••• • ••• •••• •• • ••
Period 21-25 26-30
L: Low M: Medium H: High NR: No Risk 1 The budget of € 7.8 mil does not include any kind of monetary incentive, although we recommend that the Government considers the possibility of some tax incentives.
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Outcome 2. Excel in planning and development Strategic objective D. Implement excellent tourism development master planning
E. Define and manage clear growth models for all regions
Measure
Target
4 Implement the National Tourism Planning initiative Number of Tourism Development Master Plans elaborated/ year
• •
2017: 6 areas 2018: +6 areas
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
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
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.
258
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4
Implement the National Tourism Planning Initiative
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
259
1Y1Q-4Y4Q
Issue(s) to be resolved Tourism planning in Cyprus is fragmented to non-existent. Historic development has resulted in excessive linear coastal building activities and a fairly homogenous product. Little attention has been paid to the opportunities presented by tourism development in the rural areas, and Cyprus has found itself in a position whereby it is perceived almost exclusively as a rather expensive yet undifferentiated sun and beach destination. This situation will be exacerbated when the number of tourist arrivals increases as a result of other strategic initiatives. The real estate sector has, to a large degree, been operating autonomously, rather than in conjunction and collaboration with tourism. As a consequence, the volume, locations, and quality of tourist-related real estate has not always met the expectations of buyers (and renters). The statutory and regulatory framework in which tourism development is permissible is outdated, costly to investors, long, and in the worst case is dysfunctional. The current system has been abused by some developers, and without major changes, the situation will not improve.
B.
Initiative summary With this initiative, a Centralised Tourism Planning Unit (CTPU), also referred as the Department of Integrated Planning within the NTA on Chapter 12, will be established. It will apply the planning framework, guidelines, and associated recommendations prescribed in the Integrated Tourism Development Plan for Major Tourism Areas in Cyprus (ITDPMTA). CTPU will have to review and amend the statutory and regulatory framework where necessary. For a proper implementation CTPU will define a land policy (acquisition, procurement, and compensation) that will facilitate the planning and development of the new tourist accommodation and associated facilities and services to meet future tourism demand. The initiative will also focus on the development of the Tourism Development Master Plans for each of the 13 tourist development areas in Cyprus and, among other things, identify the tourist land and establish the use of each type of tourism land (hotels, resorts, Residential, tourist equipment, tourist commercial, etc.). This will bring major positive aspects to a healthy development of tourism in Cyprus, will also raise some problems (administrative, legal, social, ...) that should be adequately foreseen and addressed.
C.
Key benefits of a successful initiative implementation The new structure established will allow the government to integrate tourism development with its other strategies e.g. agriculture, infrastructure development, waste management. The real estate problem will be solved by creating a permanent link between tourism and real Updated version 23.03.2017
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estate. Tourism Development will follow clear Master Plans that will attract the attention and participation of the national and international investment community, and give the country a more attractive, differentiated, and sustainable tourism product.
D.
Action Plan Work Stream 1. Establish a Centralised Tourism Planning Unit (CTPU) The tourism planning initiative is a national effort, an integral part of the national tourism strategy. It is not appropriate for any part of it to be delegated to regional or municipal planning authorities, even though they will be consulted and informed at regular intervals. The effort also requires specialist input, and needs to be under the control of a single, unified, department.
Action 1.1 Appoint a department head and define an organisational structure The action required is to appoint the best person to lead the department and the national tourism planning effort - ideally someone with both planning and tourism experience. The best person may be someone already involved in development planning in Cyprus at government level, or may be a person with international experience in tourism planning and development, who can bring an open-minded commercial approach to the new department and the initiative. It will be the responsibility of the head of department to define an organisational structure that can efficiently deliver the planning effort. External advisory services may be needed to assist and support the structuring process.
Action 1.2 Appoint other department team members The next action following the organisational design involves appointing team members who have the appropriate levels of expertise to deliver the Master Plans, and manage the tourism planning system. The team should comprise a percentage of public officials with up to date knowledge and expertise in planning and the Cypriot planning system. A further percentage of team members, with appropriate expertise, should be recruited from the private sector (nationally or internationally). The department will also require the services of advisors to perform many of the specific planning actions, as well as advise on more general tourism planning matters.
Action 1.3 Define a schedule for the departmentâ&#x20AC;&#x2122;s work streams and actions The CTPU must be able to deliver its work in a swift, efficient manner so that at no time does it delay the progress of any other strands of the tourism strategy, or delay the development of tourist accommodation and services. The work schedule must include all necessary briefings to, and cooperation with, other bodies who will have responsibilities for concurrent or later stages of the tourism development process e.g. investment agencies. The work streams must include the IMTC as it plays a key role in major planning related decisions.
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Action 1.4 Define budgets and secure funding from the relevant government department The CTPU must be able to carry out the schedule of work streams and actions in the knowledge that the required annual funding is in place to meet its financial commitments. The action demands that detailed short and longer term budgets be drafted and approved. The initial action must be followed up with on-going financial management of the department in accordance with governmental rules and regulations.
Work Stream 2. Launch Regional Tourism Development Master Plans A TDMP is a holistic, integrated approach to the planning of a tourism resort, TZNI or cluster. It involves elaborating a detailed set of documents that cumulatively establish a framework (conceptual and technical guidelines) for the development and operation of the tourist resorts, tourism zone of national interest (TZNI), and clusters identified in the ITDPMTA. The scope of Cyprus’ TDMP should include: •
Market, Economic, Political & Social Analysis (national, and specific to location)
•
Story Telling – a carefully scripted explanation of what makes this location desirable, what will attract tourist to it, what differentiates it from others, and what will make a tourist’s experience of the location truly memorable
•
Development Programming - specifying the number, scale, and scope of all features to be developed within the land area available
•
Business Modelling - for the different types of asset classes to be developed within each area
•
Land Use, Circulation, and Landscape Planning – at preliminary design level
•
Infrastructure Network Planning – including pre-identification of existing supplies and calculation of final needs
•
Environmental Studies and Planning
•
Architectural Drawings - at concept level of detail for respective assets
•
Financial Feasibility Modelling
•
Investment Planning - Identification and definition of opportunities and packages to be offered
•
Branding, Sales & Marketing Planning – outline concepts to be employed by investors/developers, and operators
•
Operational Management Strategy
•
Implementation Programming
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Action 2.1 Appoint the planning team(s) A TDMP is not solely a design planning exercise carried out by planners and architects. It needs the skills of a multi-disciplinary team, especially: •
Economists
•
Planners
•
Architects
•
Engineers
•
Marketers
•
Financial/Investment Planners
A team responsible for the effort required to elaborate each of the TDMPs needs to be appointed. The team should comprise a mix of departmental personnel, and external specialists. Local expertise from each of Cyprus’ tourism regions should be represented in the team.
Action 2.2 Analyse local destination situations This action involves analysing and documenting the current national situation, and the situation pertaining to each individual location. The national situation data (specific to the tourism strategy) will already be on file, and updated regularly, by CYSTAT in collaboration with the NTA. The local situation analysis (in detail) should include, as a minimum: •
Market Situation – Existing tourism performance and strategic objectives (tourist arrivals, expenditure, real estate market performance, source markets, main activities and experiences offered, new product opportunities, differentiators, etc.)
•
Demographic Situation – local resident population, levels of employment/unemployment, etc.
•
Economic Situation – supply (volume and quality standard) of existing tourism assets and services in the local area, other economic activity in the area, etc.
•
Social Situation – specific needs of the local resident community
•
Etc.
Action 2.3 Craft the ‘story’ of the location What makes any location desirable, what will attract tourists to it, what differentiates it from others, and what will make a tourist’s experience of the location truly memorable is not always obvious. The story of the location is an integral component of a TDMP. It requires careful crafting because it will influence many of the components of the plan and how they are to be managed at all planning stages, and then onwards into operation of the completed development.
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There are some great examples of destination storytelling in the Nordic countries, this paper shows 5 different cases from Finland to Iceland: http://www.nordicinnovation.org/Global/_Publications/Reports/2010/201012_StorytellingAn dDestinationDevelopment_report.pdf Good stories are being developed by professional storytellers and later transferred into the digital space with the help of audio-visual material. As an example, for a professional strategic storytelling company check out http://bbcostorytelling.com/
Action 2.4 Determine the Development Programme The Development Programme specifies the volume, scope and scale of the main assets and associated facilities to be developed (or upgraded/redeveloped) in any resort/TZNI/cluster in Cyprus. The programme must take into account the core strategy for any development area, the ‘story’, and the ‘Growth Strategy’ specified for the respective location (see initiative 5. Growth modelling initiative). Technically, it must comply fully with the densities / build coefficients, categories and quality levels of accommodation and associated services that must be developed.
Action 2.5 Define the Business Models A Business Model should be defined for each of the asset/service classes specified in the TDMP. The action should identify, illustrate and document: Targets (Customer Segments), Customer Value Proposition, Sales & Distribution Channels, Key Activities, Key Partners and Key Resources, Revenue Streams, and Main Expenditure Categories. In order to develop and discuss this approach with local stakeholders from each of the selected region in Cyprus, a highly practical tool like the Business Model Canvas of Alexander Osterwalder, should be applied. The model, tutorials, tools, and more info can be found here: http://www.businessmodelgeneration.com/canvas/bmc
Action 2.6 Prepare land use, circulation and infrastructure plans Based on the components and criteria of the development programme, a set of plans must be prepared to illustrate the proposed spatial layout. These will illustrate the opportunity (and possibly limitations) offered by the development land. The plans should include land use (plots and assets), circulation (vehicular and pedestrian), and landscaping (hard and soft), initially prepared with basic detail, and developed at later stages to a level sufficient for any official, investor, developer, or financier to be able to fully understand the concepts and content being proposed. More detailed level plans must also include the provision and location of all programmed tourist accommodation, residential real estate, tourist services, leisure and sporting facilities, entertainments, and town/village centres. Finally, prepare drawings, and supporting documents, to specify the infrastructure that will be required i) to ‘enable’ the resort i.e. external infrastructure, and ii) to ‘facilitate’ development and operation of the respective resort components.
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Action 2.7 Anchor local design language for main assets The architectural language to be expressed in any resort/area must be based on a variety of factors – from location and topography, to quality standards that must be achieved, as well as business model and operational criteria. The Cyprus Style architecture programme will provide excellent guidance on authentic Cypriot design aspect. Prepare a set of sketches / drawings / renderings to illustrate the architectural language that should be applied in the resort/area. This should be supported by a comprehensive document that fully explains the illustrated concepts.
Action 2.8 Secure financial feasibility and investment A detailed feasibility model must be prepared for every project. This must provide a detailed set of financial statements that include as a minimum: •
Capital Costs (Infrastructure, Construction of Assets and Soft Costs, Marketing & PreOpening)
•
Estimated Revenues
•
Estimated Operating Costs
•
Construction and Operating Cash flows
•
Profitability and Investment Attractiveness
Every TDMP will require investment from both public-sector investors (national and international), and government. The investment strategy, and the investment packages, for each development must be defined in conjunction with InvestCyprus and its ‘tourism investment unit’ (specified in another strategic initiative), and any other of the government’s investment/financial advisors. Clear and attractive info material, including multimedia content for larger projects, must be made available to investor in and outside Cyprus.
Action 2.9 Determine development model and implementation programme Different types and scales of projects may/will require different development models to take them from planning to operation. This action requires the CTPU, after consultation with other interested parties, to define the most appropriate development model for each of the projects. A variety of development models exist – from being led by the public sector, to PPPs, or full private sector involvement. The full range of options must be examined in detail before being applied to each project. An implementation plan will be required for each individual project. This action involves collating all of the decisions made in previous actions, and formulating them into easily understood, logical plans. These form an integral part of the TDMPs and will be used to assist investors/developers (and/or other stakeholders) to formulate the detailed plans they will require to build and open their tourist development project.
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Work Stream 3. Review and redraft the Legal and Regulatory Framework The regulatory framework that administers, processes, and controls planning and development has resulted in a number of serious issues that have detracted from the country’s tourism investment credibility, and given the impression that little or no genuine control exists. The existing laws and regulations relating to planning and development need reviewing and redrafting to bring them up to date as per the needs of tourism, and other economic sectors reliant on planning and development. This process needs to be far-reaching and swift, so that an updated framework can be applied to the respective TDMPs.
Action 3.1 Review and redraft the legal and regulatory framework The main areas that need to be addressed are: •
Development Densities – Define a more standard set of ratios/coefficients, consistent throughout the island, for the development of tourist projects. There will need to be some differences in the ratios applied to single asset developments resorts or TZNIs, but there should not be differences in the ratios applicable to new resorts in different areas.
•
Process Time – The time required to obtain statutory permission for a development should be minimised to make it more attractive to developers/investors, and more manageable by the planning authorities.
•
A ‘fast track’ process may be appropriate to stimulate tourism development and engender positive interaction with developers/investors.
•
Process Phases – The phasing of the planning process should be changed to enable ‘preliminary’ master plans to be submitted for ‘outline’ approval, before an investor/developer is committed to incurring high costs preparing detailed master plans and supporting documents without any guarantee of approval.
•
Feasibility – All multiple asset projects (mixed-use resorts and TZNI components) should be required (by law) to provide a feasibility study as part of the documents needed to obtain statutory planning permission. A preliminary feasibility study should be presented with an application for outline approval, with a detailed study required to accompany detailed plans and other documents necessary to obtain full planning approval.
Realising the above may also dictate that some changes need to be made to Local Plans, Area Plans, and the Policy Statement for the Countryside to facilitate the proposed tourism development projects.
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Action 3.2 Set sustainable tourism development conditions The sustainable development of tourism demands that the sector must make a positive contribution to sustainability in Cyprus as a whole. All tourism development projects should be required to include the following sustainability measures in their development and operational plans. These should include as a minimum: •
Using renewable energy sources (RES), particularly solar, to generate a share of the resorts’ power requirement – the share of such power to be defined;
•
Designing and implementing a strict solid waste management policy that includes maximising the volume of recycling. All projects should have targets that operators are obligated to meet, or face penalties;
•
Providing cycle lanes adjacent to or in close proximity to all roads to encourage the use of alternative means of transport;
•
Using Recycled water for use in the irrigation of all soft landscapes, including sports fields and golf courses;
•
Installing energy efficient lighting systems, particularly for external areas of resorts.
•
Integration of Cyprus Style elements into architecture and landscaping
Action 3.3 Review and redefine existing designated tourism development zones The national tourism planning initiative must take precedence over all other tourism development. The existing designated tourism development zones will complicate the situation if kept in force as is, and may make it more difficult to control tourism development in the way it needs to, or to control unwanted tourist development. The action requires all designated tourism zones in which no tourism development planning application has been received or approved to have the designation removed.
Work Stream 4. Establish a Land Acquisition Strategy The limited availability of appropriate state owned land in Cyprus dictates that almost all proposed new tourism developments will have to be planned on land that is currently in private ownership. In many cases, the selected development plots will be in multiple ownership. Existing private landowners are unlikely to be those who have the desire or capability to undertake the required strategic tourism developments, but could become partially involved in the new developments. A land acquisition/land procurement strategy is required so that all land issues can be dealt with equitably and efficiently. The recommended participatory/compensatory measures are provided in the ITDPMTA.
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Action 4.1 Define the policy(ies) for private land ownership management This action requires a legal policy to be defined by the National Authorities of Tourism that provides for a number of potential land issues, such as: •
The private landowner who already has permission for a tourist development (that they may have had for some time), but finds that the land is very close to, but outside, the tourist development area proposed in the tourist development plan (resort or tourism zone of national interest (TZNI)), and therefore becomes precluded from carrying on with their proposed development.
•
The private landowner who already has permission for a tourist development - on land that is inside the new tourism development area, but whose original development concept is different to what is now proposed and is incongruous with the now proposed tourism development.
•
The private landowner whose land is inside the earmarked tourism development area but not zoned for tourism development – but is within an area specified in the tourism development plan, with the owner having no desire or capability to become a tourism investor/developer.
Other countries best practices According to THR’s experience in Spain, Greece, Croatia, Belgium, etc. all proposed actions can be carried out on the basis of formulas and mechanisms compatible with EU standards. For example, the Government can acquire land to better manage the agricultural, industrial or tourist land policy. In Catalonia (Spain) the Catalan Land Authority acquires land (under a variety of acquisition formulas) and then rents or sells it under specific conditions to promote the use of the land for industrial purposes, favouring, in this way, the development of "Industrial Clusters" in the most suitable places. Practically in all EU countries, the authorities responsible for Heritage often have specialised organisations to operate and earn income for it. Expropriations for reasons of social or national utility, are a mechanism often used by the States to acquire assets (mainly real estate). However, we suggest to explore some of the following directions we have observed in some mature tourism destinations: •
Right to drive a Master Plan When a developable land belongs to several owners, it is often very difficult for them to agree (for a variety of sometimes very personal reasons) on what to do and this blocks development. A useful best practice is one that says that if the owner or owners of 60% of the land agree, they can impose on the rest of the owners their Master Plan and proceed to develop. This may include compensation mechanisms or not.
•
Land exchange The TZNI could have 20% of its soil obligatorily available to be exchanged for land of the type described above.
•
Exchange of land by shares Create the framework that allows these investors to acquire shares of the developer (up to a maximum of 10%) or acquire small pieces of land to develop on their own, strictly following the rules established by the developer’s Master Plan.
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Action 4.2 Reinvent the Tourism Land Bank The action requires updating the tourism land bank (both public and private land), led by the National Authority of Tourism. This is the next step after the TDM Plans are already developed and implemented and after the negotiations / agreements with the private sector about land swaps are done. The action entails: •
Identifying appropriate public authorities who can provide information on the development sites available in the country.
•
The planning unit will obtain an inventory of the available land for the Land Bank, including land title documentation to ensure that title and ownership transfers are not an issue. There are also leasehold approvals that have not progressed and which can be reassigned.
•
The National Authority of Tourism may consider divesting from specific assets to focus more on new projects and creating opportunities for small to medium-sized Cypriot investors.
•
The CTPU will launch the process of clearly delineating the areas and sites for tourist development.
•
The site descriptions will be posted online with requests for Expressions of Interest. The CTPU will evaluate those responses and decide on those prospects that are most in line with the Cyprus Tourism Strategy.
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E.
Main Stakeholders and their Roles Responsible
National Tourism Organisation
x
Ministry of Interior, Dept. of Town Planning and Housing
x
Ministry of Interior, Dept. of Lands and Surveys
Accountable
Consulted
Informed
x x
x
Ministry of Agriculture, Rural Development and Environment
x
x
Ministry of Finance
x
x
Regional & Local Government Authorities of Cyprus
x
x
Government Legal Team / Advisors
F.
269
x
x
Cyprus Investment Promotion Agency (Invest Cyprus)
x
x
Bank of Cyprus
x
x
Association of Large Investment Projects in Cyprus
x
x
Cyprus Hotel Association
x
x
Cyprus Hoteliers Association
x
x
Royal Institute of Chartered Surveyors in Cyprus (RICS)
x
Cyprus Real Estate Agents Association
x
Cyprus Land and Building Developers Association
x
Promoters of Paralimni Marina, Ayia Napa Marina, Limassol Marina, Poseidon Grand Marina (Pafos)
x
Promoters of operational, and as yet undeveloped, golf course projects
x
Selected promoters of proposed casino resort
x
Operational Action Plan & Budget (for the 4 first years) The budget presented below is for establishing the land acquisition strategy but, above all, to design and activate the entire Land Bank system. It includes the identification of the areas, the elaboration of the dossier of each area, the due-diligence when appropriate, the Master Conceptual Plans, and the digitalisation of all this for inclusion in the digital database.
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Priority
Budget for four years
Work stream / Action Work Stream 1. Establish a Centralised Tourism Planning Unit (CTPU)
Budget per year 18 19
17
920
460
460
-
-
H
L
6.200
689
2.756
2.756
-
H
L
730
-
209
417
104
M NR
2.175
-
242
967
967
M NR
3.666
4.139
1.071
Years
20
17
1.1 Appoint a department head and define an organisational structure 1.2 Appoint other department team members 1.3 Define a schedule for the department’s work streams and actions 1.4 Define budgets and secure funding from the relevant government department Work Stream 2. Launch Regional Tourism Development Master Plans 2.1 Appoint the planning team(s) 2.2 Analyse local destination situation 2.3 Craft the ‘story’ of the location 2.4 Determine Programme
the
Development
2.5 Define the Business Models 2.6 Prepare land use, circulation and infrastructure plans 2.7 Anchor local design language for main assets 2.8 Secure financial feasibility and investment 2.9 Determine development model and implementation programme Work Stream 3. Review and redraft the Legal and Regulatory Framework 3.1 Review and redraft the legal and regulatory framework 3.2 Set sustainable development conditions
tourism
3.3 Review and redefine existing designated tourism development zones Work Stream 4. Establish a Land Acquisition Strategy 4.1 Define the policy(ies) for private land ownership management 4.2 Reinvent the Tourism Land Bank Total L: Low
10.025 1.149 M: Medium
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H: High
NR: No Risk
Timetable
Risk
Total (.000 €)
270
18
•• • • • •
19
Period 20
••• • • • • • • •• • • ••• •• • •• •• • ••
21-25
26-30
CYPRUS TOURISM STRATEGY
5
Steer Cyprus Tourism Growth modelling
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
271
1Y1Q-4Y4Q
Issue(s) to be resolved Tourism growth and development in Cyprus has been left largely unguided and uncontrolled for a number of years. Tourism investors have been making their own quick decisions on when, where and how to establish or grow tourism developments. The government has allowed this to happen and even encouraged this unsustainable pattern of growth by zoning large areas of coastal land for tourism growth, and (non-)pursuing strategies that offered more opportunity to the real estate sector than stimulate a well-planned, value-creating sustainable development. There is not only a strategic vacuum but also a market and destination intelligence vacuum, responsible for taking decisions that led to unsustainable developments and business models. The lack of strategic analysis and data is not dramatic, but the missing transformation into intelligence and its use and application in development decisions are.
B.
Initiative summary A crucial department within CTPU will be founded, the Development Intelligence Team (DIT). It will ensure all planning and growth models, both on national and especially on a regional level, are based on deep market and destination understanding. DIT will collect all necessary key data, transform it into intelligence and support decision-making processes within the Ministry and CTPU. It will make sure market and destination dynamics are taken into account and advise on possible planning amendments over time.
C.
Key benefits of a successful initiative implementation When the development growth in the number and quality of tourists is strategically defined in accordance with a robust model, and supported by a raft of strategic initiatives, Cyprus will benefit from greatly enhanced direction for the sector, boosting investor interest and sustainable business strategies. The strategically planned distribution of development (and tourists) benefits many more communities and their resident population, both in Cyprusâ&#x20AC;&#x2122; coastal regions as inland. Destination differentiation based on market observance allows businesses to benefit from operating products and services that are in demand by strategic target segments, with other sectors indirectly benefitting from the increased purchasing power of tourism industry operators. When the speed of development is regulated based on demand targets, the tourism sector, associated sectors, and the country as a whole, benefit from not having to finance excess supply, and not having to reduce rates to try and get whatever business is available.
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D.
272
Action Plan Work Stream 1. Establish a Development Intelligence department at CTPU Tourism planning, on a national basis, will be the responsibility of the CTPU. This specially formed organisation will also be responsible for monitoring tourism development growth and advising government, and informing industry stakeholders accordingly. The Development Intelligence team (DIT) will work hand in hand with Regional/Local Government Authorities, NTA, CYSTAT and all other applicable departments and agencies responsible for collating, analysing and retaining statistics and other information relating to all sub-sectors of tourism, as well as real estate sector development and performance.
Action 1.1 Set up the department First the head of DIT should be recruited. The best person is a strong communicator familiar with managing market and business intelligence techniques and applications. It will be the responsibility of the head of the new department, in consultation with the CTPU head, to create a structure that can efficiently perform its duties. Key functions to be implemented include the following: •
Statistical data collection and management
•
Market research and intelligence
•
Reporting and communication
•
Consulting and training
•
Etc.
Action 1.2 Fix reporting schedules The DIT must monitor market and industry development and performance on a regular basis, and report as required. Regular is defined as being on a monthly basis, with supplementary detail quarterly, half yearly and annually. This involves creating and managing a data collection schedule from the relevant cooperating departments and authorities, and compiling the department report. The department should establish clear monthly deadlines and follow-up protocols for all data and information gathered (as laid out in Work Stream 2)
Work Stream 2. Start an online Development Intelligence Centre The department will be managing all key tourism development data, and using it to guide the decision-making processes of the CTPU and the NTA. This requires the establishment of a reliable intelligence platform (unless such a system already exists that can be adapted to the requirements of the CTPU department).
Action 2.1 Establish data requirements, frequency, and transfer methodologies The department must agree with the primary sources, firstly, precisely what data is required, secondly, when the data is required (frequency), and thirdly how data will be transferred and in what format(s). The following data will be required, as a minimum, on top of the usual market data:
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•
Total tourist arrivals – including point of entry, source market, purpose of visit, and main location whilst in Cyprus.
•
Total tourist expenditure.
•
Total number of applications - received for planning permission inside and outside the specified tourism development areas.
•
Total number of approvals - given for planning permission inside and outside the specified tourism development areas.
•
Total number of refusals - for planning permission inside and outside the specified tourism development areas + reasons for refusal.
•
Total number of requests for additional information - for planning permission inside and outside the specified tourism development areas + the reason and nature of the additional information requested.
•
Total number of real estate transactions – by residential and commercial categories, including domestic sales and sales to foreigners.
•
Total number of title deeds issued – tourist accommodation types, commercial real estate, residential real estate, other types.
•
Total number of building licenses issued – including by category (tourist accommodation types, residential real estate, commercial real estate).
•
Total number of developments (accommodations and services) opened in specified tourism development areas.
•
Volume of infrastructure works – planned (to include planned start and completion dates) and completed, for roads, potable water, wastewater & sewage, power, solid waste, and communications.
The list above is indicative of the main data required to be able to evaluate and report on the objectives of the department. It is expected that the need for additional items will be identified at the relevant time and in accordance with planners and deciders. Major data sourcing partners will be the following, amongst others: •
Statistical Service of Cyprus (CYSTAT)
•
National Tourism Authority (former Cyprus Tourism Organisation)
•
Regional & Local Authorities of Cyprus
•
Dept. of Town Planning & Housing
•
Dept. of Lands & Survey
•
Management Organisations of respective resorts/clusters
•
Industry associations
•
Etc.
Action 2.2 Agree on cooperation and coordination protocols The department must be the official ‘bridge’ between statistical data and development planning. It must, therefore, be a cooperative, coordinating department that establishes and maintains proper functional relationships with all of the other departments, organisations, and agencies from whom it is reliant on accurate, timely data. This action involves the department head agreeing on a set of routines and protocols with the respective heads of the other departments, organisations, and agencies from whom the
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data will be received, with other departments within the CTPU, and with the NTA. This must include but not be limited to: •
Use of automated, or manual, email to advise data uploads, updates, and other supplementary information.
•
Face to face meetings between representatives of the department and representatives of the cooperating departments, organisations, and agencies.
•
Roundtable meetings with representatives of all cooperating departments, organisations, and agencies - quarterly, half year and annually.
•
Face to face meetings with other departments in the CTPU.
•
Reporting to officials in the National Tourism Authority.
Action 2.3 Install and commission a software that is suitable for its purpose The department must ensure that the technology necessary to operate the department properly is installed and commissioned. The business intelligence software needs to meet the following criteria, at least: •
Easy integration into existing technology at data providers and/or
•
Easy data and information uploading functions
•
High user friendliness
•
Handy reporting tools, especially graphical data conversion for both online and handout reporting
•
Efficiency and reliability
Work Stream 3. Monitor and steer development processes CTPU will be focusing its effort on the areas prescribed in the Integrated Tourism Development Plan for Major Tourism Area (ITDPMTA) in order to attract investors and deliver the volume and type of accommodations and services prescribed. Given the high dynamics of the tourism markets and competitive landscapes as well as national and local economic and political processes, the development planning needs to be closely monitored, and if necessary adapted. The planning department within the CTPU will need regular updates of the data specified above, with the addition of the following type of information: •
Success of investment attraction efforts in respective areas
•
Progress on projects in planning and construction
•
New projects in operation
•
Marketing initiatives being pursued to promote respective areas
Armed with this information, it can decide whether the current focus of planning effort is correct, or whether (for a certain period of time) planning should be refocused regarding place, time, or type of development.
Action 3.1 Provide advisory services to stakeholders DIT will advise CTPU management on ongoing and planned developments across all tourism clusters in Cyprus. On the one hand, it will explain the Development Intelligence Reports on demand, on the other hand it should partake in internal and external meetings discussing
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ongoing and planned developments in order to question and enrich decision making. This will be the role of the DIT head and/or a consulting profile within the team. It will furthermore support CTPU management in explaining and defending strategic planning changes based on the rich information it holds.
Action 3.2 Amend the legal framework for improved development control The government must be able to accelerate or decelerate tourism development if market conditions dictate that such is necessary. This action requires defining a legally enforceable policy that allows the government to place a moratorium on tourism development if: •
Average occupancy in tourist accommodations falls below 63% in any given year because of a reduction in demand for whatever reason.
•
The number of unsold residential real estate units available for sale is more than the market can absorb in the ensuing 2-year period- (based on two years’ average sales over the past 5-year period)
•
And/or other factors to be defined
Action 3.3 Action legal orders on tourism development Based on the advisory provided to it, on the basis of the data evaluation carried out by the department, the government will need to issue orders to suspend or resume tourism development at the appropriate times. This action will require the government’s legal officers to draft and issue the relevant order at the relevant time. It is assumed that in compliance with standing orders, the government will also be required to publish the notice in official and public publications. Prior to public release, the order should be obtained by the department and, without undue delay, its contents should be formally notified to all other departments, organisations, and agencies. In advance of such legal notice, the department should informally notify all other departments, organisations, and agencies of the imminent arrival of the formal notice.
E.
Main Stakeholders and their Roles Responsible
National Tourism Authority
x
Ministry of Interior, Dept. of Town Planning and Housing
x
Ministry of Interior, Dept. of Lands and Surveys
Accountable
Consulted
Informed
x x
x
Ministry of Agriculture, Rural Development and Environment
x
x
Ministry of Finance
x
x
Regional & Local Government Authorities of Cyprus
x
x
Statistical Service of Cyprus (CYSTAT)
x
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Responsible
Accountable
Consulted
x
x
Government Legal Team / Advisors
F.
276
Informed
Cyprus Investment Promotion Agency (Invest Cyprus)
x
x
Cyprus Hotel Association
x
x
Cyprus Hoteliers Association
x
x
Royal Institute of Chartered Surveyors in Cyprus (RICS)
x
Cyprus Real Estate Agents Association
x
Cyprus Land and Building Developers Association
x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work Stream 1. Establish a Development Intelligence department at CTPU
Total (.000 €)
Budget per year 18 19
17
450
180
180
90
-
1.420
-
387
516
516
H M
1.650
-
-
825
825
M L
3.520
180
567
1.431
1.341
20
17
H
L
1.1 Set up the department 1.2 Fix reporting schedules Work Stream 2. Start an online Development Intelligence Centre 2.1 Establish data requirements, frequency, and transfer methodologies 2.2 Agree on cooperation and coordination protocols 2.3 Install and commission a software that is suitable for its purpose Work Stream 3. Monitor development processes 3.1 Provide stakeholders
advisory
and services
steer to
3.2 Amend the legal framework for improved development control 3.3 Action legal development
orders on tourism
Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 18 19
20
••• •• •• ••• • • •• •• • • •
Period 21-25 26-30
CYPRUS TOURISM STRATEGY
6
Install Product Development Unit
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
277
1Y1Q-4Y4Q
Issue(s) to be resolved Tourism in Cyprus is still highly dependent on the classic Sun & Beach model. Special interest tourism has a good potential thanks to the diversity of the tourism assets and the outstanding climatic conditions, but it is far from being well-developed. Furthermore, the current activities in the field of Special Interest tourism are not the result of strategic planning and efforts, and their impact and competitiveness could also be improved. The problematic consequences of the overreliance on Sun & Beach tourism are manifold: high seasonality, strong dependence on huge tour operator groups, difficult position in airline negotiations, temporary overuse of resources, high concentration of tourism activity at selected spots on the coastline, etc. The consequences for the stakeholders are challenging: high degree of temporary labour, weak negotiation position with market partners, low margin business models, environmental/resource problems, and more.
B.
Initiative summary A dedicated unit of experts within the Ministry will focus on the development of a more diverse and innovative product portfolio in alignment with the tourism strategy. They start the launch and/or strategic development of 13 different product types during the next 5 years, many of them being Special Interest tourism. Part of the products will be initiated and launched by the Ministry itself, other projects will be directly handed over to the private sector. The team will kick-off the first three strategic product types as early as 2017.
C.
Key benefits of a successful initiative implementation The new products will attract additional target segments from additional markets, above all in the mid- and low-season periods and to an important degree also outside the current mass tourism centres at the coastline. New specialist and service jobs will be created along with interesting entrepreneurial opportunities, also regarding complementary services like accommodation, restaurants, and other services. The market positioning of Cyprus will be sharpened, the portfolio risk lowered and return on investments increased thanks to a clear strategic focus on government support.
D.
Action plan Work stream 1. Create Product Development Unit within the National Tourism Authority A dedicated team will centrally lead a strategic product portfolio implementation. Especially Special Interest tourism development will no longer be opportunity based, but strategically Updated version 23.03.2017
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planned and realised. This allows for targeted and concentrated public and private sector investment, increasing product quality, customer value creation and aligned marketing. In order to achieve this, there needs to be dedicated teams leading each product’s strategic development.
Action 1.1 Define objectives and profile of the new unit The objectives of the new unit follow its mission, a possible mission being “Our unit leads and facilitates the development of new products in the strategically defined tourism types.” The new unit should at first be run by a team of around 4 people, growing in number as new types of tourism are added year after year. Their main responsibilities are the following: •
Prioritisation and managing of the product portfolio
•
Identification and development of investment needs (public) and opportunities (private) for different product types and regions
•
Public investment planning and leadership in collaboration with CTPU, other ministries and stakeholders
•
Private sector investor search and guidance, also in collaboration with CTPU and InvestCyprus
It is suggested to start with one person responsible for each of the 3 tourism types to be launched in 2017. Once launched the team can grow according to the number of new product types launched and the resulting workload. The team leader will report directly to the head of planning/CTPU.
Action 1.2 Staff and prepare the team The 3 initial staff members plus one team assistant can be recruited from inside the former CTO or Ministry as they know perfectly the tourism realities in the different regions of Cyprus. The education and training needs shall be defined according to each personal profile. Knowledge of market trends, investor search and management, planning and development, would be an advantage. In-depth understanding the prioritised tourism types is absolutely crucial, especially through: •
Analysis and visitation of benchmark destinations and products (e.g. visiting Istria and Croatia for their excellent cycling product)
•
Talks with specialist DMCs in other destinations and travel agencies and tour operators in the key source markets to understand the market needs and success factors
Action 1.3 Define critical networks and processes Almost all projects require multi-stakeholder involvement. E.g. establishing new cycling routes requires collaboration from at least the ministries responsible for rural development and for transport. The local communities should be involved, and owners of businesses like accommodation, food, certain shops, gas stations, etc. Finally, investors will have to be attracted in order to improve the value chain. The processes to involve all these stakeholders should be laid out for each type of development. Certain decisions, thus, will have to be taken by the interministerial commission. Investment opportunities will have to be sketched out and prepared in collaboration with the Cyprus Investment Agency’s special tourism unit.
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Also, a knowledge management approach is necessary as lots of specialised know-how will be accumulated, which must be well-structured, easily accessible, and easy to transfer to new staff members.
Work stream 2. Elaborate strategic product portfolio development plan The new tourism types cannot be implemented all at once, a 5-year plan is suggested in order to be able to manage the necessary resources and stakeholders. Starting three tourism types per year is feasible and allows for concentrated planning and development at the same time.
Action 2.1 Prioritise tourism types A first tourism type prioritisation has been elaborated and should be re-confirmed based on further internal in-depth analysis: Top types: •
Sun & Sea
•
Itineraries & Cultural
•
Meetings (Size M and S)
•
Amateur-Pro-Sports
•
Cycling
Further recommendations: •
4th generation resorts
•
Nature
•
Wellness
•
Golf
•
Sailing & Yachting
•
Weddings
•
Short breaks
•
High-end holiday homes
Action 2.2 Plan product type launches A 5-year plan should be developed, defining which 3 product types should be strategically launched/emphasised in which year. We recommend to not necessarily start with the products having received the three highest overall scores in the product ranking exercise, but find a healthy mix taking into account a balance between different destinations, funding needs, ease of implementation, market trend, and differentiation potential. At least one of the product types should be a “safe bet”, allowing for quick wins that can be communicated to the sector in order to build trust and interest in investing in the new product type portfolio. Such a safe bet could be weddings, for example, which at the time being already is a rather well developed product for the British market in Cyprus.
Work stream 3. Start first 3 new product/segment developments in 2017 Product differentiation of Cyprus is key to resolving various of the most crucial issues, such as seasonality, financial performance, market portfolio risk, etc. Therefore, giving high priority to these issues and starting the first three product type developments already in 2017 is highly recommended.
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Action 3.1 Select key product(s) and area(s) to be developed per type After the first 3 product types have been selected for 2017, different project opportunities need to be identified and prioritised. Scanning and visiting all regions for product development potential is the first step when analysing the options. As especially the first projects will be watched closely by the sector and public, the evaluation of the different sites/options should include factors like: •
Prior experience/existing structures related to the product
•
“Star” potential of the product/high attractiveness
•
Existing complementary natural and cultural assets, infra- and superstructures depending on each product type
•
Complexity and volume of investment needs
•
Existence of reliable and capable local partners
Action 3.2 Develop winning business models A range of business models for typical product developments within the respective product type shall be designed. We recommend the use of Osterwalder’s Business Model Canvas as it has proven to be highly practical. The business models sometimes can be used across different product types and should be used specially to guide the private sector. Using again the example of cycling tourism, there could be business models for Agrotourism establishments, Bicycle service providers, or cycling tour operators, for example, with Agrotourism business models also being relevant for other tourism types, e.g. nature tourism. The development of powerful DMCs or product clubs should be stimulated in order to raise synergies and private sector empowerment. A great example to look at is Surfing Euskadi in the Spanish Basque country. The surf product club was started by 40 companies providing products and services to surfers. They joined forces to package product, complement and collaborate each other and market commonly. Check out http://tourism.euskadi.eus/en/surfing-euskadi-search/ for more information.
Action 3.3 Involve key stakeholders in planning and launch For every project, stakeholders should be involved in the following way: •
Other ministries, e.g. transport, agriculture, etc.: create a product type specific interministerial collaboration process next to the general committee, allowing for direct access to key staff in other ministries in addition to the regular general commission meetings.
•
Foreign trade/specialists: after initial consultation regarding product type research, now it is the time again to collect the feedback of selected specialist market partners regarding the product design. Inviting a selection of 5-10 key operators will generate highly useful feedback, and inviting related businesses (coming back to cycling: mountain bike producers, for example) could add value to the final product planning.
•
Investment opportunities should be developed with the help of CTPU and the special tourism unit in the Invest Cyprus Agency to be promoted later on via InvestCyprus.
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•
E.
Local stakeholders like politicians, business people, and other community stakeholders should be invited to workshops in order to have their say, give input and ideas, and be informed about business opportunities.
Main stakeholders and their roles Responsible
National Tourism Authority
Accountable
Consulted
Informed
x
National Tourism Planning unit
x
InvestCyprus
x
Private sector
x
Local communities
F.
281
x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Create Product Development Unit within the NTA
Total (.000 €)
Budget per year 18 19
17
360
144
144
72
-
1.220
174
349
349
349
1.080
360
360
360
-
2.660
678
853
781
349
20
1.1 Define objectives and profile of the new unit 1.2 Staff and prepare the team 1.3 Define processes
critical
networks
and
Work stream 2. Elaborate strategic product portfolio development plan 2.1 Prioritise tourism types 2.2 Plan product type launches Work stream 3. Start first 3 new product / segments developments in 2017 3.1 Select key product(s) and area(s) to be developed per type 3.2 Develop winning business models 3.3 Involve key stakeholders in planning and launch Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 17
18
19
Period 20
••• • •• •• •••• • ••• ••• • • ••
21-25
26-30
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282
Outcome 3. Attract the right amount of vetted investors and MSMEs Strategic objective G. Attract necessary vetted investors
H. Ensure competitive MSMEs grow in Cyprus
Measure
Target
7 Establish Tourinvest Cyprus unit within CIPA • Share of investment needs covered at least two years in advance (starting from 2018)
80%
A highly skilled new tourism unit within CIPA will translate the investment opportunities defined by CTPU into concrete and detailed prospects and attract and professionally support investors. 8 Launch MSME support program
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
Initiatives
Number of new agreements signed/ year
Updated version 23.03.2017
• • •
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.
CYPRUS TOURISM STRATEGY
7
Establish Tourinvest Cyprus Unit within CIPA
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
283
1Y1Q-4Y3Q
Issue(s) to be resolved The Cyprus Investment Promotion Agency (CIPA) established in 2008 and funded by the Cyprus government promotes the country for investment and shall support investors, both from within Cyprus and from abroad. However, developers and operators, local and international, are facing difficulties to access bank loans - due to the high number of existing non-performing loans, new ones are limited and more expensive compared to other countries. As a result, hospitality developers are currently operating in a low (or even zero) profit environment, whereas unregulated hospitality real estate (villas and apartments) are upsetting the balance the tourism accommodation sector, and making investment in hospitality accommodation increasingly marginal. In addition, there currently is no dedicated unit prepared to handle the necessary high number and volumes of tourism investment opportunities coming from the new strategy. Considering the high complexity of the sector and the broad legal and administrative challenges it faces, a specialist unit is missing. In addition, totally new type of investors, also from abroad, must be found and attracted as new products and destinations are being developed.
B.
Initiative summary A dedicated tourism unit within CIPA will be installed, named â&#x20AC;&#x153;TourInvest Cyprusâ&#x20AC;?, a team of sector experts, understanding well the new strategy, the different type of required investments, and specific challenges for investors related to the high complexity of the tourism sector. Attraction and support schemes will be developed, managed, and communicated to carefully selected groups of potential investors. The investment unit will become a real facilitator, pragmatically helping investors to overcome legal, regulatory, administrative, and other hurdles. As a special action, Tourism Zones of National Interest will be declared and marketed.
C.
Key benefits of a successful initiative implementation The overarching benefits of the initiative will come from a proactive work to attract vetted investments for tourism development, and to assist in investment search for high value and strategic projects aligned with the Cyprus Tourism Strategy tourism products. The initiative will streamline project approvals and increase the sectorâ&#x20AC;&#x2122;s attractiveness for the right mix of investors. Cyprus will become a highly attractive place for international tourism investors, driven not only by attractive schemes, but also by clearly laid out investment
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opportunities, excellent legal, administrative, and other support services, great matchmaking with relevant partners and high acceptance of projects by banks.
D.
Action plan Work stream 1. Activate the Tourinvest Cyprus Unit within CIPA The Cyprus Tourism Strategy outlines the investment needs, gaps, and priorities of tourism products to be developed. To achieve the 2030 vision, high quality tourism products, competitive business models, and Tourism Zones of National Interest are planned for development. The National Tourism Authority and the Cyprus Investment Promotion Agency are expected to take a leading role in this aspect.
Action 1.1 Create the Tourinvest Cyprus special unit in CIPA A dedicated Tourism Investment Special Unit is proven to be a key partner for investors to successfully stimulate, capture and support investment through user-friendly procedures and high level technical advice. A newly created “Tourinvest Cyprus” division should embrace all the different strategic tourism business models that are proposed to be developed in Cyprus (i.e. Itineraries & Culture, Nautical & Rural, Sports, Adventure, Wellness & Medical etc.) and also elaborate and secure the execution of the first Tourism Zone of National Interest project.
Action 1.2 Recruit extremely competent staff for Tourinvest Cyprus Investment Promotion Agency organisation has already an appointed Officer for Health & Wellness tourism, its transitioning to embrace other tourism products is key in the strategy implementation phase. It is a good idea to have specific people for each product type, as for example Wellness requires a totally different type of investments and investors than Nature tourism, for example. It is of utmost importance to staff the unit with senior professionals that are highly knowledgeable and experienced in tourism investment processes in order to allow for client advice on eye level. Big international investors expect that and would find dealing with people with lower levels of expertise than themselves discouraging.
Action 1.3 Establish tourism as a priority sector in Cyprus’ investment attraction approach Developing and implementing a comprehensive, forward-thinking tourism investment attraction strategy is the first step in formalising tourism as a key component of Cyprus Investment Promotion Agency. Cyprus Investment Promotion Agency’s strategic plan needs to be reviewed and updated in order to incorporate the objectives of the Cyprus Tourism Strategy, specifically those that are related to spatial planning and new developments to accommodate projected demand, but also the attractions and experiential system to support tourism products. With this in mind, it is envisioned to turn tourism into Cyprus’ biggest contributor to GDP by 2025. This leading role of the sector must be reflected in all the international communication by CIPA.
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Action 1.4 Design the framework to promote public/private partnerships Government backing and public/private partnerships, especially on large scale projects is essential for timely approvals and provision of utilities. As investors look to engage with the government and local communities to ensure proposals are welcomed and have more chances to succeed, a competitive framework needs to be designed. Additional efforts should be made to prepare preliminary due-diligence reports and to make it easier to adapt permits for the potential opportunities and qualified investors. It is very useful to take a look at the handling of investment promotion in other Mediterranean countries. A very helpful paper exists, comparing the different approaches, and it can be found here: hrcak.srce.hr/file/103306
Work stream 2. Build trust among Cypriot and international investors Building trust with investors will give Cyprus greater access to key decision-makers and put the country in a prominent position within tourism destinations/projects seeking funding. This requires a proactive approach and the ability to provide informed data, host investor briefings and maintain an updated portfolio of investor-ready tourism projects.
Action 2.1 Define tourism business funding strategies Investment projects have to be evaluated and prioritised to be able to structure proposals. The set of criteria (and weighting of each) used to evaluate the projects has to be defined taking into account factors like •
Strategic relevance
•
Complexity of the operation
•
Required funds
•
Expected profitability
•
Complexity of stakeholder involvement
Once project opportunities have been prioritised, a consistent approach needs to be followed. Of utmost importance is to ensure that the information from the projects is reliable, their financial model is strong and the capacity to deliver value is competitive and aligned with the strategy. If the criteria are met and the project receives a positive scoring, the Tourinvest Cyprus will include it in the projects portfolio and actively help in pitching it to investors. Additionally, the evaluation criteria should also focus on prioritising investors seeking to establish businesses in the mountains and inland regions. These tourism development concepts can be promoted for consideration by potential smaller investors, particularly to address product and service gaps in underdeveloped clusters. Investment volume is sometimes contradictory to strategic relevance; focussing only on big scale investments is strongly discouraged.
Action 2.2 Build, grow and manage a portfolio of potential investors The “Tourinvest Cyprus” special unit has to acquire and maintain updated a detailed knowledge of the investment strategies of existing and potential major investor groups, ideally from different geographical locations, but especially with diversified interests (i.e. marinas, golfs, shopping centres, attractions, etc.). To be able to monitor investors interests but also to
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monitor valuable projects in Cyprus, all the interactions should be recorded on a Customer Relationship Management platform, which should be combined with supporting systems that identify emerging trends and potential synergies. Acquiring and exploiting industry intelligence is always welcomed by investors and developers, and increases effectiveness to secure financing when providing the right opportunity to the right investor. Frequent but relevant emailing of opportunities and news is important and must be managed in a careful and targeted way. Investors should be able to choose what type of information to receive at which stages and frequencies.
Action 2.3 Organise regular site inspections and meetings A good knowledge of the market trends and the investors interests is acquired from regularly meeting investors and key private sector stakeholders. A well-managed calendar of events, investment opportunities presentations, and international missions can provide valuable information allowing to challenge potential barriers for investments, but also to ensure that a competitive enabling environment for tourism investment is fostered. Well-managed site inspections allowing for meetings with the government will contribute to enhance collaboration with the government, local partners, and investors. Those should be complemented by video tours and web conferences in order to allow a larger group of relevant investors to be informed.
Work stream 3. Develop an attractive portfolio of investment opportunities Cyprus is a safe country for investment and many challenging projects are currently in the pipelines at Cyprus Investment Promotion Agency (CIPA). Investors require certainty that the projects proposed are competitive in the tourism sector, but especially that they are profitable. An excellent investment dossier carefully prepared for each project is the key to provide a clear vision and solve any arising doubts.
Action 3.1 Create a highly attractive and user-friendly “Project Bank” To help investors understand why they should consider investing in Cyprus tourism sector, a centralised “Project Bank” available on-line with good support material (i.e. videos, pictures, plans, surrounding areas, etc.) and an adequate communication strategy need to be developed. The competitive tourism value proposition that clearly articulates Cyprus strategic advantages and products require attractive supporting materials to be used for tourism investment leads generation and sales activities. “Tourinvest Cyprus” should proactively track on-going projects in the different Tourism Development Master Plans in the 12 areas identified within the Cyprus Tourism strategy and keep an updated dossier for investment opportunities (including the Master Plan, the products to develop and its contribution to the strategy, and its financial feasibility). This can be developed into a great competitive advantage as the availability of attractive investment opportunity banks in competing destinations is near zero.
Action 3.2 Lead the first Tourism Zone of National Interest Master Plan elaboration Tourism Zones of National Interest (TZNIs) are large areas (200 – 2.000 hectares) comprising various resorts that share key infrastructure and equipment (access roads, main power, water, and communications supply). These areas form tourism destinations in themselves and usually
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have more than 6.000 keys. Investors benefit from great synergies, extremely professional services, high quality partners, and preferred investment schemes. New mixed-use resorts should ideally be within existing clusters or part of a new tourism zone of national interest (TZNI) and “Tourinvest Cyprus” should take a key role in the elaboration of the first plan and the development of the documentation available for investors comprising its characteristics, profitability, and investment opportunities.
Action 3.3 Launch international public bids to finance relevant projects In order to ensure a continuous flow of international investment in Cyprus, and to secure the implementation, the “Tourinvest Cyprus” unit should regularly select key projects to call for investors internationally. Those should be published in official investment opportunity banks, but above all communicated via CIPA’s own CRM and other channels.
Work stream 4. Streamline investment procedures in Cyprus In a global economy, international investors have a wide range of opportunities to invest. In order to stand out, to invest in Cyprus has to become a smart decision, attractive projects need to be supported by efficient procedures with little burocratic barriers, and rigid regulations, supported by a comprehensive tourism law. Here, Cyprus probably faces the biggest challenge to this initiative, as the length of legal and administrative processes is considered one of the worst in the entire world, according to the ranking within the WEF T&T Competitiveness Report 2015 (Ranked 141 among 141 countries). This problem should be resolved simply by following this initiative, but “Tourinvest Cyprus” must put great emphasis on streamlining and supporting this kind of processes for the supported projects.
Action 4.1 Offer reliable international legal, financial and transaction advice The “Tourinvest Cyprus” unit may have a portfolio of additional services and fees for both investors and developers, provided from their in-house team of international and local highly qualified legal, technical, financial experts and transactions advisors. The services on offer could include support in preparing RFPs, evaluating offers, managing due-diligence and constructions permits, negotiating, and closing development agreements and public private partnerships with international investors.
Action 4.2 Promote the usage of the Point of Single Contact (PSC) for administrative communication The PSC as a One-Stop shop facilitates the interaction between the investors and the administration, making it more efficient and effective. In order to effectively and efficiently deploy the additional resources available for investors, the portfolio of services oriented to the tourism and leisure segment - where several typologies of business to establish are available -should be extended to include additional tourism products such as the operation of the experiences outlined in the Cyprus Tourism Strategy.
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E.
Main stakeholders and their roles Responsible
National Tourism Authority
X
Cyprus Investment Promotion Agency
X
Accountable
Consulted
Informed
X
Department of Lands and Surveys
F.
288
X
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Activate the Tourinvest Cyprus Unit within CIPA
Total (.000 €)
Budget per year 18 19
17
370
164
164
41
-
H
1.900
238
950
713
-
M H
1.045
-
380
380
285
H M
1.170
-
260
520
390
M H
4.485
402
1.754
1.654
675
20
17
H
1.1 Create the Tourinvest Cyprus special unit in CIPA 1.2 Recruit extremely competent staff for Tourinvest 1.3 Establish tourism as a priority sector in Cyprus’ investment attraction approach 1.4 Design the framework to promote public/private partnerships Work stream 2. Build trust among Cypriot and international investors 2.1 Define strategies
tourism
business
funding
2.2 Build, grow and manage a portfolio of potential investors 2.3 Organise regular site inspections and meetings Work stream 3. Develop an attractive portfolio of investment opportunities 3.1 Create a highly attractive and userfriendly “Project Bank” 3.2 Lead the first Tourism Zone of National Interest Master Plan elaboration 3.3 Launch international public bids to finance relevant projects Work stream 4. Streamline investment procedures in Cyprus 4.1 Offer reliable international legal, financial and transaction advice 4.2 Promote the usage of the Point of Single Contact (PSC) for administrative communication Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 18
19
Period 20
21-25
26-30
••• • • • •• •••• • • • ••• •• • • ••• •• ••• • ••• •• ••
CYPRUS TOURISM STRATEGY
8
Launch a MSME support programme
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
289
1Y2Q-3Y1Q
Issue(s) to be resolved Cyprus’ economy is dominated by small enterprises, with over 60.000 SMEs (95% of which employing less than 10 persons) accounting for more than 80% of the nation’s jobs. Entrepreneurship is essential for the successful implementation of the Cyprus Tourism Strategy, stimulating innovation and providing high quality and authentic tourism experiences, products, and services. The new strategic focus on experiential tourism and Special Interest markets requires a competent and innovative MSME landscape, but currently companies are not familiar with the new tourism types, changing quality approaches (labels) and the required shift to innovative services and experiences. A much needed support system is not in place in Cyprus.
B.
Initiative summary The overarching objective of the initiative is to encourage and support entrepreneurship in Cyprus’ tourism sector. To do so, the National Tourism Authority will develop a complete portfolio of tourism-related business opportunities to set up by 2030, with clearly outlined business concepts. Efforts will be focused on raising awareness of the identified tourism opportunities among potential entrepreneurs (with a special focus on women and students), and support them to successfully set up their own business or join other tourism MSMEs. The initiative will also seek to connect local entrepreneurs with other national and international businesses: fostering shared best practice, strategic alliances, and/or joint ventures. This will be achieved through two dedicated Work Stream that should be set up:
C.
•
Creating a MSME support centre with two big tasks: selecting, outlining, and promoting tourism-related business opportunities and technically supporting tourism MSMEs across Cyprus in a highly pragmatic manner.
•
Developing a programme to stimulate entrepreneurship and a tourism start-up culture currently missing in Cyprus. Support entrepreneurs, by giving broad and individual advice during the early stages, assessing and helping with funding opportunities and promoting best practice exchanges, joint ventures, and alliances.
Key benefits of a successful initiative implementation MSMEs and innovative start-ups in Cyprus will contribute significantly to increasing and diversifying the tourism offer according to the new strategy, generating income from tourism also in rural regions and low seasons, and creating new services and products. They will receive the necessary technical and financial support in order to innovate, raise the overall quality of services and products, and the experiential level of traveling in Cyprus. The overall Updated version 23.03.2017
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profitability of the sector will raise thanks to improved know-how, innovative products, access to funding, and swift legal and administrative processes. This way MSMEs will grow, new companies started, and jobs created.
D.
Action plan Work stream 1. Create a MSME support service The tourism sector will generate many potential opportunities to be developed by 2030 as a result of the Cyprus Tourism Strategy. The National Tourism Authority will be engaged into preparing and supporting Cypriot MSMEs in a structured and pragmatic way so they can successfully take advantage of those opportunities and master the related challenges.
Action 1.1 Identify business opportunities for tourism MSMEs The Cyprus Tourism Strategy will generate business opportunities for MSMEs to support the new accommodation units, as well as to develop new tourism products, services, attractions, and experiences. To ensure that by 2030 the MSMEs are properly covering the requirements of the strategy, the National Tourism Authority has to review all potential business opportunities to be set up, and develop supporting procedures and market knowledge (including market structures, investment need, degree of competition in the field, legal environment, key sources of finance, etc.) To illustrate, tourism MSMEs will cover a broad range of fields: •
Destination management companies
•
Conference and event organising companies
•
Translation companies,
•
Web experts,
•
Travel agencies,
•
Specialised lawyers,
•
Small car rental companies,
•
Special interest tourism companies (for example hot air balloon, mountain biking),
•
Beach equipment rental,
•
Small accommodation operations,
•
Camp sites,
•
Restaurants,
•
Wine tasting and other catering outlets,
•
Activities and excursions organisers,
•
Taxis,
•
Recreational boat operators,
•
Souvenir shops,
•
Souvenir manufacturers,
•
Cleaning services,
•
Repair and maintenance services,
•
Travel writers
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The elaboration and publication of investment opportunities should be driven by “Tourinvest Cyprus” and be made widely available online, and be supported by a communication campaign involving local and social media, chambers of commerce, local authorities, universities, associations, etc.
Action 1.2 Identify and develop technical assistance for entrepreneurs The National Tourism Authority, together with the support of the Chamber of Commerce, should review and evaluate the complexity of the legal and administrative, but above all business procedures to establish and run the different types of tourism businesses, and set up a system to provide technical assistance. MSMEs will need know-how related to: •
New products & services
•
Quality management and labels
•
Experiences and innovation
•
Markets, marketing, branding, and sales
•
Management and leadership
•
Financing and cost management
•
Business planning and development
•
Etc.
Entrepreneurs would be interested in using advisors but they would be equally interested in simply looking up information or applying simple tools. The Vice Ministry should allocate a special budget to partially/totally contribute to the advisors’ costs, but most of the services should be online (see action 1.3.). It is key that all information, data, and tools are extremely practical and user friendly, otherwise they will not be used, understood, and will create no value.
Action 1.3 Create the support platform & service system To ensure an easy access to all components of the MSME support, the Vice Ministry will develop an online platform where tourism and related enterprises will be able to find wellstructured, highly pragmatic content helping them to become more competitive and successful in what they do. The platform will include tools, methods, technologies, best practice, and case studies in all major business disciplines. It will feature a great collection of market intelligence and trend studies in order to further improve customer value creation. In Queensland, Australia, where tourism is also very important for the local economy, MSMEs benefit from a great systematic support approach covering many areas of business (not only helping tourism businesses): https://www.business.qld.gov.au/business Another great example is https://visitBritain.org, which is more focussed on market and marketing intelligence, and is also relevant for larger companies. All information is very user-friendly, pragmatic, and self-explanatory. Spain also has rich information systems, but it is more data driven, and less pragmatic and intelligence driven. In addition to the mentioned content, webinars could be made available, and it is recommended to set up a forum where entrepreneur can exchange ideas and help each other.
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The aim is a one-stop-shop, where all relevant data, information, and tools for MSMEs are bundled in one place. Offline services like paid trainings, workshops and events round up the offer. To create maximum awareness among business owners, it is of great importance to frequently mention the platform in the news and at trade events.
Action 1.4 Facilitate networking between entrepreneurs and potential business partners Establish a programme for facilitating the exchange of knowledge and the setting-up of joint ventures and alliances with national and international businesses. The aim of the programme will be to provide on-going mentoring, assistance with domestic or overseas partner search and matching and related legal assistance. The key activities of the programme should be: •
Assistance with business partner search
•
Legal advisory related to joint ventures and international cooperation
•
Organisation of targeted international trade missions for partner search
Work stream 2. Develop a special start-up and entrepreneurship programme The National Tourism Authority should integrate the stimulation of economy and job growth with the promotion and support of entrepreneurship in its tourism policy. Entrepreneurship, especially among women and young people, must be strongly encouraged and guided in Cyprus. Many new services, innovations, experiences, small local and authentic services, and products will be needed and the necessary entrepreneurship/start-up culture is currently nonexistent in Cyprus.
Action 2.1 Plan events to promote entrepreneurship The National Tourism Authority has to plan and/or sponsor activities and events in universities and with local communities, presenting the broad array of business opportunities, support programmes and expected benefits. A new start-up culture in the tourism arena must be the objective. Existing start-ups should join those events in order to share their success stories but also to talk about challenges and lessons learned. A city that has created a very strong start-up culture is Tel Aviv, in Israel: https://www.telaviv.gov.il/en/WorkAndStudy/Pages/StartupCity.aspx. Tourism is at the heart of the whole economy and it benefits from special programmes linked to digital tourism. In Cyprus’ case, we also need these type of companies, start-ups must also evolve in the digital, but even more in the “real” world.
Action 2.2 Set-up Tourism Business Incubators Promote the creation of Business Incubation Centres. Within such centres, entrepreneurs can initiate their activity in a “safe” environment with easy access to advisory services, other startups and entrepreneurs and other interesting stakeholders. The interaction with MSMEs located in the same premises will contribute to enhance collaborations, reinforce competitiveness, and strengthen the tourism network.
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An accelerator programme should be designed and funded by the Vice Ministry in order to push the best ideas and business models forward. Iceland has created a great programme in this direction, it is called â&#x20AC;&#x153;Start Up Tourismâ&#x20AC;? and can be found at http://startuptourism.is/ .
Action 2.3 Facilitate interaction between entrepreneurs and investors Private investment should be one of the facilitators to make new companies emerge in the country. To encourage private investors to finance entrepreneurship projects, the National Tourism Authority should create professional / private networks to invest in tourism-related MSMEs (e.g. Business Angel Networks, Venture Capital networks, etc.); and create mechanisms to provide financial support to private investors, either through preferential financing granting tax incentives to invest in start-up companies, or by contributing the costs of the advisory services used.
Action 2.4 Promote foundation of Tourism Start-up Association As important as fostering collaboration with both international and national business partners (see Action 1.4) is the exchange among start-ups/entrepreneurs themselves. The Vice Ministry should promote the idea of a Tourism Start-up Association, stimulating partnerships, mutual support, lobbying, synergies and promotion, by creating a dynamic community and organizing fundraising and other events. A good example of this is the Italian association, at http://www.startup-turismo.it/en/.
E.
Main stakeholders and their roles Responsible
National Tourism Authority
Accountable
Consulted
Informed
X
Bank of Cyprus
X
Cyprus Chamber of Commerce and Industry
X
Local entrepreneurs
X
X
X
Investors and potential business partners
X
X
X
Local media partners
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Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Create a MSME support service
Total (.000 €)
Budget per year 18 19
17
1.050
450
600
-
-
H
3.450
986
1.971
493
-
H M
4.500
1.436
2.571
493
-
20
17
H
1.1 Identify business opportunities for tourism MSMEs 1.2 Identify and develop assistance for entrepreneurs
technical
1.3 Create the support platform & service system 1.4 Facilitate networking between entrepreneurs and potential business partners Work stream 2. Develop a special startup and entrepreneurship programme 2.1 Plan events entrepreneurship
to
promote
2.2 Set-up Tourism Business Incubators 2.3 Facilitate interaction entrepreneurs and investors
between
2.4 Promote foundation of Tourism Startup Association
Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 18 19
•• • • • • ••• • •• •• •
20
Period 21-25 26-30
CYPRUS TOURISM STRATEGY
9
Start Market partnering initiative
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
295
1Y1Q-4Y1Q
Issue(s) to be resolved CTO is already working well together with a series of tour operators, with some marketing alliances providing positive results. Yet, there is no strategic approach guiding and prioritising geo-markets, type of trade, media, and other partners. Furthermore, marketing alliances too often suffer from highly complex and bureaucratic approbation processes and sometimes from a lack of understanding regarding the latest digital marketing mechanisms.
B.
Initiative summary In the future, the market partner portfolio will be broadened and differentiated. As we enter new key source markets and product types, new partners are needed. In a careful research process, the preferred partners per market and per product type will be identified and approached in a structured and pro-active manner. The offices abroad will play a key role as business developers, guided and complemented by a small but efficient central market partnering unit in Nicosia. The new approach will not be limited to general tour operators, but will focus on Special Interest tour operators, as well as selected travel agencies, OTAs, media partners, agencies, bloggers, etc. On the other hand, auditing the marketing alliance process is a serious problem that prevents good levels of cooperation with commercial partners and adequate leverage ratios in cooperation and sponsoring actions. The role of internal auditing will be completely revised as it has been named as a huge hurdle in contract handling.
C.
Key benefits of a successful initiative implementation The market partnering strategy will be aligned to the product development strategy, so that particularly the new Special Interest projects will be able to achieve the target volumes. The frequent exchange with partners is extremely useful for improving the customer value proposition based on the partnerâ&#x20AC;&#x2122;s in-depth consumer understanding. Furthermore, the trade partner approach is in conjunction with the airline partnering approach (see respective initiative), enabling the establishment of new airline routes and capacities. Finally, the marketing alliances will support the new brand positioning of a more diverse destination Cyprus.
D.
Action plan Work stream 1. Activate new Central Market Partnering Unit within NTA The new role of the central market partnering unit is significantly more pro-active than the current CTO department. It will no longer just manage and renew existing partnerships and Updated version 23.03.2017
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react to approaches of tour operators, but will detect, select, and win those partners needed to be successful in new geo-markets and product types in a structured, pro-active way. It will also guide and support the offices abroad in their local approaches to be true business developers in the future.
Action 1.1 Establish role of Market Partnering team The key functions of the new market partnering team are as follows: •
Lead the evolution of the offices abroad into business development centres with the help of transition plans, trainings, tools, and ad-hoc support
•
Guide the office abroad research for potential preferred market partners
•
Plan and prepare the pitches to trade and tour operators
•
Lead negotiations and partnerships with selected key tour operators and PR agencies
•
Plan a series of market (together with offices abroad) and destination events for market partners
It is recommended to research other leading organisations and their business development activities. An interesting benchmark, for example, is the 2B marketing of the Ministry of Tourism of Israel (www.goisrael.com), known to proactively work the tour operator and travel agent market in their key markets of origin. A consultant should be hired to support this approach.
Action 1.2 Staff and prepare a team A team of two very engaged, highly pro-active pragmatic and business-minded people should be sufficient to lead the Market Partnering activities, since increasing share of the workload will end-up in the offices abroad as processes become more standardised. The team members should be willing to travel frequently to the source markets. It is recommended to give the team a period of 3 months to elaborate a Market Partnering strategy based on the role as described in Action 1.1. The strategy should be approved by the Vice Minister and put into action. The help of an international consultant with a good overview of other international approaches is recommended.
Action 1.3 Revise contractual central partnership processes One critical key element is the marketing alliance processes. They need to be totally revised as the currently highly bureaucratic handling and sometimes inadequate micro-managing measures are a huge obstacle to winning new and keeping existing partners. It is highly recommended to standardise the documents and processes and put contracts and procedures online for everyone to see. GoIsrael is a good example for the latter: http://www.goisrael.com/Tourism_Eng/Pages/Charter-flight-agreements.aspx The role of internal auditing should be completely revised. Our recommendations in this area are as follows: •
Firstly, the Government should review the current mechanisms and processes to make them much simpler, more logical, and agile. We suggest that the Government of Cyprus contact the Directorate General of Turespaña and formally request information on how this is managed in Spain, especially the agreements with tour operators and other types of business partners.
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Secondly, we suggest establishing a very clear policy (with well-defined criteria) on alliances and how to process them. Here we suggest to focus almost exclusively on alliances that have the following characteristics: - Wise Marketing. That they make complete sense within the Cyprus Marketing Plan in the issuing market in question. Often the objectives of the Partner and those of Cyprus will not be sufficiently aligned and this should be avoided. - Cost-benefit. That the alliance be based on a program of actions very well specified and accompanied by a rigorous cost-benefit analysis. The most important components of the program must be accompanied by 3 budgets and Cyprus should have the right to seek budgets on its own for comparative purposes. Cyprus should not negotiate alliances in which the target, the objective of the action, the number of useful impacts, the expected result, etc. are not clear. - Soft Money. That the contribution of Cyprus be, as far as possible, in the form of "soft" money (services, products, human capital, etc.). i.e. if an advertising campaign has to be co-financed, Cyprus must negotiate and pay the agency directly for its part, unless there is evidence that the conditions obtained by the partner are optimal from the point of view of price / quality / quantity. - A year earlier. Alliances for the 2018 summer season (as an example) must be proposed before the month of April 2017 when the Cyprus Marketing Plan for each issuing market must also be proposed (which will be formally accepted in May'17). This will allow the NTA to choose alliances that make complete sense within the general marketing framework of the Destination and to develop the plan and budget of alliances for 2018. - One shot. Once the alliance plan is approved, alliances will be signed and a sample of 10% of them will be audited. - External audit. The NTA may consider having alliances audited (Pre and Post) by reputed international auditors. Subsequent internal audit can be much faster and selected from 10% of alliances.
Work stream 2. Activate the NTA offices abroad From a mixed B2B2C approach, the offices abroad will become pure business development centres, with all their activities targeted towards trade and media. This step comes at the right time as nowadays around 80% of tourists in most of Cyprus key markets look up destination info online. Cyprus is in dire need of winning new trade partners, particularly in the Special Interest segments, in both existing and new geo-markets. The only major complementary task for the offices abroad is the structured generation of market intelligence.
Action 2.1 Fix new strategy for offices abroad A core part of the strategy to be developed by the new Market Partnering team in collaboration with the consulting team will be about the new role of the offices abroad. Among others, the following topics will be core and should be a part of the briefing: •
Office network alignment with market strategy
•
Ongoing, structured market research in collaboration with local industry and feeding of the info into the central market intelligence platform
•
Logistics and participation in negotiations of central Market Partnering unit with key tour operators and airlines
•
Own development and negotiation of smaller strategic partnerships, with additional tour operators, travel agency chains, OTAs, complementing the major agreements. As a
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guideline, tour operator deals should be led by the central MPU, agreements with strategic travel agencies could be led by the offices abroad •
Networking, information, and training events directed towards the trade, but also to journalists, bloggers, social media, etc. in collaboration with PR agency
Action 2.2 Kick-off “GoBiz” transformation and training programme for offices abroad The Market Partnering team in collaboration with the chosen consultant should develop a transformation and training programme for the “new” offices abroad. The core contents of that programme should be the following: Education: •
Market research and intelligence techniques and standards (for example, benchmarks for market reports to be used by the Ministry and Vice Ministry, but above all by the private sector can be found at www.visitbritain.org/markets)
•
Strategy: it is recommended to invite all abroad market representatives to a 3-day strategy workshop in Nicosia in order to understand the new strategy and its consequences for their work
Trainings: •
Presentation and negotiation techniques, etc.
Transformation: •
Change management should accompany the process as the new organisational focus requires a tremendous change in behaviour and mentality, difficult to achieve without proper professional transformation support
It is recommended to invite all market representatives to Cyprus for a week to kick-off the new organisation focus and prepare the teams for the upcoming reengineering.
Work stream 3. Approach strategic partners The identified preferred partner targets will be researched in-depth before approaching them, to understand their most obvious needs and wants and identify levers for the negotiation processes. When contacting market partners, especially those from trade, all material will have been carefully prepared and the approach will follow a structured, proven process.
Action 3.1 Research markets and segments to identify preferred partners For each new strategic product type, we will need to analyse the potential per geo-market as they will vary significantly. We will need to put more emphasis on cultural travel tour operators in France than in the UK or Russia, for example. The IPK World Travel Monitor (http://www.ipkinternational.com/en/home/)is probably the best international source of information on the popularity of the different strategic product types in the key markets of Cyprus. A first estimate has been included in this strategy, but trends should be closely monitored over time. The offices abroad then should identify the leading tour operators for each market/product type and prioritise them according to a series of criteria: •
Former experience with Cyprus/core product fit
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•
Volume
•
Price/customer segment
•
Destination portfolio fit
•
Customer reviews online
299
A prioritised list of at least 15 to 20 trade partners per product should be the result of this action. Trade partners include general and special interest tour operators, selected travel agencies and agency chains, and OTAs.
Action 3.2 Prepare trade pitch approaches Each trade partner should be approached with an individual pitch. Therefore, the objective of the partnership must be clearly decided: some partnerships may be focussed on volume, others on seasonality or prestige. The Market Partnering team will provide for: •
A step-by-step sales pitch guide
•
A lean and simple CRM system used for managing the business development progress
•
Presentation and contract templates
Especially in the beginning, the Market Partnering team will lead the pitches, but more and more the offices abroad will take over, especially with travel agencies and existing partners.
Action 3.3 Establish promotion partnerships Each market will collaborate with one specialised PR agency office (which could be all part of the same global group or not), which will be guided and managed by the central Market Partnering team with the support of the abroad office. It will be ensured that the PR agency is working with mass, travel, and special interest media, both B2B and B2C, freelance journalists, and selected bloggers and vloggers. The Market Partnering team will provide for attractive and up-to-date content (info, stories, interviews, high quality multimedia, etc.) aligned to the core strategy and to the type of market partner.
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E.
Main stakeholders and their roles Responsible
National Tourism Authority Local private sector Abroad offices
Accountable
Consulted
Informed
x x x
New air traffic development unit
F.
300
x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Activate new central Market Partnering Unit within NTA
Total (.000 €)
Budget per year 18 19
17
870
580
290
-
-
H M
1.010
337
673
-
-
H M
2.330
-
1.036
1.036
259
M M
4.210
917
1.999
1.036
259
20
17
1.1 Establish role of Market Partnering team 1.2 Staff and prepare a team 1.3 Revise contractual partnership processes
central
Work stream 2. Activate the NTA offices abroad 2.1 Fix new strategy for abroad offices 2.2 Kick-off “GoBiz” transformation and training programme for offices abroad Work stream 3. Approach strategic partners 3.1 Research markets and segments to identify preferred partners 3.2 Prepare trade pitch approaches 3.3 Establish promotion partnerships Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 18
19
•• • • • •• • •• ••• • • ••
Period 20
21-25
26-30
CYPRUS TOURISM STRATEGY
Outcome 4. Conquer more and better yielding customers Strategic objective J. Develop a powerful tourism brand
Measure
Target
10 A new brand management system Bi-annual Brand Power measurement
•
Yearly increase of 2 to10% (depending of the source market) for the next five years
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
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
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.
301
CYPRUS TOURISM STRATEGY
10
Set up new brand management system
302
Priority Start-final deadline
Initiative Owner: National Tourism Authority
1Y1Q-4Y3Q
Important note: THR has developed a Separate Action Plan for Cyprus Brand, with more detailed content and examples regarding this initiative and its work streams. Please refer to Chapter 10, Plan D.
A.
Issue(s) to be resolved The results of the Brand Adoption Process research specially conducted as part of the preparation of the Tourism Strategy, reveal that the main gap in Cyprus is the lack of knowledge and understanding of what the country has to offer to tourists. Research has also shown that the few ideas associated with Cyprus are rather negative: 34% think of Cyprus as an insecure and unstable region, and 41% aren’t aware that the country is a member of the European Union and the Eurozone. The strategic objective of this separate action plan is to develop a powerful tourism brand aimed at significantly improve the destination brand equity among targeted source markets, trade businesses and traveller segments.
B.
Initiative summary This initiative aims at strongly improve the power of the Cyprus brand by increasing both its “strength” and “stature”. A different brand story will be developed and promoted to reposition the tourism offer of Cyprus as a stronger, richer, and diversified product beyond the current “Sun & Sea” destination image. A differentiated brand will inspire consumers to choose the island as their holiday destination. The brand will transmit the benefits and uniqueness of a holiday experience in Cyprus and will ensure it stands out against the competitor’s destination images.
C.
Key benefits of a successful initiative implementation Cyprus will have a strategy-backed new brand baseline and visual that will convey the desired images and perceptions agreed upon by all stakeholders. Likewise, the tourism sector in Cyprus will have clear guidelines and recommendations to communicate its new brand, ensuring alignment with the National Tourism Strategy.
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D.
303
Action plan Work stream 1. Implement the branding system Action 1.1 Achieve a general agreement on the proposed brand identity and its positioning The new National Tourism Authority Marketing Department will organise an internal meeting to discuss and reach an agreement regarding the proposed Cyprus brand identity and positioning. The proposed brand identity prism is explained in the separate action plan. A new brand positioning has been developed that can be summarised as follows: A destination recognised for the best weather of Europe in a sparkling island, where the warmth is not only found in its weather, but also in its kind-hearted people and its atmosphere. A short survey will be carried out to test the proposed brand identity among the industry’s key actors, partners, and consumers (tour operators, travel agents, media, and a representative group of consumers) both in Cyprus and abroad. The results will be transmitted to the target markets through the ‘Big idea’ (explained later) that will be the axis of the Integrated 360º Brand Communication strategy conceived to change the image of the Cyprus brand.
Action 1.2 Approve a tourism brand architecture encompassing product and regional brands and labels It is recommended to adopt a top-down structure that unfolds from the Cyprus’ National Tourism Brand as the master/umbrella brand. Thus, the national brand will encompass a variety of sub-brands including territorial brands and product/commercial brands. The new National Tourism Authority should collaborate with the Cyprus’ regional tourism offices in order to ensure alignment of the regional brands and communication strategies with the National Tourism Brand and its strategy. Technical assistance should be provided to support the regional offices in this process.
Work stream 2. Align the new tourist brand with the Strategy A new brand visual and baseline will be developed with the help of an external agency, taking into account the results obtained from the research of the Brand Adoption Process and power of the “Cyprus” brand, as well as interviews with key stakeholders.
Action 2.1 Commission and implement Cyprus’ ‘Big idea’ The ‘Big Idea’ will be the “umbrella” message throughout the 360º brand communication system and will be developed with the support of a specialised advertising agency. The ‘Big idea’ must convey the single most important message about Cyprus, the one that can influence the consumer to visit the country and will be at the core of all advertising and communication campaigns. Examples of Big Ideas in tourism are: I heart NY, Passion for Life (Spain) and 100% Pure (New Zealand).
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Action 2.2 Commission the design of the new brand visual and baseline The National Tourism Authority will entrust the design of the new brand visual and baseline to an international branding agency like Interbrand, Saffron, Siegel + Gale; or to a reputed local graphic artist.
Action 2.3 Test the proposals of baseline / brand visual and get the official approval Based on an internal discussion, out of the 5 proposals of baseline/brand visual to be submitted by the awarded company, 3 will be selected to be tested before the final decision is made. Basic criteria for the selection should be: simplicity, memorability, and aesthetics.
Work stream 3. Develop an integrated 360º brand communication system Action 3.1 Implement a strong launch for the new brand The new NTA will organise a public event to present the new brand to the national tourism industry, and relevant public organisations. Additionally, press releases and social media postings will be used to present the new brand to the travel trade and the potential tourists in the target markets. Additionally, produce a Cyprus’ Tourism Brand Handbook, aimed at providing clear guidelines for the consistent use of the new national tourism brand by different teams (NTA, regional offices, private sector, travel trade, outsourced advertising agencies and designers, etc.) in a variety of supported platforms. It will be designed for digital distribution, although in the launching phase it will be useful to print some copies of a summary to be distributed to tourism stakeholders in Cyprus and to the travel trade and media (workshops, trade shows, etc.).
Action 3.2 Launch a Media Relations Special Programme A Special Media Relations Programme will define tools and tactics aimed at stimulating the interest to travel to Cyprus through the publication of articles in online and off-line media. It will include publishing inspirational content in printed media and working with specialised media and bloggers. Fostering user generated content in online channels will be an efficient way to get additional world coverage. Additionally, public relations activities targeting the tourism industry and the general population in Cyprus should be organised to improve awareness and build support for the tourism sector.
Action 3.3 Develop “Branded content” The NTA will coordinate the production of branded content aligned with the strategic priorities adapted to different media channels (written content, photos, video) and end-users (mass media, specialised media, travel media, bloggers, instagramers, travel trade, etc.). Considering that consumers’ attention is changing and online media are getting more visual than ever, to raise the interest of media, the trade, and consumers, Cyprus will need a good set of pictures of the highest quality. Thus, an image bank will be set up to be enriched every year with new images. Videos are getting very popular in online channels and good quality short themed videos should also be produced each year (as part of the Big Idea campaign, targeting specific segments and/or to promote specific products).
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Action 3.4 Launch targeted online advertising campaigns Considering that printed advertising is very expensive, it should be only used in carefully selected media, preferably as part of larger campaigns or to reach very special interest niches through specialised media. On the other hand, it is important to ensure a consistent presence of Cyprus in online channels. The Internet offers the opportunity to carry out very targeted campaigns at reasonable cost and is also a very good platform to test concepts and messages before investing in more expensive media.
Action 3.5 Perform co-op branding actions It will be very hard for Cyprus alone to spread the Cyprus brand and its attributes to the world. Thus, alliances with industry partners (transport carriers, travel trade, media brands, etc.) that have the same interest in promoting Cyprus should be facilitated by the new NTA. Partnerships and co-funding agreements with transport carriers, OTAs, tour operators and media brands will allow the Cypriot tourism industry to engage in efficient communication and sales actions to reach foreign markets.
Work stream 4. Monitor the brand implementation and its performance To confirm if the implementation has been done correctly by all the involved stakeholders and if the actions performed have contributed to achieve the objective, monitoring is crucial. After setting-up the brand application guidelines and providing tools to implement it correctly, it is key to control the activities and practices to detect any deviations and misuses. On the other hand, it is also important to audit the brand to measure its performance over time in the source markets in order to better understand how the new brand of Cyprus is being perceived and how the image of Cyprus changes over time.
Action 4.1 Appoint a Brand Manager with clear responsibilities and functions The Brand Manager will be in charge of Cyprus’ brand strategy management, ensuring its correct implementation, as well as the consistency of all initiatives with the positioning, the set of images and perceptions, and the brand’s ‘Big idea”. They will be the brand guardian, developer and communicator in the domestic and overseas markets and will be the main contact point on all brand-related issues.
Action 4.2 Create the ‘Brand Committee’ The ‘Brand Committee’ will be composed by representatives of the National Tourism Authority, as well as external brand/marketing professionals, who will support the Brand Manager and provide oversight.
Action 4.3 Audit periodically the Cyprus brand performance Perform a brand equity evaluation according to Young & Rubicam Brand Asset Valuator (awareness, esteem, differentiation, relevance). THR recommends to execute yearly brand audits in each of the strategic key markets.
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E.
306
Main stakeholders and their roles Responsible
National Tourism Authority The ‘Brand Committee’
Accountable
Consulted
Informed
x
x
x x
Tourism industry Regional tourism offices
x
x
x
NTA offices abroad
x
x
x
Contracted partners
x
Selected media, journalists, bloggers, etc.
x
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F.
307
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Implement the branding system
Total (.000 €)
17
2.200
978
Budget per year 18 19
978
244
20
-
1.1 Achieve a general agreement on the proposed brand identity and its positioning 1.2 Approve a tourism brand architecture encompassing product and regional brands and labels Work stream 2. Align the new tourist brand with the Strategy
2.500
278
1.111
1.111
-
5.680
473
1.893
1.893
1.420
1.200
-
436
436
327
11.580
1.729
2.1 Commission and implement Cyprus’ ‘Big idea’ 2.2 Commission the design of the new brand visual and baseline 2.3 Test the proposals of baseline / brand visual and get the official approval Work stream 3. Develop an integrated 360º brand communication system 3.1 Implement a strong launching of the new brand 3.2 Launch a Media Relations Special Programme 3.3 Develop branded content 3.4 Launch targeted online advertising campaigns 3.5 Perform co-op branding actions Work stream 4. Monitor the brand implementation and its performance 4.1 Appoint a Brand Manager with clear responsibilities and functions 4.2 Create the ‘Brand Committee’ 4.3 Audit periodically the Cyprus brand performance Total L: Low
M: Medium
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H: High
4.419 3.685
NR: No Risk
1.747
Timetable 17
Years 18 19
•• •
20
Period 21-25 26-30
• ••• •• • • •••• •• •• •• •• •• ••• • • • • •• • •
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Implement a world-class marketing plan Initiative Owner: National Tourism Authority
A.
308
Priority Start-final deadline 1Y2Q-4Y4Q
Issue(s) to be resolved The level of awareness and the current value proposition of Cyprus as a tourist destination are still rather low in the targeted markets. The CTO is doing its best to market Cyprus in different markets, but is missing a strategic framework (priority products, markets, and segments to target). The tourism offices abroad perform a lot of promotional activities, but have not yet become real business developers. Many relevant sales channels, especially on the internet, can still be developed. Furthermore, most existing operators are not marketing themselves in a high-standard professional and efficient way, showing that the private sector is not yet involved in business development in an optimal way. And closing marketing agreements with key distribution partners are complex and inflexible, which makes it a very bureaucratic process. Their tight and not well-allocated budget responds more to opportunity-based decisionmaking rather than the strategic potential-oriented. There is a lack of innovative tactics (e.g. the CTO still attends over 60 tourism fairs per year) caused by the limited marketing and emarketing know-how.
B.
Initiative summary This initiative will focus on the implementation of an Operational Marketing Plan following the new strategy, using best practice and tools to significantly influence the targeted source markets. The implementation of the Plan will be performed by the new redesigned Marketing department within the National Tourism Authority. The involvement of key players (companies, regions, and organisations), and of an exclusive group of partners in the target source markets, are a key element on the success of the marketing plan. The plan will be: •
Based on a defined strategic framework aligned with the National Tourism Strategy
•
Targeting the prioritised segments and geo-markets
•
Supported with the right business intelligence system
•
Including powerful and innovative concepts and ideas that leads to word-of-mouse and word-of-mouth marketing
•
Using international best practice and the most effective marketing tools
•
And finding possible areas where a less bureaucratic and more pragmatic handling of collaboration agreements can be developed
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C.
309
Key benefits of a successful initiative implementation Cyprus will have an implemented strategy-backed marketing plan with a clear and consensual idea regarding what to do and how to effectively act and cooperate to achieve it. As a result, Cyprus will receive increasingly profitable tourists and this will result in a cumulative growth of secondary demand from the 7 top source markets: UK, Russia, Nordic countries, Germany, France, Switzerland, and Israel.
D.
Action plan Work stream 1. Carry out an Operational Marketing Plan With the help of a newly structured, empowered and enabled marketing team, Cyprus will implement an Operational Marketing Plan taking advantage of the latest technologies, insights, and opportunities in order to raise the levels of traveller inspiration, bookings, and service, and strongly improve the productive support and collaboration with the trade abroad and tourism businesses in Cyprus.
Action 1.1 Execute a Media Relations Special Programme This initiative will see the set-up of a Media Relations programme with a global firm, and the launch, management, and monitoring of this implementation. Within the defined target markets Cyprus will select relevant online and traditional media to reach target customers. The offices abroad will establish contacts and analyse the needs and wants of the media/key journalists and bloggers. Cyprus will then select and produce relevant visual, text, and audiovisual content for all markets. The right mix of paid and unpaid PR will be defined and key media will be invited to visit Cyprus and to frequent media events organised by the offices abroad in their markets. Relevant collaborators will use the media content that the National Tourism Authority provides because it will be novel, fascinating, high quality, easy to access and adaptable. The content will seduce journalists and bloggers to travel to Cyprus, either by themselves or invited by the National Tourism Authority, turning them into press ambassadors for the country. They will be enticed to frequently post new content about Cyprus. The increased, targeted media coverage will enhance the awareness, interest, and purchase intentions among targeted segments for Cyprus.
Action 1.2 Deploy an outstanding digital marketing Cyprus should apply different digital marketing tactics based on the main goals to achieve to the different steps of the customer travel journey. Four general goals are identified:
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Figure 117. Digital marketing tactics per goal
Adapt the approaches per market and segment in order to maximise ROI and involve the private sector, in order to take care of their needs regarding digital marketing and required support. (Please refer to the further information at the end of this initiative for the detailed digital marketing actions).
Action 1.3 Launch co-op marketing programme The National Tourism Authority Marketing department will support tourism industry members by providing opportunities for partnership in marketing activities. Some suggested ideas for co-op marketing initiatives are: •
Co-marketing with OTAs. Evaluate co-branded programmes such as Expedia Media Solutions which reaches Cyprus target countries across Expedia´s network of sites through display advertising.
•
Co-marketing with generalist and specialised tour operators.
•
Co-marketing with international airlines.
•
Joint venture campaigns with non-travel brands that target the same type of audiences in the source markets.
•
Co-marketing with influencers in specific topics.
This co-op marketing initiative will enable groups with common interests and common marketing goals to leverage both private and public funds to achieve greater marketing impact for all. Large parts of this action will be covered by the Market Targeting initiative (Initiative 9), driven by the respective unit within the NTA’s marketing department.
Action 1.4 Put in place a ‘Marketing toolbox’ to be used by the priority source markets A unique Cyprus marketing toolbox has been identified by THR. From that unique set of marketing tools, a selection of the most adequate, with the appropriate mix, will be implemented per priority market. The approaches per source market and product are adapted in order to maximise the ROI. Please refer to the “Source Markets Separate Plan” on Chapter 10 for the list of recommended tools for the priority source markets.
Work stream 2. Support the tourism industry The Cypriot tourism industry is not yet internationally competitive to plan and execute its marketing based on the latest know-how and technologies. The National Tourism Authority Marketing Department will play a key role in building more marketing expertise among tourism MSMEs all around Cyprus. The new “Support to the Industry” team will be created
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taking care of different on- and offline actions providing know-how, tools, methods, bestpractice examples, case studies and relevant market intelligence.
Action 2.1 Communicate and share the Market(ing) Intelligence information produced by the Business Intelligence System (BIS) Provide online access (inside the Visit Cyprus website) to the market(ing) intelligence reports that has been elaborated under the new Business Intelligence System (See initiative 22. Launch performance monitor). Keep that content organised and up-to-date so the tourism industry players can search it easily and obtain substantial results that could help their businesses. Once a considerable amount of information has been developed, kick-off and communicate its availability in accordance to and with the support of the BIS team and gather positive feedback and criticism, ideas, and suggestions to further improve the website.
Action 2.2 Implement an Industry Marketing Education Programme The National Tourism Authority Marketing department in close collaboration with the Cyprus Chamber of Commerce and Industry, and the Ministry of Education and Culture will have to elaborate and implement an internal and industry marketing education programme. The trainers will have to come from highly reputed marketing and business schools in Cyprus or Europe. The programme will provide the necessary practical and analytical skills required to succeed on the tourism sector. The programme modules will incorporate established concepts and systems underlying marketing processes, as well as current specialist issues in tourism marketing. It will contain a range of skills relevant to the tourism marketing sector, including how to study customers through their travel cycle and the environment in which tourism marketing is conducted, and how to formulate plans that are appropriate for specific tourism products. The programme could be delivered face-to-face or online to the registered participants. For additional instructional content, webinars, plus suggested downloadable bibliography, and case studies will be provided, subject to registration, from the Visit Cyprus web page.
Action 2.3 Organise networking sessions among industry members Increase collaborative networking activities (both locally and abroad) to exchange best practices and share industry information and insights. Cyprus should work to become a destination supported by a strong collaborative foundation, a committed tourism industry working together within the National Tourism Authority. Visitors do not see their holidays as small pieces, so by working together Cyprus will create a culture within the tourism industry and community where everyone is an advocate.
Work stream 3. Restructure the NTA offices abroad Reorganise the functions of the current representation of the CTO in 12 markets (with active offices in fifteen major cities worldwide): Belgium, France, Germany, Israel, Italy, Netherlands, Nordic countries, Poland, Russia, Switzerland, UK, and Ukraine. THR provides recommendations on two aspects: â&#x20AC;˘
The new role of NTA offices abroad
â&#x20AC;˘
The steps to follow to implement a new NTA offices abroad strategy
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Action 3.1 Define the new role of Offices abroad THR strongly recommends reviewing the current activities performed by Cyprus Offices abroad with special attention to four areas: Table 81. Change in the role of Offices abroad Areas of action
From…
….To
Business to consumer relationship (B2C)
Attending requests for information of potential consumers and distributing promotional leaflets.
Re-directing consumers to the web page of Visit Cyprus / not addressing the public.
Business to business relationship (B2B)
Organising big crowd events for the trade to present the offering of Cyprus.
Implementing a trade development plan, with clear objectives per target, tailor made actions and follow up.
Business to media relationship (B2M)
Organising events with the press, delivering press notes, implement communication actions, etc.
Leave all the relations with the media and the consumer in the hands of a global PR and media relations agency
Key partners’ development
Being mostly reactive in the pursuit of agreements with key partners in source markets (transport, large tour operators, media, etc.)
Implementing a key partners’ development plan, with clear objectives per target, actions to perform and follow up.
The NTA offices abroad will have five important responsibilities to perform for the marketing of Cyprus in source markets: 1. Marketing planning To adapt and implement the Operational Marketing Plan for the market in order to reach the objectives defined by the National Tourism Authority Marketing department. 2. Business development Identification and selection of trade / transport / media contacts, management of the relationship with a view to establish commercial agreements. Organisation and execution of workshops, roadshows, trade fairs, selection of the best operators to attend fam trips, etc. All these making sure that the meetings between foreign operators and Cypriot businesses are carefully planned. 3. Support to the Cypriot industry Serve, cooperate with, and assist Cypriot companies in their business in the market. 4. Market intelligence Elaborate periodical market intelligence reports for the National Tourism Authority Marketing department and the Cypriot industry (trends, demand, trade, competition, etc.) 5. Detection of opportunities Detection of opportunities for sponsorship, co-marketing, investment in Cyprus, etc.
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Action 3.2 Implement the new Offices abroad structure The recommended steps in implementing a new role for Cyprus Offices abroad are: •
Define the marketing models for offices required to reflect different priorities among source markets and assign budget accordingly. It is important to establish clearly the portfolio of services required in each model and the degree of responsibility.
•
Assign marketing models to the source markets. Depending on the priority of the market, the National Tourism Authority Marketing department will assign marketing models.
•
Launch open tenders to hire the most appropriate marketing agencies (if the selected global communication and marketing agency does not have representation in the country).
•
Establish marketing objectives for each market. These objectives will have to be discussed with the selected agencies for them to prepare the strategic and operational plan for their markets.
•
Define the communication roles and procedures between National Tourism Authority Marketing department and the markets.
•
Establish the responsibilities of National Tourism Authority Marketing department vs. the markets, with clear milestones.
•
Measure periodically the performance of the marketing agencies against results. An important percentage of the contract fees (35-40%) should be variable based on the achievement of the objectives agreed for the market.
THR suggests that three different marketing models may be required: Table 91. Potential marketing models for Offices in source markets
Priority of the market Marketing budget
Supplier
Scope of marketing services
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Model A
Model B
Model C
Strategic
High
Medium
>= 0.2 million €
< 0.2 million €
No individual budget assigned
Own office (with the support of a Marketing agency)
Marketing agency (as a representative office)
Embassy or Export Office or Chamber of Commerce or similar
Full marketing services required.
Marketing services focused on marketing intelligence, business development and support to the industry. Responsibility within each area is smaller than in Model A.
Marketing services focused on support in the implementation of actions and support to the industry.
CYPRUS TOURISM STRATEGY
E.
Main stakeholders and their roles Responsible
National Tourism Authority
Accountable
Consulted
Informed
x
x
x
Tourism industry
F.
314
Regional tourism offices
x
x
x
NTA offices abroad
x
x
x
Contracted partners
x
Selected media, journalists, bloggers, etc.
x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years Total
Work stream / Action Work stream 1. Carry out an Operational Marketing Plan
(.000 €)
17
53.100
10.620
4.530
906
18
Years
19
20
14.160
14.160
14.160
1.208
1.208
1.208
1.1 Execute a Media Relations Special Programme 1.2 Deploy marketing
an
outstanding
digital
1.3 Launch co-op marketing programme 1.4 Put in place a ‘Marketing toolbox’ to be used by the priority source markets Work stream 2. Support the tourism industry 2.1 Communicate and share the Market(ing) Intelligence information produced by the Business Intelligence System (BIS) 2.2 Implement an Industry Marketing Education Programme 2.3 Organise networking sessions among industry members Work stream 3. Restructure the NTA offices abroad
4.490
-
898
1.796
1.796
62.120
11.526
16.266
17.164
62.120
3.1 Define the new role of Offices abroad 3.2 Implement the new Offices abroad structure Total
L: Low
M: Medium
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H: High
Timetable
Budget per year
NR: No Risk
17
18
19
20
•••• •••• •••• ••• •• •••• • ••• ••• ••• • ••
Period 21 2630 25
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Further information on Initiative 11 -Implement a world-class marketing plan: Digital marketing actions recommended THR has selected the most important actions to be implemented in digital marketing that best suits Cyprus tourism objectives and are indicated and described below: Table 92. Digital marketing actions per goal Inform and Inspire
Sales
✓ a.
Inspiring website
✓ e. Experiences and travel services purchase Social Commerce
✓ b.
Experience personalisation
✓ c.
Exciting social media profiles
-
Member get member
✓ d.
Seductive content in 3rd party channels
-
Contextualisation/ geolocation
Service ✓ f. Customer service channels
Relationship ✓ h. User generated content (co-creation)
-
In-destination apps
✓ i.
-
Preferences based on social media profiles
-
Exclusive content
-
Gamification
✓ g. Multimedia content database
Evaluate and respond to reviews
✓ THR recommended actions for Cyprus’ digital marketing
a.
Inspiring Visit Cyprus website The marketing team will have to enhance both traveller inspiration and information of Cyprus across all online channels, especially via its own website. This will mean shifting Visit Cyprus website from information to inspiration; adapting navigation, loading new, more seductive, and meaningful content. THR, with its broad experience benchmarking DMO webpages and defining website structure for many of its clients, recommends that Visit Cyprus webpage integrate the following features and content that add value for tourists throughout their entire travel journey. Some essential elements are as follows: •
User friendly: simple and intuitive navigability, with a logical information structure.
•
Content management: simple, flexible, self-manageable, scalable, and multilingual.
•
Correct display on different browsers and devices, e.g. Explorer, Chrome, Firefox, IOS, Android, etc.
•
Search engine friendly: indexable, discoverable and linkable.
•
Google analytics: statistics and behaviour analysis of visitors to the website.
•
Search engine: in general, and locating “experiences and great trips”.
•
Integration with social networks: widgets, share buttons, etc.
•
Geolocation: supporting Google Maps and geolocation on mobile devices.
•
Multimedia: supporting multimedia material, image galleries, 360º, videos, audio, brochures, etc., and allowing these to be downloaded.
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•
Trip Planning: allowing the user to add different experiences, places or all sorts of other items shown on the website into a trip planner, which can then be printed or shared via email.
•
User generated content: tourists can publish content using their own experiences, or invite bloggers to write on a more regular basis.
•
Event Calendar: search for and display events with automatic data management.
•
Registration management of tourism service providers: registration, content publishing, publishing permits system, etc.
•
User registration management: direct registration or through social networks such as Facebook or Twitter; to access their travel plans, published comments and/or photos, publishing permits system, etc.
•
Mobile application: the app would be used with data connection, although a limited version would be available without access to data.
An example of an inspirational website is Emirates, the airline company, that instead of just selling flights encourages the users to get inspired when choosing a destination with relevant content about exploring new places. Figure 118. Emirates “Inspire me” web page
Source: Emirates.com
b.
Experience personalisation Another way to inspire is what the USA destinations do on their website. They let the user fine tune their trip depending on the level of activity, type of destination, travel party, and other variables; and deliver destinations and experiences including the matching percentage with their preferences.
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Figure 119. Visit the USA – “Tune your USA trip” web page
Source: Visittheusa.com
c.
Exciting social media profiles Cyprus should properly manage the existing profiles in the most popular social networks to inspire the travellers through exciting multimedia content of the country and its thrilling experiences. The recommended list of actions to be completed to improve the Cyprus performance in social networks are: Table 93. Social networks catered towards national and international tourists to manage Social network
Actions to complete • • • • •
Link the website to the Facebook page. Include share buttons. Use tools for monitoring. Create event pages to generate visitor participation. Use paid advertising campaigns for certain segments with a specific goal.
• • • • • • •
Monitor what is said about the destination. Link to the website (Follow button). Include recent tweets on the webpage. Interact with other users (retweet). Use it as a form of journalism in real-time for organised events. Encourage the use among users of fun hashtags (#) to tag content. Create an additional user providing “customer service”. Use this channel to support and respond to information requests, comments, and complaints.
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Social network
318
Actions to complete • • • • • •
Promote Cyprus video channel. Link the channel to the website. Insert the channel’s videos on the webpage. Remain up to date with competitors’ actions. Encourage users to produce and upload content. Consider the possibility of using paid advertising campaigns for certain segments with a specific goal.
• • • • •
Link photographic channels to the website Put photos on the website Optimise the website so that photos can be shared Get partners and followers involved in producing material Encourage the use among users of fun hashtags (#) to tag photos.
• • • • •
Create a corporate website. Designate 1 or more professionals as administrators. Make routine publications. Create groups with a common interest. Consider paid advertising campaigns by segmenting the audience, with a specific goal.
YouTube
A great example on social networks is how Tourism Australia has customised their YouTube Channel with its brand image and selected video content to inspire travellers. Figure 120. Australia’s YouTube channel
Source: Tourism Australia – YouTube
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d.
319
Seductive content in 3rd party channels (travel sites and blogs) Over the last few years, international travel magazines and guide books have developed strong online channels. Using those to place inspirational and seductive content about Cyprus will benefit the country directly during the choosing destination process. As well as online publications, travel blogs have become one of the main sources travellers refer to when deciding their leisure destination. THR recommends some travel blogs that have received different awards for their content and popularity. Table 94. International online travel publications Publication
Description CondĂŠ Nast Traveler is a publication (online and printed) of reference for today's traveller. It covers international destinations with the most complete information on hotels, restaurants, shops, etc. Travel + Leisure is described as a single online stop for the sophisticated traveller eager to find tips, news, and information about the most exciting destinations around the world. AFAR is defined as a multi-platform media of the travel sector that inspires and guides those who travel the world. Traveller, from National Geographic, is their online version, with four or five destinations covered each month and articles with different options for â&#x20AC;&#x2DC;Weekends', 'Breaks', etc. Lonely Planet is one of the world's most famous publishers of travel guides. In addition to the travel guides, the group edits content for their online and printed monthly magazine.
Table 95. Travel blogs awarded or recommended by media Blog name and URL
Country (language)
Country by country (countrybycountry.com/blog)
UK (English)
French Travel Media Awards 2016 (nominee)
UK (English)
French Travel Media Awards 2016 (nominee)
UK (English)
UK Blog Awards 2015 Travel
UK (English)
Skyscanner Travel Bloscars 2014: International winner
UK (English)
Skyscanner Travel Bloscars 2014: International winner
Essential Journeys (essentialjourneys.co.uk) Family affairs and other matters (familyaffairsandothermatters.com ) World of Wanderlust (worldofwanderlust.com) Flora the (floratheexplorer.com/)
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Explorer
Media & Award
CYPRUS TOURISM STRATEGY
Blog name and URL
Country (language)
Just Travelous
Germany
(justtravelous.com)
(German and English)
Jo Igele
Germany
(jo-igele.de)
(German)
Weltenbummlermag
Germany
(weltenbummlermag.de)
(German)
Reisedepeschen
Germany
(reisedepeschen.de)
(German)
Hot & Chilli – food and travel (hotandchilli.com) My tour du globe (mytourduglobe.com) Petites Bulles d’Ailleurs (petitesbullesdailleurs.fr
e.
320
Media & Award Skyscanner Travel Bloscars 2013: International winner Fitur World Travel Award 2015 (nominee) Top 10 “Reise”-Blogs in Deutschland Top 10 “Reise”-Blogs in Deutschland
France (English)
French Travel Awards 2016
Media
France (French)
‘Le top 10 des blogs de voyage’ by Cosmopolitan
France (French)
‘Le top 10 des blogs de voyage’ by Cosmopolitan
Experiences and travel services purchase THR recommends establishing the web page as a strong sales point, the best place for booking your holidays to Cyprus. The bookable offer of Cyprus will be made easily and readily available on the Visit Cyprus tourism website, because platforms owned by an official organisation like a tourist board enjoy the highest credibility among users. They are the first stop for the majority of travellers when starting the search process for their next holidays. In addition, the tourist business of Cyprus will be able to use a powerful and comparably cheap sales channel. The offer will be strongly expanded and the new focus of bookable content will be put on experiences rather than accommodation. In addition to the marketing functions described earlier in point a, for a transactional platform the following are recommended: •
A simple but effective web booking engine (using a shopping cart or basket)
•
Virtual point-of-sale system (credit card and/or PayPal)
•
Secured online payment system certificate (e.g. VeriSign)
•
Packaging methods
•
Procedure for offers/deals
•
Related products option
•
Discount code option
•
Management of user registration/customer accounts
•
Management of sending of emails including offers and promotions
•
Transactional mobile application
A good tourism industry example in this field is what has been done by Euskadi Basque Country, an important tourism region in Spain. Their website allows for pre-booking (no online
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transaction) and reserving (by making online payment) authentic tourism experiences in the region. The Basquetour organisation, after putting it out to public tender, awarded a private company with the “Services agreement for management of reservations” under the framework of the “Experiences programme for Euskadi accommodation and tourism products”. Figure 121. Euskadi’s experiences booking platform
Source: Turismo.euskadi.eus
f.
Customer service channels Online and social media opens up a new spectrum of customer service possibilities, letting the companies and organisations have a conversation with the customers. In customer service matters, THR recommends activate digital ‘customer care’ channels additional to the traditional ones, such as physical tourist information offices and phone lines. •
Live Chat: to manage “in real time” information requests, complaints, and suggestions. The chat will be available through the Visit Cyprus webpage.
•
Twitter account: to give followers exclusive service, with the ability to answer the private and public requests. A Twitter link should be available in the Visit Cyprus webpage.
•
A customer care email address, to solve any user doubts or information requirements.
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As an example, Visit Portugal offers a Live Chat in their website in different languages during specific hours. Figure 122. Visit Portugal live chat
Source: Visit Portugal
g.
Multimedia content database Generating and subsequently operating content effectively will be difficult if this is not categorised correctly in a database. The digital marketing team will have to:
h.
•
Define themes, topics, regions, target groups, uses of media content.
•
Produce, attract, structure and tag content in the database accordingly.
•
Apply strict quality filters on the content published.
•
The database will have to be made available to relevant partners (media and business partners in Cyprus and in the target markets).
•
And more importantly, share content proactively in a selective and targeted way.
•
As an example, Peru’s official tourism website includes a “Multimedia Resource Centre” section, where content is neatly organised into Brochures, Photos, Videos, Audio Guides, Maps & Plans, Virtual Tours, Virtual Calendar, etc.
User generated content (co-creation) THR suggests to steadily rise the share of web content, especially Facebook and another social media, but also on the proprietary website, from “source VisitCyprus.com” to “source xyz”. The marketing department should shift its main role from content generator to content stimulator and moderator. The team could stimulate content generation through means like regular repetitive calls for content (e.g. “Sunday morning in Cyprus”), contests about different topics, interests, places, some with awards, or news jacking (picking up much discussed global topics and apply them to Cyprus in a relevant, fun, or interesting way), etc. Also, the team will proactively invite travellers in Cyprus and post-visit to become highly credible fans and ambassadors on owned social media channels like Facebook, but also on portals like TripAdvisor, involving not only tourists, but also local Cypriot companies and proud Cypriots.
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Identify potential content developers to collaborate with, including: •
Journalists/ press
•
Music and sound producers
•
Bloggers
•
Social media strategists
•
Photographers
•
•
Travel guide writers
Tourism experts specialised in Cyprus or particular tourism products
•
Film makers
•
Etc.
To mention some examples, the Switzerland and Canada tourism webpages encourage users to upload photos or videos. Switzerland invites tourists to become ambassadors of the country with their own videos. Meanwhile, Canada extend an invitation to Canadians to pick up their cameras and share the best travel experiences to inspire other travellers. Figure 123. Examples of Video uploading - Switzerland and Canada
Source: Myswitzerland.com and Canada.travel
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New Zealand encourages travellers and tour operators to create articles which can then be used in the websiteâ&#x20AC;&#x2122;s trip planner. These can also be shared on social networks with just one click. Figure 124. User generated content of New Zealand
Source: Newzealand.com
i.
Evaluate and respond to reviews THR suggests to manage Cyprusâ&#x20AC;&#x2122; online reputation. Employ a comprehensive tool for monitoring and managing social networks in order to assess and respond to comments that users make about Cyprus in any of the social networks, online reviews web pages (like TripAdvisor) and blogs. Figure 125. Online reputation management tools examples
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Manage seasonality reduction initiative Initiative Owner: National Tourism Authority
325
Priority Start-final deadline 1Y1Q-4Y4Q
Important note: THR has developed a separate Seasonality Reduction Plan, with more detailed content regarding this initiative and its work streams. Here you find an overview of the measure, please refer to Chapter 10, Plan E.
A.
Issue(s) to be resolved Seasonality of the demand is one of the main key issues Cyprus needs to tackle in order to continue growing a profitable and sustainable tourism sector. The highly seasonal pattern of the tourism demand, with a peak in the summer months, is mainly caused by an excessive dependence on the Sun & Sea segment, and generates negative impacts for the tourism sector and the economy of Cyprus at large. Those include massification in the summer months and underutilisation of facilities and infrastructure in the off-season. On the other hand, a vicious circle is created when due to a lower demand in the low season, the air capacity is reduced. Seasonality also has an impact on the profitability of the investments and on jobs. For example, it is critical that off-season occupancy rates in high added value accommodation (hotels) improves, offering more opportunities for long lasting jobs and making Cyprus more attractive for investors.
B.
Initiative summary The purpose of this initiative is to expand Cyprusâ&#x20AC;&#x2122; value proposition and offering with the objective of increasing tourism arrivals during the pre- and post-months of the peak season as well as during the winter season. A specific marketing effort will also be deployed to attract demand during the off-season. Many coastal tourism destinations have experienced the same problems in the past and have implemented successful strategies leading to a positive change in the demand pattern. However, reducing tourism seasonality will require a specific joint and sustained effort from the tourism authorities and the tourism industry.
C.
Key benefits of a successful initiative implementation If this plan is implemented efficiently in the following 14 years, Cyprus will become an all yearround destination by 2030, reaching a good balance of tourism income across all 12 months of the year.
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326
Action plan Work stream 1. Create a PPS Product Club and a PPS label system Action 1.1 Create the PPS Product Club A Pre- and Post-Season Product Club will be set up to bring stakeholders together and foster collaboration to develop and market the PPS products. Its members will be destinations and tourism companies committed to reach the common objective of attracting and retaining visitors outside the peak season. The PPS Club will be organised by Regional Chapters with a National PPS Committee. Club members will receive special benefits (i.e. being featured in the official tourism portal, participation in specially targeted workshops, etc.).
Action 1.2 Design a PPS label system PPS labels based on the travel motivations and segments prioritised in the strategy will identify destinations and tourism services/activities offering special value during the PPS. The labels will provide a framework for the tourism industry to develop innovative proposals, will facilitate communication and marketing, and will contribute to the desired positioning (i.e. Best time for Golf in Cyprus, Best time for Wellness in Cyprus, etc.).
Work stream 2. Develop attractive products for the PPS Action 2.1 Identify and prioritise product/segments with PPS potential Motivational and demographic segments for the PPS will be identified together with attractive product concepts/themes. They will consider new additions to the Sun & Sea product for the PPS as well as new products targeting other interests and motivations.
Action 2.2 Develop marketable PPS experiences In order to effectively reach the market, the opportunities and concepts will be turned into marketable product concepts that will point out Cyprus’ PPS points of difference, unique activities, and resources (i.e. Walk the coast, targeting active best agers).
Action 2.3 Support the organisation of PPS events A range of attractive events will be organised and marketed year-round. The annual calendar of events –to be broadly publicised– will include existing events –to be enhanced to result more appealing to visitors– and new events, conceived to fill gaps in the existing calendar and to bring life to different locations, The PPS Product Club will be responsible to foster collaboration among its members in order to come up with innovative ideas for experiences, packages, and events. In turn, the NTA will provide technical and financial support, and will ensure that the Product Club members stay motivated.
Work stream 3. Develop a specific PPS communication strategy Action 3.1 Communicate PPS advantages through PR and targeted advertising A specific PPS communication campaign will be deployed enhancing and emphasising the main features and benefits of visiting Cyprus during PPS, as well as promoting PPS products and experiences.
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Action 3.2 Develop an attractive website to market the PPS offerings Online channels will be key, and Cyprus will communicate its PPS value propositions to the targeted customers through a specific PPS website and a carefully targeted PPS online campaign. Media relations and PR activities in priority source markets will also contribute to the consistent and effective positioning of Cyprus as an all year destination.
Work stream 4. Develop and implement a specific PPS sales system Action 4.1 Provide training for PPS Product Club Members Special training will be provided to the members of the PPS Product Club to help them with the development and marketing of PPS experiences and packages. Training will combine classroom sessions, workshops, and individual technical advice with focus in providing the knowledge and skills needed to develop new products, reach agreements with the international travel trade and foster online sales.
Action 4.2 Develop a “push” attitude towards the travel trade and airlines In parallel, the NTA will proactively seek partnerships with airlines and the international tour operators aiming to increase international arrivals in Cyprus during the Pre-Post season.
Action 4.3 Foster direct online sales of PPS products Finally, to facilitate the promotion and marketing of the PPS products, a specific website will be developed including reservation and purchase systems available to the PPS Product Club members. The website will be linked to the Visit Cyprus portal but should have its own URL (i.e. besttimeforcyprus.com).
Work stream 5. Prepare and implement the Winter Season strategy Action 5.1 Prepare and test the Winter Season strategy in one cluster Once the effort to increase demand in the PPS months has been deployed, the stakeholders are mobilised and procedures are in place, it will be time to implement the second part of the Seasonality Reduction Plan focusing in the winter season months (January-March, November, and December). It will start with a pilot test in a selected strategic cluster following the same approach and guidelines spelled out for the PPS. The difference in this case is that the development of new products will rather focus on the diversification of the product portfolio with products and experiences targeting motivations and interests that may attract new demand in the winter months. According to our experience, the products/experiences, which should be added to the rest of PPS products/experiences in order to generate demand during winter, are the following: •
Themed mega swimming-pools covered by domes generating tropical micro-climates inside.
•
Education programmes on topics of interest on “successful aging”: healthy dietetic, brain exercises and activities, great cultural topics, etc.
•
Musical experiences that benefit dance, movement, and interaction.
•
Special privileges for the majority of visits and excursions (typical breakfast in Kurion, Heritage card that allows free access to most heritages sites, etc.)
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•
“Christmas in Cyprus” programme in which rituals and celebrations common of these holidays take place, etc.
•
Organisation of 5 events of great size and complexity, before and after Christmas.
•
Etc.
Action 5.2 Implement the tested Winter Season initiative on all clusters with potential The roll-out of the model to all the clusters will take place along the 2024-2030 period.
E.
Main stakeholders and their roles Responsible
National Tourism Authority Local Tourism Industry
Accountable
Consulted
Informed
x x
x
x
Airline companies
x
x
Tour operators and travel agents
x
x
NTA offices abroad
x
x
x
Regional tourism offices
x
x
x
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F.
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action
Total (.000 €)
Work stream 1. Create a PPS Product Club and a PPS label system 1.1 Create the PPS Product Club
1.920
Budget per year 18 19
17
20
853
853
213
-
1.710
190
760
760
-
2.510
-
502
1.004
1.004
2.310
-
-
990
1.320
2.990
748
748
748
748
11.440
1.791
2.863
3.715
3.072
1.2 Design a PPS label system
Work stream 2. Develop attractive products for the PPS 2.1 Identify and prioritise product/segments with PPS potential 2.2 Develop experiences
marketable
PPS
2.3 Support the organisation of PPS events Work stream 3. Develop a specific PPS communication strategy 3.1 Communicate advantages through PR targeted advertising
PPS and
3.2 Develop an attractive website to market the PPS offerings Work stream 4. Develop and implement a specific PPS sales system 4.1 Provide training Product Club members
for
PPS
4.2 Develop a “push” attitude towards the travel trade and airlines 4.3 Foster direct online sales of PPS products Work stream 5. Prepare and implement the Winter Season strategy 5.1 Prepare and test the Winter Season strategy in one cluster 5.2 Implement the tested Winter Season initiative on all clusters with potential Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable 17
Years 18 19
20
Period 21-25 26-30
••• •• •• ••• • •• •• ••• ••• • •• • •• •• •• • • •• •• • •
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Outcome 5. Benefiting the local society and the environment Strategic objective M. Design and manage a tool to assess tourism sustainability
Measure
Target
13 Elaborate the Wise Tourism Index 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
Number of local companies joining the program
• • • • •
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.
O. Enhance vulnerable economic activities and protect cultural identity
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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
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Elaborate the Wise Tourism Index
13 A.
Initiative Owner: National Tourism Authority (Integrated Planning Department)
331
Priority Start-final deadline 1Y1Q-4Y4Q
Issue(s) to be resolved The sustainability of the Cyprus tourism industry is not managed as well as it should be. Many sustainable actions across the country are “bolt-on” but not “built-in”, producing undesirable results. In order to ensure the sustainability of its tourism sector, Cyprus must go further, making concrete efforts that will create a strong culture of sustainability in the country.
B.
Initiative summary This initiative aims to work alongside the efforts that the Cyprus authorities are making in regularly measuring the sustainability indexes of the island’s tourist areas as a first necessary step towards their subsequent management. The initiative recommends creating a Wise Tourism Index in collaboration with the Ministry of Agriculture, Rural Development and Environment. This index will serve as a tool to foster and reward the usage of sustainable practices as manifested, for example, in the regional development masterplan. It will measure components as diverse as economic, social, and environmental sustainability in accordance with some of the best international practices.
C.
D.
Benefits resulting from successfully implementing this initiative •
Ensure the long-term practicality of the tourism industry from an environmental, social, and cultural perspective and minimise any negative economic, environmental, and social impacts.
•
Grant Cyprus a differentiating value in the market place by being perceived as a tourism destination that commits to responsible tourism.
Action plan Work stream 1. Define Cyprus’ Wise Tourism Index Based on internationally recognised and consolidated monitoring systems, it will be necessary to fine-tune the methodology for the national system of monitoring sustainable tourism. The Wise Tourism Index is to be composed of three sub-indexes: The Environmental Sustainability Index, the Social Sustainability Index, and the Cultural Sustainability Index.
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Action 1.1 Set up an expert task force Create a skilled task force made up of public, private and NGO experts (e.g. The Travel Foundation from the UK, very familiar with the situation in Cyprus already). The task force will analyse the many different sustainable tourism measuring approaches worldwide and decide which one(s) to adopt and/or adapt to create a proprietary index which best reflects the most crucial sustainability issues in Cyprus. The private sector will be involved as much as possible in the measurement as well as generation of potentials for improvement and innovative sustainable solutions.
Action 1.2 Engage leading international institutions of renowned prestige who are assessing destinations For the design and endorsement of this methodology, it will be beneficial to use the approach of internationally recognised institutions. Some of these organisations include: the Global Sustainable Tourism Council (GSTC), the International Ecotourism Society (TIES), Green Destinations or the UNWTO. The advantage is clearly that these methodologies already reflect sustainable tourism certification standards, indicators, criteria, and best practices from different cultural and geo-political contexts from around the world.
Action 1.3 Agree on a relevant, pragmatic, and measurable index Based on the aforementioned methodologies, choose the sub-indexes that are most relevant and feasible. Issues particular to Cyprus are to be identified, in consultation with the main stakeholder groups. More specifically, some of these indicators usually include: â&#x20AC;˘
Environmental sustainability indicators: air quality, energy usage, light and noise management, water management, bathing water quality, protection of sensitive environments, wildlife protection, etc.
â&#x20AC;˘
Social sustainability indicators: local career opportunities, public participation and local population opinion, gender equality, tourism awareness and education, supporting local entrepreneurs and fair trade, site interpretation, etc.
â&#x20AC;˘
Cultural sustainability indicators: cultural heritage protection, local identity, site interpretation, etc.
To design this methodology, it would be interesting to engage international institutions of renowned prestige who are assessing destinations, such as the Global Sustainable Tourism Council (GSTC), The International Ecotourism Society (TIES), UNWTO, or the aforementioned Travel Foundation, for example.
Work stream 2. Measure and publish the Wise Tourism Index results Action 2.1 Training and measurement With the support of the chosen international partner, the NTA, by way of its Expert Task Force, will perform the following two actions: a. Training a team of 20 part-time evaluators who are responsible for measuring in agreement with the methods which are developed during the training period (around 80 hours). b. Measurement: the training must be complemented by a first comprehensive measurement by mixed teams made up of the recently trained evaluators and experts
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from the international partner. The second evaluation will be performed by locals, supervised solely by the international experts.
Action 2.2 Advertise the Index to the tourism industry and media To communicate the Wise Tourism Index to targets, THR recommends performing the following activities: •
Preparing and distributing a press release (with a copy of the report) to the national and international press, and other selected media.
•
Organising an annual event to communicate the main results and key findings of the report to the tourism industry, selected media and involved authorities.
•
Always publish the digital version of the report on both the NTA and Ministry of Agriculture, Rural Development and Environment’s corporate websites, to make it available to anyone who is interested.
•
Following up on media coverage and gaining the support of the Tourism Offices abroad for the media in their markets.
Work stream 3. Provide technical support for local authorities for continuous sustainability improvement Action 3.1 Local presentations given by experts Immediately after publishing the Wise Index, presentations will be held in each of the 12 tourist areas in Cyprus on their results raising awareness amongst key stakeholders of the need to improve so as to obtain better results in two years’ time. During this presentation, the experts will propose a set of measures and provide technical assistance free of charge in order to develop plans for improvement.
Action 3.2 Technical assistance Those that have requested technical assistance will receive the service from an expert for a duration of 50 to 100 hours.
E.
Main stakeholders and their roles Responsible
Accountable
Consulted
Informed
Ministry of Agriculture, Natural Resources and Environment and public authorities involved
x
x
x
NGOs
x
x
x
Private Sector
x
x
x
Department of Integrated Planning (NTA)
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x
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Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Define Cyprus’ Wise Tourism Index
Total (.000 €)
17
1.070
476
Budget per year 18 19
476
119
20
-
17
M M
1.1 Set up an expert task force 1.2 Engage leading international institutions of renowned prestige who are assessing destinations 1.3 Agree pragmatic, index
870
-
290
290
290
760
-
304
304
152
2.1 Training and measurement 2.2 Advertise the Index to the tourism industry and media Work stream 3. Provide technical support for local authorities for continuous sustainability improvement
3.2 Technical assistance
L: Low
2.700 M: Medium
Period 21-25 26-30
M M
••• •• •• ••• •• ••
3.1 Local presentations given by experts
Total
• •• • •
20
•
on a relevant, and measurable
Work stream 2. Measure and publish the Wise Tourism Index results
Timetable Years 18 19
H: High
476
1.070
713
442
NR: No Risk
Cyprus Wise Tourism Index (WTI) Every sub-index will need to be defined in relation to the relevant scope. More specifically: •
Indicators related to environmental sustainability usually include the following features: air quality, greenhouse gas emissions, energy usage, light and noise management, water management, bathing water quality, protection of sensitive environments, wildlife protection, etc. These indicators can be divided in two sub-realms: environment and nature.
•
Indicators related to social sustainability generally include the following features: local career opportunities, public participation and local community opinion, human respect, gender equality, tourism awareness and education, supporting local entrepreneurs and fair trade, site interpretation, etc.
•
Indicators related to cultural sustainability may include the following features: cultural heritage protection, local identity, site interpretation, etc.
For the design of this methodology, it would be in beneficial to engage leading international institutions of renowned prestige who are assessing destinations, such as the Global Sustainable Tourism Council (GSTC), The International Ecotourism Society (TIES), Green Destinations and the UNWTO.
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An example: Global Sustainable Tourism Council (GSTC) Criteria The GSTC Criteria was created in an effort to reach a common understanding of sustainable destinations. The GSTC Criteria and Indicators were developed based on already recognised criteria and approaches including: UNWTO destination level indicators, the GSTC Criteria for Hotels and Tour Operators and other widely accepted principles and guidelines, certification criteria and indicators. They reflect sustainable tourism certification standards, indicators, criteria, and best practices from different cultural and geo-political contexts from around the world. The performance indicators presented here are designed to provide guidance in measuring compliance with the GSTC Criteria for Destinations. Table 96. Global Sustainable Tourism Council Criteria SECTION A: Demonstrate effective sustainable management A1 Sustainable destination strategy
A8 Access for all
A2 Destination organisation A3 Monitoring
A9 Property acquisitions
management
A10 Visitor satisfaction
A4 Tourism seasonality management
A11 Sustainability standards
A5 Climate change adaptation
A12 Safety and security
A6 Inventory of tourism attractions A7 Planning Regulations
A13 Crisis and emergency management
assets and
A14 Promotion
SECTION B: Maximise economic benefits to the host community and minimise negative impacts B1 Economic monitoring
B6 Tourism awareness and education
B2 Local career opportunities
B7 Preventing exploitation
B3 Public participation
B8 Support for community
B4 Local community opinion
B9 Supporting local entrepreneurs and fair trade
B5 Local access SECTION C: Maximise benefits to communities, visitors, and culture; minimise negative impacts C1 Attraction protection
C4 Cultural heritage protection
C2 Visitor management
C5 Site interpretation
C3 Visitor behaviour
C6 Intellectual property
SECTION D: Maximise benefits to the environment and minimise negative impacts D1 Environmental risks
D7 Water security
D2 Protection of sensitive environments
D8 Water quality
D3 Wildlife protection
D9 Wastewater
D4 Greenhouse gas emissions
D10 Solid waste reduction
D5 Energy conservation
D11 Light and noise pollution
D6 Water Management
D12 Low-impact transportation
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Baseline issues and indicators of Sustainable Tourism The following table is a collection of the most common issues occurring in tourism destinations, selected from among the more than 50 sustainability issues discussed in the WTO Guidebook on Indicators of Sustainable Development for Tourism Destinations. Baseline indicators considered most relevant and feasible to measure are suggested for each issue. Other issues and indicators could arguably be included in the shortlist, such as health, security, environmental protection, and employment with their corresponding indicators. All these and many other issues and their indicators are covered in the WTO Guide that can be used as a reference. Importantly, the Guidebook also contains a procedure for the development of indicators that correspond to specific issues found at any destination. For this reason, tourism managers need to identify the priority issues at their destinations, in consultation with the main stakeholder groups, and develop indicators that are the most relevant for those priority issues, clear to users and feasible to implement in terms of data availability and the cost to obtain them. Table 97. Sustainable Tourism baseline issues and indicators Baseline Issues
Suggested Baseline Indicator(s)
Local Satisfaction with Tourism
•
Local satisfaction level with tourism (questionnaire)
• •
Ratio of tourists to locals (average and peak period/days). % who believe that tourism has helped bring new services or infrastructure (questionnaire-based). Number and capacity of social services available to the community (% attributable to tourism).
Effects of Tourism on Communities
Sustaining Tourist Satisfaction
• • • •
Level of satisfaction by visitors (questionnaire-based). Perception of value for money (questionnaire-based). Percentage of return visitors.
•
Tourist arrivals by month or quarter (distribution throughout the year). Occupancy rates for licensed (official) accommodation by month (peak periods relative to low season) and % of all occupancy in peak quarter or month. % of business establishments open all year. Number and % of tourist industry jobs which are permanent or full-year (compared to temporary jobs).
• Tourism Seasonality
• • • Economic Benefits of Tourism
• •
Energy Management
• •
Water Availability and Consumption
• • •
Drinking Water Quality
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•
Number of local people (and ratio of men to women) employed in tourism (also ratio of tourism employment to total employment). Revenues generated by tourism as % of total revenues generated in the community. Per capita consumption of energy from all sources (overall, and by tourist sector, per person day). Percentage of businesses participating in energy conservation programmes or applying energy saving policy and techniques. % of energy consumption from renewable resources (at destinations, establishments). Water use: (total volume consumed and litre per tourist per day). Water saving (% reduced, recaptured, or recycled). Percentage of tourism establishments with water treated to international potable standards. Frequency of water-borne diseases: number/percentage of visitors reporting water-borne illnesses during their stay.
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Baseline Issues
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Suggested Baseline Indicator(s)
•
Percentage of sewage from site receiving treatment (to primary, secondary, tertiary levels). • Percentage of tourism establishments (or accommodation) on treatment system(s). • Waste volume produced by the destination (tons) (by month) Solid Waste Management • Volume of waste recycled (m3) / Total volume of waste (m3) (Garbage) (specify by different types). • Quantity of waste strewn in public areas (garbage counts). • Existence of a land use or development planning process, Development Control including tourism. • % of area subject to control (density, design, etc.). • Total number of tourist arrivals (mean, monthly, peak periods) • Number of tourists per square meter of the site (e.g. at Controlling Use Intensity beaches, attractions), per square kilometre of the destination, mean number/peak period average. Source: WTO Guidebook on Indicators of Sustainable Development for Tourism Destinations Sewage Treatment (Wastewater Management)
Some Wise Tourism best practices Some different organisations, companies and tourism destinations that have adopted the Wise Tourism practices are: Organisations: • Global Sustainable Tourism Council (GSTC) •
The International Ecotourism Society (TIES)
Companies • Green Destinations •
Travel Foundation
•
EarthCheck
•
Green Globe
•
Rainforest Alliance
•
Sustainable Travel
Countries / destinations examples • Clients of EarthCheck: Bayan Tree, Sandals Resorts, FONATUR, etc. •
Clients of Green Globe: Intercontinental, Radisson, Grand Hyatt, Lux, etc.
•
Clients of Green Destinations: -
•
Asian Ecotourism Network (AEN) Astiaj Tourism Research and Consultancy Center BookDifferent.com Coastal & Marine Union – EUCC DestiNet.eu and ECOTRANS EUCC Baltic Office, Lithuania European Centre for Eco-and Agro Tourism (ECEAT) University of Klaipeda, Lithuania World Wide Fund for Nature, WWF-Netherlands Green Destinations participates in the preparation of a Green Deal partnership with the Dutch Government, together with EUCC, ECEAT, ECNC, FEE Nederland, Griekenland.net, NHTV – Academy for Tourism Breda, TUI Nederland, and Zoover
Clients of Sustainable Travel: Jamaica, Indonesia, Dominica, Mexico...
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Foster carbon footprint reduction
Priority Start-final deadline 1Y1Q-4Y4Q
Initiative Owner: National Tourism Authority
A.
338
Issue(s) to be resolved Most tourism-related activities require energy directly in the form of fossil fuels or indirectly in the form of electricity often generated from petroleum, coal, or gas. This consumption leads to the emission of greenhouse gases, mainly carbon dioxide. According to UNWTO estimates, tourism is responsible for at least 5% of global CO 2 emissions. The transport sector (including air, road, and rail) generates the largest proportion with 75% of all emissions. Air travel, responsible for 40% of the total carbon emissions, is considered the main contributor for tourism. The accommodation sector accounts for approximately 20% of emissions from tourism. This involves heating, air conditioning and maintaining bars, restaurants, pools and so on. Clearly, this varies depending on the location and size of the accommodation, as well as the type of establishments – 5-star hotels having greater energy consumption than pensions or camping sites. Furthermore, activities such as museums, theme parks, events or shopping also contribute to certain amounts of emissions (approx. 3,5%). Cyprus is no exception. Moreover, the issue is further enhanced by the characteristics of the island’s energy system (a stand-alone system which heavily relies on imported fuels, high rates of energy consumption in the summer months, high supply costs…) – a consequence of the destination’s peculiarities (insularity, Mediterranean climate, seasonality…).
B.
Initiative summary Following the principle that you cannot manage what you cannot measure This initiative encourages the execution of a set of concrete measures, oriented towards the country’s tourism industry, which aim to reduce the carbon footprint generated by tourism. It is a matter of measuring the Carbon Footprint (Mass of CO2 equivalent) to have an indicator of the greenhouse gases emission. From these measurements, destination tourism companies can (with government support) make their own plans to reduce the carbon footprint they generate. As an example, Great Britain and the Netherlands are countries implementing such a scheme. We suggest to look at the following web pages: •
Impact - NHTV Centre for Sustainable Tourism and Transport
•
Carbonfootprint.com
•
WWF Footprint Calculator
•
Visitbritain.org/Develop English resources/Sustainable tourism toolkit
•
Carbon footprint | Greenpartner
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tourism/destination
advice/management
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C.
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Key benefits of successfully implementing this initiative The implementation of this initiative will strengthen the Cyprus tourism industry’s commitment to addressing climate change while contributing to identifying energy and cost saving opportunities. Implementing sustainability measures adds significant value to a tourism offer and attracts international high-quality tourists with significant purchasing power.
D.
Action plan Work stream 1. Implement a programme assessing and calculating the carbon footprint Tourism is not only the largest, fastest-growing industry in the world, it also accounts for 5 to 12 % of global greenhouse gas emissions. At the same time, more and more tourists require information about the carbon footprints of tourism packages. That said, reliable data to determine this is lacking. The same can be said for the tourism industry, such as tour operators, travel agencies, e-business sales operators and in business travel corporations. Although they realise that they need to reduce their greenhouse gas emissions, they now have no means to diagnose and calculate the carbon footprint of all of their products and services in a reliable and mainly automated way. Performing an analysis to calculate carbon footprint is the first step towards reducing and/or offsetting the Cyprus tourism industry’s emissions. On the one hand, it is a tool that can be used by companies and public local authorities to reduce energy consumption costs (lighting, air conditioning, heating and transport); on the other hand, it contributes towards reducing CO2 emissions and greater environmental awareness, which is also an advantage in the eyes of consumers.
Action 1.1 Agree on the diagnosis methodology In order to implement the diagnostic programme, the methodology to be used for diagnosing and calculating carbon footprint must first be agreed upon. The European Commission has published several reports which analyse existing methodologies on both European and international levels. Of these, THR recommends the following guidelines and methodologies, which have greater international recognition: •
The Greenhouse Gas Protocol Corporate Standard (GHG Protocol): Developed by the World Resources Institute and the World Business Council for Sustainable Development, it is one of the most widely used protocols internationally to quantify and manage greenhouse gas emissions.
•
UNE-ISO 14064-1: In accordance with the GHG Protocol, the ISO 14064 guideline was developed in 2006, which is structured in 3 parts. What would apply in Cyprus’ case is the 14064-1, which specifies principles and requirements, in terms of organisation, for measuring and reporting on greenhouse gas emissions and removal. The other parts of this guideline are aimed at, on the one hand, projects specifically designed to remove greenhouse gas emissions or increase their further their removal (ISO 14064-2) and on the other, those oriented towards validating and verifying declared greenhouse gases (ISO 14064-3).
•
UNE-ISO 14065: 2012: Requirements for bodies validating and verifying greenhouse gases, to be used for accreditation or other forms of recognition.
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•
340
UNE-ISO 14069: 2013: describes the principles, concepts and methods relating to the quantification and reporting of direct and indirect greenhouse gas (GHG) emissions for an organisation. It provides guidance for the application of ISO 14064-1 to greenhouse gas inventories at the organisation level, for the quantification and reporting of direct emissions, energy indirect emissions and other indirect emissions.
Action 1.2 Authorise companies that will implement the diagnostic programme THR recommends that the diagnostic services be outsourced to technical support and/or auditing companies. The National Tourism Authority will then launch an annual bid to authorise 15-20 companies interested in providing diagnostic services. This authority will be valid for a period of 5 years. After that period, the company can decide whether to renew its authorisation or not, depending on the technical and economic requirements established by the National Tourism Authority. A list of authorised companies will be accessible to businesses in the tourism industry who want to benefit from the diagnostic programme. They will be able to freely choose which company they want to select.
Action 1.3 Launch the carbon footprint calculation and diagnostics programme Cyprus’ tourism companies will have a period of 4 years from the date the programme is launched to carry out the diagnosis. The diagnostic service will consist of an onsite visit to the company’s facilities to note down any relevant data (consumption, etc.) related to activity and emissions, analysis of the information and, subsequently, creation of a diagnostic report highlighting means of improvement so as to reduce the company’s carbon footprint. From the report’s findings, each company will be responsible for developing a GHG reduction plan, including a clear description of priority areas to act upon, quantitative targets to achieve, actions, timetable and who is in charge of its implementation. The National Tourism Authority will financially support this programme, financing the diagnostics 100%. Those companies and local public authorities that welcome the diagnostic programme will also gain access to other assistance when implementing the plan for improvement (technical support, training, funding of actions and measures…)
Work stream 2. Kickstart an educational programme The Carbon Footprint educational and training programme plays a critical role in contributing to the knowledge, skills, and confidence of tourism professionals in managing carbon footprint reduction programmes in their companies. The educational programme, led by the National Tourism Authority in collaboration with MECIT is designed to build on skills and transfer knowledge, providing information and activities for tourism professionals about the greenhouse effect, climate change and their carbon footprint. The educational and training programme will be delivered by sustainable tourism experts in several different formats, including but not limited to workshops, webinars e-learning modules and train-the-trainer programmes. For example, the educational and training programmes must include the following:
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•
Introducing the Green House effect
•
Energy use and energy reduction actions
•
Adoption of best practices in sustainable tourism
•
Development and implementation of sustainability polices and management frameworks
•
Carbon Footprint certification standards and label system
•
Etc.
Action 2.1 Implement an educational programme The MECIT, in collaboration with the National Tourism Authority and the MARDE (Ministry of Agriculture, Rural Development and Environment) should gather together in order to define the carbon footprint reduction programme and/or see how to integrate it into existing environmental programmes targeting tourism professionals. The MECIT will be responsible for implementing the educational programme in close collaboration with the National Tourism Authority and the MARDE. Teachers of the programme should originate from highly reputed universities and environmental research centres in Cyprus or Europe. The programme will provide the practical and analytical skills required to address the carbon footprint issue in the tourism industry and implement a CFP reduction programme. The programme modules will incorporate established concepts, systems and best practices underlying carbon footprint reduction as well as current specialist issues in energy consumption and sustainability.
Action 2.2 Promote the educational programme MECIT’s implementation of communicatory and promotional activities shall inform potential stakeholders involved and likely beneficiaries of the manual of best practices for the Cyprus tourism industry and encourage its usage.
Work stream 3: Launch a practical carbon footprint reduction manual The development and subsequent dissemination of a best practices manual contributes to reducing energy consumption and natural resources in the tourism sector, thus contributing to the reduction of the sector’s carbon footprint. This manual will include different recommendations so that Cyprus’ tourism sector uses various devices and equipment more intelligently and responsibly. By applying these recommendations, the island’s energy consumption will reduce, the service lives of equipment and devices will be prolonged (as will that of resources) and this, in turn, will decrease the destination’s carbon footprint.
Action 3.1 Produce the best practices manual This action will be led by MECIT, in collaboration with the National Tourism Authority. THR recommends the creation of a Technical Working Group (TWG) in order to produce the manual, which will aim to identify best practices and then select the best of these, based on their eligibility criteria and technical and economic feasibility. The best practices manual will be structured according to the following groups of techniques: •
Best practices for HVAC (i.e. adjusting the thermostat in hotel rooms can save 950 Kg of CO2)
•
Best practices to manage lighting (i.e. swapping existing lightbulbs for low consumption ones can save 75 Kg of CO2)
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â&#x20AC;˘
Best practices related to waste management (i.e. garbage reduction can save 500 Kg of CO2)
â&#x20AC;˘
Best practices related to driving habits (i.e. driving less can save 450 Kg of CO 2).
The description of the techniques will include clear indications under which conditions or circumstances of a certain technique can be implemented (technical feasibility) as well as economic information concerning investment and operation costs (economic viability). Action 3.2 Spread the use of the best practice manual amongst the Cyprus tourism sector The success and impact of a best practice manual depend largely on promotional and communicatory actions. The implementation of a communication and dissemination plan by MECIT shall inform the target audience (the Cypriot tourism industry) of the best practice manual and encourage its usage. THR recommends creating an informative website (managed by MECIT) allowing for a direct consultation and download of the manual and its updates (in PDF format), as well as videos and webinars and related publications on the application of best practices. Moreover, the website will be used to communicate on functions and presentations.
Work stream 4. Support the tourism sector Implementing a carbon footprint reduction programme is a process that requires highly specialised knowledge and technical expertise which is highly unusual in the tourism sector. Although training and information are helpful, the tourism industry requires knowledge and practical experience that will guide it throughout the duration of the programme, particularly in the launch phase and subsequent monitoring. We, therefore, recommend that the National Tourism Authority of Cyprus runs a technical support programme specialising in carbon footprint reduction, aimed at both the public and private sectors. The NTA should allocate a special budget to partially/totally contribute to the advisorsâ&#x20AC;&#x2122; costs.
Action 4.1 Authorise companies that will provide technical assistance THR recommends that the technical support to reduce the carbon footprint be outsourced to specialised energy technical support companies. The National Tourism Authority will then launch an annual bid to authorise 15-20 companies interested in providing diagnostic services. This authority will be valid for a period of 5 years. After that period, the company can decide whether to renew its authorisation or not, depending on the technical and economic requirements established by the National Tourism Authority. A list of authorised companies will be accessible to businesses in the tourism industry who want to benefit from the diagnostic programme. They will be able to freely choose which company they want to select.
Action 4.2 Facilitate technical assistance for the private sector We recommend the provision of a comprehensive technical assistance service addressed to the tourism private sector, in order to identify the environmental impact of the entire business, from the supply chain to customers. Technical assistance will identify where efficiencies can be made, helping the business meet the challenges of sustainability and make the most of the business opportunities. Updated version 23.03.2017
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The technical assistants will look after the most efficient approach for: •
Analysing tourism companies’ carbon footprints, uncovering the environmental impacts & resource efficiency risks, and quantifying the cost of inaction
•
Catalysing: change by identifying & prioritising opportunities that have compelling business cases
•
Developing & implementing innovative business strategies, with realistic targets and practical action plans
•
Communicating the results to stakeholders/customers/senior management in a way that they can value
Technical assistance will be provided by any of the companies which were authorised according to Action 4.1. THR recommends that the National Tourism Authority supports obtaining technical assistance under certain conditions (up to 30% of the cost and deductible from annual corporate tax…), for those companies that have successfully launched a diagnostic programme and improvement plan to reduce carbon footprint. For further information, please refer to Work stream 1.
Action 4.3 Ease technical assistance for local tourism authorities Public sector tourism bodies have a significant carbon footprint, sizeable associated energy bills which increase annually and, most importantly, the ability to extend their influence beyond their operations throughout whole local communities. This influence extends over a range of carbon-sensitive themes including procurement, planning, local business engagement and education. The National Tourism Authority will make a team of certified experts available to the local tourism administrations that will help them reduce their energy consumption without impacting their services, helping them to become more efficient and reduce any unnecessary energy costs. Some examples of technical assistance are: •
Technical advice, carbon footprint and project feasibility studies
•
Carbon strategy and organisational engagement support
•
Low-carbon destinations
•
Decentralised energy support
•
Etc.
Technical assistance will be provided by one of the companies which was authorised in accordance with Action 4.1. THR recommends that the National Tourism Authority supports obtaining technical assistance under certain conditions (up to 30% of the cost and deductible from annual corporate tax…), for those companies that have successfully launched a diagnostic programme and improvement plan to reduce carbon footprint. For further information, please refer to Work stream 1.
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Work stream 5. Implement a “Carbon Footprint Friendly Company” programme Tourists have become more sophisticated and discerning in their purchase decisions, increasingly expressing a preference for products and services that have strictly validated environmental credentials. THR recommends adopting a Carbon Footprint Friendly Company (CFFC) label system that communicates the benefits of travelling to Cyprus, being a Carbon Footprint Friendly destination, increasing potential tourists’ value perception. It is also necessary to establish the label system’s requirements and the rules of the game.
Action 5.1 Create the CFFC Club and design the CFFC label system The CFFC Club should be managed by the National Tourism Authority in cooperation with MECIT and composed of tourism companies that wish to become a fundamental part of what the CFFC provides. The CFFC Club will be responsible for designing and managing the label system. The CFFC label is not a mandatory certification system, but it is a system that the National Tourism Authorities of Cyprus will promote and which the tourism industry may participate in on a voluntary basis. The requirements of the label system will be developed by the National Tourism Authority, in collaboration with MICET and the MARDE. Relevant examples of carbon footprint label standards are developed by Carbon Trust (www.carbontrust.com), in collaboration with BSI and Defra in the UK. Once the system has been developed, the entire process will be tested using five pilot companies, which may highlight the need to make some necessary adjustments to the requirements and/or to qualification process prior to launching the label system. Finally, the CFFC Club will launch an informative campaign about the CFFC label system aimed at the tourism industry (workshops, webinars, website). This will include its requirements and the benefits of being a part of it.
Action 5.2 Implement the CFFC label system The implementation process will begin with a company sending an online application, including their diagnostic results and an improvement plan (see Work stream 1). Once the request has been received, the CFFC’s technical team will review the documentation in order to verify whether the company meets the CFFC label requirements. Potential CFFC labels could be: “CFFC hotels”, “CFFC restaurants”, etc. This focus on activities that are relevant to the tourist and could contribute to improving the value that they perceive. The CFFC Club, following guidelines established by the National Tourism Authority in collaboration with MICET and the MARDE, will determine the characteristics of the programme’s renewal and subscription processes. From a consumer point of view, acquiring a carbon footprint label certificate for goods that don’t use energy is simple, as only the common certificate (Product category rule 1) is required. To acquire a certificate for goods that use energy, a common certificate and description scenario for each piece of stock (Product category rule 2) is required. The creation of the CFFC label system will benefit the tourism industry by implementing continuous improvement and innovation, and better product and brand differentiation. The label also demonstrates the company’s commitment to measuring and reducing product resource footprints, providing a clear visual signal for consumers and stakeholders. Updated version 23.03.2017
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Main stakeholders and their roles Responsible
MECIT
x
Accountable
Consulted
Informed
x
National Tourism Authority
x
x
MARDE
x
x
x
x
x
x
x
Other ministries and public sector agencies involved Other private sector bodies involved
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346
Operational Action Plan & Budget (for the 4 first years)
Work stream 1. Implement a programme assessing and calculating the carbon footprint 1.1 Agree methodology
on
PrioRisk rity
Budget for four years
Work stream / Action
the
Total (.000 €)
17
850
213
Budget per year 18 19
213
213
20
213
diagnosis
1.2 Authorise companies that will implement the diagnostic programme 1.3 Launch the carbon footprint calculation and diagnostics programme Work stream 2. Kickstart an educational programme 2.1 Implement programme 2.2 Promote programme
an
educational
the
educational
Work stream 3. Launch a practical carbon footprint reduction manual 3.1 Produce manual
the
best
600
86
171
171
171
300
43
86
86
86
1.400
200
400
400
400
1.050
-
350
350
350
4.200
541
1.220
1.220
1.220
practices
3.2 Spread the use of the best practice manual amongst the Cyprus tourism sector Work stream 4. Support the tourism sector 4.1 Authorise companies that will provide technical assistance 4.2 Facilitate technical assistance for the private sector 4.3 Ease technical assistance for local tourism authorities Work stream 5. Implement a “Carbon Footprint Friendly Company” programme 5.1 Create the CFFC Club and design the CFFC label system 5.2 Implement the CFFC label system Total
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Timetable 17
Years 18 19
20
•••• • • ••• •••• •• ••• •••• •••• •• •••• •• ••• ••• ••• • ••
Period 21-25 26-30
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Launch “Made in Cyprus” and “Soul of Cyprus” initiative
15
Initiative Owner: National Tourism Authority
A.
347
Priority Start-final deadline 1Y3Q-4Y4Q
Issue(s) to be resolved Cyprus’ current tourism development model doesn’t favour the following two things as much as it could or should: transferring tourism wealth to local communities and preserving important cultural expressions that belong to the Cypriot society. In light of the above, tools that will activate the multiplier effect of tourism income and encourage the preservation of the country’s rich local culture are required.
B.
Initiative summary This initiative aims to activate mechanisms which focus on achieving two results:
C.
•
Increase the production and sale of authentic local products to tourists and the tourism industry through the “Made in Cyprus” programme
•
Promote greater demand for truly Cypriot cultural experiences with the help of the “Soul of Cyprus” programme
Key benefits resulting from successfully implementing this initiative Local businesses will be able to increase and diversify their incomes and employ more locals, which in turn will improve local development. Furthermore, local artists and culture-related businesses will increasingly benefit from the tourism activity on the island. Both measures will support a preservation and in some cases even revival of Cyprus’ rich cultural heritage and traditional products. Local pride and identity will be stimulated, further increasing the value and uniqueness of the tourist experience in the country.
D.
Action plan Work stream 1. Launch the “Made in Cyprus” (MiC) certification Made in Cyprus products are handicrafts, foodstuffs, textiles, drawings, and paintings, etc. that are produced locally in a sustainable way.
Action 1.1 Establish the MiC awarding criteria, rights, and obligations Authorised institutions will create a specific task force to define specific criteria (per product typology) that all the products will need to comply with in order to obtain the “Made in Cyprus” endorsement. The taskforce will ensure that specialty food or handicrafts have been produced in Cyprus using local raw materials, under fair workforce conditions, meeting minimum quality standards and with a strong cultural, traditional, or historic meaning.
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The endorsement processes must be simple and easy to comprehend and apply. In any case, a detailed onsite inspection by the authorities responsible for endorsement is inevitable. Certified producers will be endorsed by the NTA, who will grant them use of the logo under certain conditions.
Action 1.2 Encourage the first group of chosen producers to use the new brand To test the endorsement system and at the same time begin to obtain certified products, certain representative producers will be chosen from a selection of products and districts across the country who will be encouraged and supported in order to attain endorsement. The criteria that need to be met to achieve the endorsement will be related to factors such as: •
Cultural meaning and relevance
•
Uniqueness
•
Authenticity of the products and production methods
•
Quality, safety, and security
•
Local community involvement
•
Fair production
•
Environmental standards meeting
•
Etc.
Action 1.3 Execute a communication plan for “Made in Cyprus” Once the first endorsed products exist, a communication plan must be prepared and launched to increase the brand’s visibility for international and domestic tourists and attract other Cypriot manufacturers who are potentially interested in using the brand.
Work stream 2. Sell MiC products to the tourism industry Action 2.1 Set up a MiC marketing department The association of MiC-certified producers will set up a marketing department including: a sales team of two people and an online sales system aimed at B2B buyers using any one of the many types of software that are available on the market. The MK department will also be responsible for selling the system to the manufacturers.
Action 2.2 Implement 50% VAT reduction for “Made in Cyprus” certified products Hotels, restaurants, and shops that purchase MiC certified products will benefit from a VAT discount of 50%. The Cyprus Tax Authorities will manage this programme that will substitute imports to a certain degree.
Action 2.3 Organise the MiC annual fair This annual fair, which coincides with the Annual Congress of Tourism, will ensure that MiC products will be renowned by the industry and the local population.
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Work stream 3. Sell MiC products directly to tourists Action 3.1 Communicate MiC to the target audience MiC product sales will be communicated to tourists in 3 ways: online, upon their arrival at the airport, and in areas with a high tourist influx on the island. •
Online: on the NTA, TO and participating hotels’ websites.
•
Airports: Mass distribution of a taster advert highlighting that the products are also available at the MiC airport shops.
•
Special app: An app that tourists can download anywhere on the island but that is promoted to them upon reaching Cyprus. Integration into other Cyprus/travel apps is recommended.
•
Hotspots: Displays in hotel lobbies, the most important tourist attractions, etc.
•
Marketing material for B2B use, e.g. for hotels serving MiC food products during breakfast or other meals
Action 3.2 Provide home delivery service An agreement made with the diverse local carriers will allow for easy-to-calculate, reliable transport rates with defined delivery times. This will lead to the purchase of MiC products which would otherwise not be bought due to inconveniences associated with transport.
Work stream 4. Promote 20 MiC shops in island hotspots Action 4.1 Create the design, business model and business plan for the shops Commission a specialist to design a standard shop model of which around 20 replicas will be made for the 20 most important tourist spots in the country. This should include the following, among others: •
A minimum surface area of 200m2 and 10 parking spaces.
•
A food corner serving Cypriot coffee, excellent kebabs, and a well-prepared mezze, consisting of just 8 dishes served in two lots of 4.
•
Plasma television screens for special film screenings.
•
A zone with local food products and wines, all of which are MiC-certified with detailed explanations provided on interactive touchscreens.
•
An area for handicrafts, textiles, and visual arts
The firm that is responsible for the MiC shop design must also take care of interior design and staff uniforms, as well as their visual brand. Managing the above should lead to a clear business model and business plan allowing the financial viability of a MiC shop to be tested.
Action 4.2 Find investors / operators for each shop This must be resolved by way of an open tender, ensuring a rigorous selection process. The Government will assign the consultant-developed project to the investor free of charge. The subsequent construction of the shop must adhere to the project.
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Work stream 5. Develop the “Soul of Cyprus” (SoC) concept and its inventory Action 5.1 Develop the concept All cultural events, whether permanent, seasonal, or occasional, that reflect the knowledge, myths, rituals, arts, etc. inherent in the culture and identity of Cypriot society must become part of the SoC. A work group with the participation of university experts (sociologists, anthropologists, etc.) should develop the concept and identify different “categories” of cultural expressions to be included in the SoC. In addition to folk groups, artistic or artisan workshops, the SoC should include small and charming museums, a complete calendar of festivals and local events, etc. Not only historic, but also popular culture shall be represented in the concept.
Action 5.2 Build inventory base All authentically Cypriot cultural events, whether permanent or seasonal, should be part of the SoC. Those in charge can then proceed to identifying all existing examples of cultural expressions on the island and create an inventory grouped as follows: •
Shows to see or take on
•
Artisan / artistic workshops to be visited
•
Recommended events
•
Unique cultural expressions
•
Etc.
Work stream 6. Communicate and promote the SoC The promotion and sale of SoC experiences will be done using the same tools and equipment that are used to market MiC. This includes the 50% reduction in VAT when tourism businesses employ these types of experiences.
Work stream 7. Provide technical assistance Action 7.1 Authorise 10 consultancy firms capable of providing good technical support The authorisation will be established by way of an open tender. The authorised firms will be in charge of providing technical support for companies, organisations or individuals who request it. The programme will be responsible for 100% of the cost of the service. The different consulting firms will have and help with very different core competencies relevant for each of the different SoC experience types.
Action 7.2 Provide technical assistance The companies, organisations and individuals who request the service will receive between 20 and 80 hours of technical assistance free of charge from one of the 10 authorised companies.
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Main stakeholders and their roles Responsible
National Tourism Authority
Accountable
Consulted
Informed
x
Ministries and other Public Sector involved Private sector associations
x x
Private Sector
F.
351
x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Launch the “Made in Cyprus” (MiC) certification
Total (.000 €)
17
300
100
Budget per year 18 19
200
-
20
-
1.1 Establish the MiC awarding criteria, rights, and obligations 1.2 Encourage the first group of chosen producers to use the new brand 1.3 Execute a communication plan for “Made in Cyprus” Work stream 2. Sell MiC products to the tourism industry 2.1 Set up department
a
MiC
450
64
129
129
129
250
36
71
71
71
600
-
200
200
200
300
-
82
109
109
marketing
2.2 Implement 50% VAT reduction for “Made in Cyprus” certified products 2.3 Organise the MiC annual fair Work stream 3. Sell MiC products directly to tourists 3.1 Communicate MiC to the target audience 3.2 Provide home delivery service Work stream 4. Promote 20 MiC shops in island hotspots 4.1 Create the design, business model and business plan for the shops 4.2 Find investors / operators for each shop Work stream 5. Develop the “Soul of Cyprus” (SoC) concept and its inventory 5.1 Development of the concept 5.2 Build inventory base
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Timetable Years 17
18
•• • •
19
Period 20
• •••• •• • • •••• •••• •••• ••• • •• ••• • ••
21-25
26-30
CYPRUS TOURISM STRATEGY
Work stream / Action Work stream 6. Communicate and promote the SoC 6.1 Set up department
a
SoC
PrioRisk rity
Budget for four years Total (.000 €)
Budget per year 18 19
17
600
-
164
218
218
820
-
273
273
273
3.320
200
1.119
1.001
1.001
marketing
6.2 Implement 50% VAT reduction for “Soul of Cyprus” cultural events 6.3 Organise the SoC annual fair Work stream 7. Provide technical assistance 7.1 Authorise 10 consultancy firms capable of providing good technical support 7.2 Provide technical assistance Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years
20
352
17
18
19
Period 20
••• • •• •• ••• • ••
21-25
26-30
CYPRUS TOURISM STRATEGY
353
Chapter 9 Enabling Initiatives
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9.1
Enabling Initiatives Outcome 6. Develop a highly competitive diamond for the tourism sector Strategic objective P. Promote productivity improvement tools
Q. Reengineer legal and regulatory framework
R. Educate and train the right people
S. Develop air capacity
Measure
Target
Initiatives 16 Create the Competitiveness Unit inside the NTA
% of relevant companies and bodies improving in productivity/ year
• • •
2018: 10% 2019: 15% 2020: 30%
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
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%
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 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
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.
354
CYPRUS TOURISM STRATEGY
16
Create the Competitiveness Unit inside the NTA
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
355
1Y1Q-4Y4Q
Issue (s) to be resolved The Cyprus tourism industry’s financial results are poor due to the country’s loss of competitiveness as a tourist destination, of which the causes are varied and many. If this is not remedied, industry competitiveness will continue to deteriorate and the tourism sector’s capacity to generate wealth will reduce even further. The National Tourism Strategy recommends to undertake certain initiatives aimed at improving the Competitiveness Diamond affecting the country’s tourism sector.
B.
Initiative summary The Competitiveness Unit will be created 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. To perform this initiative, the following actions must be performed, as described below:
C.
•
Install the Tourism Competitiveness Unit
•
Organise an annual Cyprus Tourism Competitiveness Forum
•
Support the use of best practices, new technologies, innovation, and partnerships
Key benefits of successful initiative implementation By promoting a stronger use of “best practices”, innovation, technology and partnerships, the island’s tourism industry will be able to deliver more value to the market at lower production costs, resulting in increased competitiveness and higher profits. This will be very positive for improving tourist satisfaction, attracting investment and improving the overall sustainability of the industry. Cyprus will become a highly competitive destination again in the European Mediterranean.
D.
Action plan Work stream 1. Install the Tourism Competitiveness Unit Establish a Competitiveness Unit inside the NTA with qualified personnel, resources, and leadership. The Unit will have a clear mandate and action plan and budget in order to improve Cyprus’ Tourism Competitiveness.
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Action 1.1 Set up the Tourism Competitiveness Unit Determine the organisation of the department, as well as its functions, roles, processes, and work procedures, as an integral part of the NTA, while ensuring that the organisational structure is aligned with the strategy. Each job post that is defined will have a description of its individual responsibilities and tasks, as well as the skills it entails. The organisation must include the following sub-units: •
Innovation and technology: This unit will be responsible for the widespread use of best practices and promoting the incorporation of innovative new technologies into the Cyprus tourism industry.
•
Tourism Management Information System (TMIS): The TMIS unit will be responsible for managing the tourism intelligence system, as well as promoting its use amongst the tourism industry.
•
Human Capital: Responsible for promoting the efficient management of human capital in order to improve tourism business productivity, by way of education and training actions.
•
Legal: Unit responsible for continuous improvement, streamlining the legal and regulatory framework and foreign capital investment.
Action 1.2 Staff and publicly launch the Unit The Department may be staffed partly by MECIT and CTO officers and employees, and partly by talented professionals from other public bodies, or from the private sector. Hiring a professional recruitment service and/or head hunters is recommended. Communicate the foundation of the Unit to all relevant stakeholders and make sure they understand the benefits derived for the tourism industry. Perform a kick-off event inviting industry members and both national and international media. Organise a series of follow-up events to network and engage with key stakeholders and potential investors.
Work stream 2. Organise the annual Tourism Competitiveness Forum The Forum will be an annual meeting, bringing together all of Cyprus’ tourism industry stakeholders (public, private & international stakeholders) with the objective of exchanging opinions and ideas, providing access to the latest know-how and making them aware of the latest innovations and technologies that could benefit both private and public members of the industry. The first Forum could consider the following issues: •
New methods to intelligently reduce hotel costs
•
Is it possible to create an “Uber” for tourist transport in Cyprus?
•
Best practices to address the emergence of “Airbnb”-esque formulas in Cyprus
•
Dynamic packaging and pricing technologies and how to take advantage of these
•
The global success of signature experiences
•
Etc.
This work stream includes 3 main tasks (technical, financial and marketing) to be performed by a dedicated team of 3-5 people.
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Action 2.1 Develop the technical components Develop the eventâ&#x20AC;&#x2122;s theme and programme, decide on the speakers and the panels, work sessions, etc. This includes identifying and enrolling leading experts or even creators of the recent greatest innovations and technology.
Action 2.2 Define the funding sources Determine the revenue and cost streams, including the contribution of sponsors, exhibitors, etc. Determine the cost of the entry per participant.
Action 2.1 Market the event Develop a smart marketing plan for the event. The use of new technologies, the Internet and social media will be key to this plan. Ensure there is great media coverage so that the event is given the importance it deserves.
Work stream 3. Directly support the use of best practices, new technologies, innovation, and partnerships This work stream consists of promoting the use of best practices, new technologies, innovation, and partnerships through 3 tools: research, executive education, and advisory services. Joint ventures, alliances and partnership hold further great opportunities to acquire knowledge and competitive advantages; as a result, these improve the competitiveness.
Action 3.1 Identify Best practices, top innovations, and new technologies They are the key to competitiveness. The Competitiveness Unit, with the support of an important educational institution in Cyprus will periodically identify key best practices, innovations, and new technologies in the different components of the value chain: operations, marketing, finance, management, quality, etc. The Unit will annually publish the results of its research with the best innovations and new technologies that have been identified, which will be presented at the Competitiveness Forum and posted on its website. Users will have to register in order to gain access to the publications and further contents in order to enlarge and control the network.
Action 3.2 Perform executive education The Competitiveness Unit will regularly organise education activities and events related to improving competitiveness; themed seminars & workshops, professional networking sessions, conferences, etc. Information for all events will be announced on the NTA website, where themes, speakers and schedules will also be available. Enrolment will be free of charge in some cases. A priority must be given to the use of â&#x20AC;&#x153;webinarsâ&#x20AC;? both from inside and outside Cyprus.
Action 3.3 Deliver advisory services Moreover, companies that show interest in implementing best practices, new technologies, innovation and partnerships initiatives to improve their competitiveness can request advisory service, which will be conducted by an external carefully selected consultant, which cost will be partially borne by the Unit. The Unit will identify through an open tender a list of 10 local business consultants to be appointed to join this programme.
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Main stakeholders and their roles Responsible
NTA Ministries and other Public Sector involved Private sector associations Private Sector
F.
358
Accountable
Consulted
Informed
x x x x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Install the Tourism Competitiveness Unit
Total (.000 €)
Budget per year 18 19
17
500
167
167
167
-
2.200
550
550
550
550
M M
5.850
836
1.671
1.671
1.671
H M
8.550
1.552
2.388 2.388
2.221
20
17
H
H
1.1 Set up the Tourism Competitiveness Unit 1.2 Staff and publicly launch the Unit Work stream 2. Organise the annual Tourism Competitiveness Forum 2.1 Develop the technical components 2.2 Define the funding sources 2.3 Market the event Work stream 3. Directly support the use of best practices, new technologies, innovation, and partnerships 3.1 Identify Best practices, innovations, and new technologies
top
3.2 Perform executive education 3.3 Deliver advisory services Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 18
19
Period 20
••• •• •• •••• •• • • •••• •• •• ••
21-25
26-30
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Reengineer framework
17
the
legal
and
regulatory
Initiative Owner: National Tourism Authority
A.
359
Priority Start-final deadline 1Y1Q-4Y3Q
Issue (s) to be resolved Cyprus’ current legal and regulatory framework is very uncompetitive in terms of supporting the sound and prosperous development of the tourism industry due to excessive (and mostly outdated) regulations, little transparency in some rules and procedures, a large diversity of stakeholders, slow processes and procedures, etc. Consequentially, the industry is affected in a very negative way. Within the current framework, it will be very difficult to attract the private investment (just under 18.000 million Euros) that the NTS anticipates and needs. The complex legal and regulatory framework has failed to prevent chaotic, uncontrolled, and disorganised tourism growth in many areas in Cyprus, which brings with it very high levels of visual pollution. The legal system has done nothing to prevent the existence of a large unlicensed accommodation offer which could reach the amount of 90.000 units, of which around 30% would be commercialised in clearly unfair competition with the licensed offer. A stable legal framework translating policies into a set of rules of law is necessary to sustain long-term growth. Frequent changes to the legal framework prevent investors from making long-term commitments. Nevertheless, effective enforcement of the law is equally important. In the case of the Cyprus tourism industry, changes must be processed in order to confront bureaucracy and complex procedures, leading to stabilisation and capital motivation.
B.
Initiative summary This initiative aims to develop a new legal and regulatory framework in the following way:
C.
•
Creating a law which regulates the entire tourism sector in an integrated way and addresses important matters that today lack a suitable legal framework.
•
Seriously simplifying and speeding up the current legal and regulatory processes for investors and business owners.
•
Making the framework transparent, easily accessible, and understandable.
•
Creating a “One-Stop Shop” or “fast-track” that facilitates company and tourist activity licensing.
•
Promoting the regularisation of unlicensed rooms.
Benefits resulting from successfully implementing this initiative The implementation of the National Tourism Law, simplification and greater transparency of the legal and regulatory framework, and the establishment of a “fast-track” for administrative and bureaucratic key procedures will significantly contribute to improving the country’s
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tourism Competitive Diamond, which will, amongst others, positively affect investment, innovation and attracting international partners and investors.
D.
Action plan Work stream 1. Elaboration of the Cyprus Tourism Law In general, and according to international best practices in countries where tourism is a key sector in the economy, Cyprus should have its own Tourism Law. The purpose of the law is to define a coherent organisational structure for public sector management of tourism in Cyprus. The National Tourism Authority’s first mandate will be to develop the umbrella Tourism Law seeking to regulate the entire industry in Cyprus. The new Tourism law will set the framework of assistance for tourism projects, provide a competitive environment for tourism enterprises, and regulate the relationship between service providers and consumers. It will outline the rights and responsibilities of tourism enterprises and tourists, applicable to dealings with both domestic and foreign tourists. The initiative aims to enable a conducive atmosphere for development in order for tourism to thrive across Cyprus, providing investment opportunities for Cypriots and foreigners alike. Furthermore, it will serve as an anchor and interaction between the different sectors within the industry, recognising the different stakeholders’ roles. The Tourism Law will also deal with the development of tourist destinations, both within cities and other places such as beaches, rural areas and TZNIs.
Action 1.1 Elaborate a comprehensive technical proposal for the Tourism Law •
Assess the current legal and regulatory framework to prepare for the new Tourism Law elaboration.
•
The National Tourism Authority will initiate/continue the review of current legal and regulatory framework requirements in order to identify improvement opportunities, and relevant concepts to be incorporated in the Tourism Law. The Cyprus Tourism Strategy legal and regulatory requirements, (i.e. TZNI, planning principles, etc.) will be taken into account to identify within enacted laws potential discrepancies or gaps to be amended. A final report will be elaborated to serve as the basis for discussion with the National Alliance for Tourism.
•
Consult interested stakeholders (especially the National Alliance for Tourism)
•
The National Tourism Authority, as the sponsor of the new Tourism Law, will establish it as a priority on the agenda for the National Alliance for Tourism (as they represent the key stakeholders of the industry). It will present the motivations to develop a Tourism Law to the private sector, the main outputs from the analysis of current legal and regulatory framework, as well as the Cyprus Tourism Strategy guidelines. An open discussion of the contents and issues to be solved will take place with all participants to agree on the fundamentals to begin the elaboration of the technical proposal.
•
Elaborate the technical proposal for the Tourism Law
•
The National Alliance for Tourism and the National Tourism Authority will engage in several workshops, individual meetings, and plenary sessions to elaborate and approve the sections of the technical proposal of the future Tourism Law. The Tourism Law should incorporate insights from the Cyprus tourism sector and international “best practices”.
•
Promote the technical proposal to be converted into a bill for the Tourism Law
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The technical proposal for the Tourism Law will be backed by the National Alliance for Tourism, and promoted along the Cyprus tourism sector. A proposal from consensus, with a wide support among the sector will easily move forward in the approval process without objections, and prepare the tourism sector for its implementation.
Action 1.2 Elaborate a comprehensive bill for the Tourism Law •
Elaborate bill from the proposal for the Tourism Law
•
The National Tourism Authority will deliver the technical proposal to the legal officers in order to elaborate a bill from the proposal. The new Tourism Law should fit within the Constitutional framework, the enacted laws by the House of Representatives, and EU directives. The bill for the Tourism Law will be accompanied with further amendments or abolishment of other enacted laws whose articles are likely to be incorporated into the new Tourism law.
•
Consult interested stakeholders (especially the National Alliance for Tourism) to validate the bill from the proposal for the Tourism Law
•
The legal officers elaborating the bill (based on the technical proposal) may introduce alterations to some aspects of the law based on legal constrictions. The National Tourism Authority will maintain the National Alliance for Tourism updated of the progress done, as well as requesting approval on modifications, or clarification on conflictive issues.
•
Promote the bill to be passed as the new Tourism Law at the House of Representatives
•
The bill for the Tourism Law will be backed by the National Alliance for Tourism and promoted to the Cyprus tourism sector. The bill from consensus, with a wide support among the sector, will give the mandate for approval to the Council of Ministers.
Action 1.3 Enact the Tourism Law •
Prioritise the new Tourism Law in the government’s agenda
•
The National Tourism Authority as the sponsor of the proposal will lead the drafting of the technical proposal and the bill with the consensus of the private sector. Advances done in the subject will be brought to the Council of Ministers to allocate the required resources to ensure its elaboration on time, complying with the legislative procedures.
•
Approve bill proposal for the Tourism Law (by the Council of Ministers)
•
The technical proposal agreed with the tourism sector and the following bill will be presented to the Council of Ministers. The National Tourism Authority will defend the Tourism Law to be enacted, given its purpose to become a key driver of the implementation of the Cyprus Tourism Strategy.
•
Pass the bill for the new Tourism Law at the House of Representatives
•
After the approval by the Council of Ministers, the Cyprus government should initiate the procedures to submit the bill to the House of Representatives. The bill is expected to be widely backed by the National Alliance for Tourism and the whole tourism sector, therefore the political negotiations following the mandate given by the sector would lead to the enactment of the Tourism Law.
•
Support the implementation of the Tourism Law with the elaboration of the regulations
•
The enactment of the Tourism Law will require the development of regulations in favour of ensuring its proper enforcement. The National Tourism Authority will evaluate the needs to develop the regulations for the pertinent on the sections of the law. The regulations should contain the measures to implement the law and the procedures to ensure the tourism sectors’ compliance.
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Work stream 2. Simplification of the current regulatory framework The current regulatory framework is broad, diverse, complex, managed by a multitude of different stakeholders, usually lacking transparency, etc. It requires a thorough review and simplification which would respond to unanimous requests made by the private sector and investors. This must take place as soon as possible without waiting for the National Tourism Authority to get up and running or enact the National Tourism Law. That said, once both things have happened, it would make sense to review the regulatory framework in order to adapt it to the NTA. Here, we propose the creation of 5 working groups that should address, from their respective positions, the needs, and opportunities to simplify / remove as many components of the current regulatory framework as possible. •
By way of example, below we illustrate some areas that require attention and provide some recommendations:
•
Land & Investment
•
Acquisition of Immovable Property by Non-Residents
•
Registration of Leases and sub-leases
•
Registration of Trusts
•
Admission of Foreign Investment
•
Cyprus Planning Laws and Streets and Buildings Legislation and Regulations
•
Catering and Entertainment Establishments
•
Hotels & other Tourist Establishments
•
Labour
•
Travel Agencies & Tourist Guides
•
Streets & Buildings Regulation Law
•
Planning amnesty
•
Etc.
Some recommendations for the new Tourism Law, which should aim at the sustainable development and management of tourism, protection and conservation of natural and cultural resources and facilitation of the involvement of the private sector and local communities in tourism development activities, are as follows: •
Town planning restrictions should be relaxed in conjunction with further requirements for Green areas and accessibility to enable investments/developments
•
The regulation and monitoring of tourist establishments should allow further flexibility and faster innovation. Authorities regulating these are spread out and often not aligned (town planning, local authorities, CTO, public health services, etc.) A single point of contact would ease administration’s burden on tourism businesses and coordinate the different public bodies.
•
Appropriate communication and involvement channels should be established to facilitate more interaction with trade unions so as to enable increased flexibility of the tourism industry and employment terms.
•
The CTO’s current budget is decided on a yearly basis, which clashes with tourism partners directing traffic in Cyprus’ mid to long-term view and creates uncertainty for them. If this
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is amended to be accommodated in 3 years, the NTA (former CTO) could optimise its marketing efforts during the months of January-February (where most pre-bookings for tourism are made). The Law should also aim to reflect the roles and responsibilities of all stakeholders, ensuring the rights of international/local tourists and the rights and obligations of participating businesses and tour operators. To accomplish this, we propose the following actions:
Action 2.1 Activate specific task forces for the different industries Accommodation, food & beverage, local transport, excursions & tours, local operators/DMCs, tourist attractions, beach concessions, resort developers, real estate developers, marina developers, golf developers, other if necessary. Each task force must be composed (suggestion) of the following members: Top representatives of the industry, representatives of the National Tourism Authority, representatives of other governmental bodies related to the industry, legal advisors and any others considered relevant.
Action 2.2 Identify opportunities and directions for the reduction, simplification, and elimination of elements of the legal and regulatory framework 2-3 task force meetings will be necessary to clarify opportunities and priorities.
Action 2.3 Integrate all contributions into a single well-organised document for distribution The lawyers assisting the task forces must put everything together in a well-organised and manageable way and conclude with practical statements on the opportunities and the directions to follow to implement them. We suggest publishing and selectively distributing at the very least a summary of this document, including the Interministerial Commission for Tourism, the Office of the Strategy Manager, and the chief of the National Tourism Authority.
Work stream 3. Create Public Electronic Platform for legal matters Creation of a public electronic depository of all effective tourism laws and regulations (available in Greek and English) to make them fully accessible to investors and operators will strongly contribute to a better, clear, streamlined and transparent legislative and regulatory environment. This will contribute to build a business-friendly tourism legal and regulatory environment to stimulate an increased investment and a more competitive tourism industry.
Action 3.1 Creation of the electronic platform Define electronic platform structure, design and functions and coordinate its creation. The use of Content Management/ and/ or Business Intelligence software is recommended.
Action 3.2 Upload the content and monitor usage Identify documents to be included and implement content upload. Launch the platform ensuring 100% functionality from the launch time and make other government departments, prospective investors, and tourism operators aware of the depository and its functions. Make sure to monitor the number of visits and the type of content consulted and by whom.
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Work stream 4. Create a One-Stop Shop/fast track for administrative processes The OSS will take care of nearly every aspect of licensing and investment and allow those seeking a tourism license or investing in Cyprus to arrange all formalities through the One-Stop Shop. This will include obtaining general information on how to enter the tourism sector, detailed information of the application and approval processes and other matters such as labour requirements, together with obtaining all documentation, permits and payment of fees. The fast track will provide a transparent and secure environment for investors, at the same time accelerating licensing procedures by shortening the time each takes.
Action 4.1 Establish the Investment and Licensing Unit inside the One-Stop Shop Cyprus should use the OSS which is being established within the Ministry of Growth for this fasttrack purpose. The Government should immediately go about creating an Investment and Licensing Unit within this body, comprising a team of expert financial and administrative civil servants.
Action 4.2 Identify where processes can be streamlined and establish new timeframes The team must begin by reviewing the overall time required in Cyprusâ&#x20AC;&#x2122; current licensing and investment processes, amongst others. See which stages can be amalgamated so that the process is more efficient and streamlined. In accordance with the discoveries that are made, determine deadlines and timeframes for each administrative process. THR recommends, for example, a-day period for licensing and prioritising settlements. This would aid in regulating unlicensed and commercialised tourist accommodation.
Action 4.3 Set up a technical platform for the One-Stop Shop This must be designed in a way which is transparent, fully functional, and interactive. The OneStop Shop website functionality must include the ability to respond to investor and tourism business inquiries as well as to receive feedback on the efficacy of the system. The website should be linked to that of MICET and the NTA.
Action 4.4 Publicise the One-Stop Shop Marketing efforts should be made so that stakeholders in Cyprus are fully aware of the OneStop Shop, the services it offers and how it can help them invest, obtain a license and with other administrative processes on the island.
Work stream 5. Facilitate regularisation of the unlicensed accommodation offer The private sector has illegally developed, expanded and modified tourism establishments on a large scale, which they partly attribute to the current difficulty in obtaining licensing and following proper procedure for developments. An escalating problem of illegal holiday rental properties could be solved, if changes to current legislation allowed more homeowners to easily register properties. Although renting out domestic properties in Cyprus to tourists is illegal, changes to the law could encourage homeowners to register with the National Tourism Authority (CTO). They can pay an annual fee to the NTA and declare themselves to the government.
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THR recommends the following: •
Create a mandatory register of legal accommodation units in Cyprus
•
Inform that the non-inclusion of an accommodation unit in this register will be penalised with a fine up to 20.000 Euros or with the closing of operations for two years.
•
Proceed to identify the non-licensed accommodation systematically by one or more of the following means: - Permanent scanning in Internet. It consists in searching for accommodation offers in Internet and checking whether they correspond to licensed keys or not. To do so we recommend outsourcing remunerated services partially according to the detected unlicensed units. - Set a network of 100 inspectors who, in pairs, inspect physically the buildings of the main touristic areas during the high season. This service can also be object of outsourcing. - Compel tourists in July and August (every 3 years) to show at the airport of departure a proof document of the accommodation used in which the service provider is clearly specified. - Invite the licensed offer to report, under a promise of total confidentiality, the nonlicensed offer engaging in unfair competition.
•
Publish in the main media of the island a list of the first 100 unlicensed accommodation as well as the penalties or bans imposed to each one.
•
Create a website where the temporary license can be obtained (pending a proper inspection) in 5 minutes and make the registration payment (temporary) in the Registry of Tourist Accommodation.
•
Inform tourists (perhaps by delivering a note at the immigration checkpoint) that accommodating in an accommodation unit without license is penalised with 1.000€, and remind them to demand an invoice to show upon departure.
Action 5.1 Clearly establish the rules and the progressive fines system Clearly establishing the rules that must be complied with, specifying the advantages of operating with a license and the risks of not doing so. Establishing a progressive fines system for unlicensed establishments.
Action 5.2 Proactively Identify the unlicensed offer Identifying the unlicensed and commercialised offer, by both periodic online checks as well as periodic inspections at random. Use media to highlight both, cases of unlicensed “businesses” successfully being transformed into registered enterprises and homeowners sanctioned through fines or other measures.
E.
Main stakeholders and their roles National Tourism Authority National Alliance for Tourism
Responsible
Accountable
x
x
Consulted
x
Council of Ministers
x
Cyprus House of Representatives
x
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Informed
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366
Operational Action Plan & Budget (for the 4 first years) Priority
Budget for four years
Work stream / Action Work stream 1. Elaboration of a Cyprus Tourism Law
Budget per year 18 19
17
1.200
800
400
-
-
H
H
1.970
328
1.313
328
-
H
H
20
17
1.1 Elaborate a comprehensive technical proposal for the Tourism Law 1.2 Elaborate a comprehensive bill for the Tourism Law 1.3 Enact the Tourism Law Work stream 2. Simplification of the current regulatory framework 2.1 Activate specific task forces for the different industries 2.2 Identify opportunities and directions for the reduction, simplification, and elimination of elements of the legal and regulatory framework 2.3 Integrate all contributions into a single well-organised document for distribution Work stream 3. Create Public Electronic Platform for legal matters
1.450
-
414
829
207
H
H
1.870
-
831
831
208
H
H
4.1 Establish the Investment and Licensing Unit inside the One-Stop Shop
H
NR
4.2 Identify where processes can be streamlined and establish new timeframes
M
M
4.3 Set up a technical platform for the One-Stop Shop
M
M
4.4 Publicise the One-Stop Shop
M NR
3.1 Creation platform
of
the
electronic
3.2 Upload the content and monitor usage Work stream 4. Create a One-Stop Shop/fast track for administrative processes
Work stream 5. regularisation of the accommodation offer
Facilitate unlicensed
H
H
5.1 Clearly establish the rules and the progressive fines system
H
NR
5.2 Proactively unlicensed offer
M
M
identify
8.360
M: Medium
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-
416
831
623
the
Total
L: Low
1.870
H: High
1.128
3.374 2.819
NR: No Risk
1.038
Timetable
Risk
Total (.000 €)
Years 18 19
•• • •• • ••• • ••
20
Period 21-25 26-30
• ••• • • •• •• • ••• • • •• • ••• • ••
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Annex: Suggested table of contents for the Cyprus Tourism Law Based on a comparative analysis of Tourism Laws, the table of contents for the Cyprus Tourism Law should include the following parts and components: TITLE I: GENERAL PROVISIONS •
Purpose and scope of the Law
•
Definitions
•
Objectives and promotion of sustainable tourism development
TITLE II: THE ROLE OF TOURISM ADMINISTRATION •
Tourism policy
•
Coordination between national, regional, and local administrations
•
Competences of national, regional, and local administrations
•
Advisory bodies
TITLE III: TOURISM RESOURCES •
Concept and types
•
Essential tourism resources
•
Tourism resources of local interest
•
Potential tourism resources
•
Protection and preservation duty
•
Promotion of tourism resources: means of promotion, Cyprus as a tourism brand
•
Urban consideration of tourism resources and respect for the environment
•
Cyprus Tourism Strategy: content, drafting and approval, revision and update
•
Tourist municipalities: concept, procedure, loss of municipality status
•
Municipalities and regions of tourist interest
TITLE IV: TOURISM AIMS AND THE TOURISM OFFER •
Tourism users: concept, rights, and duties
•
Guidelines for tourism’s administrative management
•
Tourism businesses: concept, classification, rights, and duties, right of access to establishments
•
Tourist accommodation establishments: Concept and general rules, classification, right of access, homes for tourist use & contractual freedom
•
Intermediary tourism business: concept, classification, travel agents and requirements, bonds
•
Tourist information: tourist offices
•
Tourist recreation centres
•
Tourism professions: regulated and occupational professional training, tourist information activities, tour guides
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TITLE V: LICENSING •
Concept and contents
•
Application for a license and Exemptions.
•
Registration and publication of a list of tourism operators.
•
Disqualification from obtaining a licence.
•
Duration of a license under this Law.
•
Revocation of a license.
TITLE VI: TOURIST AUTHORITIES AND TOURISM INSPECTIONS •
Competences: competent public tourism authorities in Government Administration, municipal competences, regional competences, rules of local and regional competences
•
Other regulations: Tourism Offices Abroad network, Tourism Register, interdepartmental coordination, inter-administrative relations
•
Ownership of the inspection authority
•
Inspection service functions
•
Accreditation and empowerment and authorities
•
Information obligation and duties
•
Inspection records and reports
•
Stakeholder obligations
TITLE VII: DISCIPLINE AND PENALTY SYSTEM •
Violations: concept, crime/misdemeanour offences, infringement classes
•
Minor offences
•
Serious infringements
•
Very serious offences
•
Reoccurrences
•
Liability
•
Sanctions: classes, criteria for calibration, graduation
•
Evidence and publication of sanctions
•
Returning of unduly received amounts
•
Closure of businesses, establishments, and tourist-used homes for breaching established requirements
•
Coercive measures
•
Prescription and expiration
•
Disciplinary proceedings: initiation, repair, precautionary measures, instruction, and closure
•
Recognition of responsibility and voluntary payment
•
Appeals
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Start human capital initiative Initiative Owner: National Tourism Authority
A.
369
Priority Start-final deadline 1Y2Q-4Y4Q
Issue (s) to be resolved In order to substantially improve its competitiveness, Cyprus’ Tourism Sector needs professionals with the education and skills required to lead continuous productivity, innovation and quality improvement processes as laid out in the strategy. Furthermore, a suitable and large basis of personnel is needed to correctly execute the processes that the envisioned improvement of the sector’s competitiveness requires. Older paradigms still often used in this field in Cyprus are not delivering the best results and we therefore recommend that industry players begin to change the current paradigm and work in the following directions:
B.
•
Respond to the need for more horizontal education and training. This should go above and beyond hotels; educating and training professionals in the fields of transport, non-hotel accommodation, reception, the diverse services involved in tourism sector support, excursions, wine and dine, activities and above all, new tourism experiences to be developed.
•
Solve the foreign labour problem. The Cyprus tourism sector needs to train significant volumes of imported labour, that often lack the skills to perform their required tasks to a high level, in a way which is both fast and efficient. For many new jobs, Cypriot labour should be targeted again.
•
Arrange much-needed education for executives, business leaders and functional managers. This is key as these are the only people who can lead the competitiveness of the destination in the long-term. The vast experience of executives often is related to the old tourism model of Cyprus, so especially here new know-how, methods, and approaches are essential for the success of NTS.
•
Make the educational efforts needed to transform gastronomy into a memorable experience. Cyprus must ultimately make an exceptional effort in the food service and gastronomy fields. Here, and with relative urgency, Cyprus needs professionals with the education and skills required to elevate the country’s gastronomical offer to the level of the best destinations and most of its competitors.
Initiative summary This initiative aims to address the issues detailed above by acting decisively in 6 different directions: upgrading and expanding the current education and training framework, installing a state of the art e-learning system to train both local and foreign professionals, delivering high-level executive education to managers and business leaders, educating and training top Government officials and, finally, educating F&B and fine dining industry managers, implementing a world-class and innovative formula. At the same time, the initiative combines actions aimed at improving education (knowledge) and providing training (skills required for a specific job). This is manifested in 7 work streams.
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It is important to note that the Action Plan acknowledges that the Cypriot tourism industry has large numbers of highly educated executives and managers, many of whom have been educated abroad. At the same time, their knowledge and experience is related to the old tourism model of Cyprus. Furthermore, it has been identified that there is a shortage of highly specialised experts (for example in the field of experiential resort design, tourism law and new tourism technologies). As an example of the proposed actions and their relevance, Work stream 1 addresses the need to update tourism industry executives and managers’ knowledge through a targeted “Cyprus Leadership Executive Education Programme” in areas such as the new frontiers of digital marketing, understanding the new consumer, etc. For executives and managers of the NTA, the recommended action (Work stream 2) is the launch a dedicated tailor-made executive education programme. This should deliver exceptionally high level knowledge based on the latest cutting-edge international knowledge instead of re-iterating old models, tools, and approaches. The programme for the NTA should focus on specialised topics in line with its mandate such as for example experience design, creation of sustainability indexes, marketing and branding, new technologies for tourism, managing carbon zero best practices, etc. Regarding the pressing issue of the current practices of employing foreign labour without the right human capital attributes, the Action Plan makes several relevant recommendations. Most important is the recommendation to sign a cooperation agreement with Lobster Ink (Work stream 6) and the entire Work stream 7. “Training and Education for foreign Tourism labour. Finally, the Action Plan provides a direct link between the level of personnel/type of job and the level and type of training need as follows:
Work stream Work stream 1. Cyprus Leadership Executive Education Programme Work stream 2. Executive Education Programme for NTA Work stream 3. Upgrade the tourism education system Work stream 4. Upgrade the tourism training system Work stream 5. Tourism Overseas Scholarship Programme Work stream 6. Innovative Online Learning Platform Work stream 7. Training and education for foreign tourism labour Work stream 8. Creation of Cyprus Culinary Centre
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NTA
Executives, managers
Supervisors, skilled and unskilled employees
Foreign labour
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371
Benefits resulting from successfully implementing this initiative The result of this effort will be an increased competitiveness of the nation’s tourism sector through much improved leadership, better skilled and motivated people, innovation and use of new technologies. Cyprus’ capacity to implement the service processes required to accommodate tourists, host exceptional experiences and provide other services will significantly raise by way of higher levels of productivity, quality, and efficiency.
D.
Action plan Work stream 1. Implement the “Cyprus Leadership Executive Education” programme This programme is aimed at executives, business leaders and functional managers of the industry in the broadest sense. The programme will deliver high-quality and horizontal education alongside specialised activities in specific sub-sectors: reception services, meeting organisers, fine dining restaurants, attraction management, etc. Effective leadership is key to the success of tourism, which can be achieved through the provision of high level executive education. This type of education equips tourism managers with leadership capabilities, international mindsets, and an ability to lead and innovate in order to increase tourism industry competitiveness. The annual programme will consist of five 1-day or half-day specialised seminars and five webinars on the latest industry matters. The Cyprus Leadership programme will include topics such as: •
New frontiers in digital marketing for tourism companies
•
Understanding the new consumer: The Millennials
•
Transforming your company into an experiential company
•
Technology that reduces costs without reducing client satisfaction
•
Successful strategies in family companies
•
The benefits of coopetition
•
New ways to recruit, train and retain motivated employees
•
Etc.
To implement this programme, the following actions must be performed:
Action 1.1 Create the “Cyprus Leadership” team A full-time team of two people can effectively deal with all aspects of this programme: those which are technical / academic, financial, marketing and public relations.
Action 1.2 Select a national academic partner and one or two international academic collaborators The partner and collaborators will be responsible for designing and implementing the yearly executive education programmes in keeping with the National Tourism Authority and the National Alliance for Tourism, plus any sponsors.
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Action 1.3 Seek programme sponsors Sponsors can be national or international companies (either tourism-related or not). An attractive benefits package must be designed for them. The option of financial support from international donors and cooperative bodies should also be explored. Finally, leading international companies can provide many experts free of charge if they are offered adequate compensation. For example, Barcelona’s IESE Business School organises the National Tourism Forum every year in collaboration with Cornell University’s Hotel Administration School, with the support of Exceltur (the National Tourism Alliance of Spain). It is attended by around 200 participants of the highest levels of Spain’s tourism sector.
Work stream 2: Launch an executive education programme at the NTA This work stream aims to provide officials at the newly created National Tourism Authority with a tailor-made educational programme to support their work in implementing the new tourism strategy.
Action 2.1 Programme structure and content The programme design should be closely aligned with the new Tourism Strategy, enabling officials to implement it effectively and effortlessly. Longer workshops could involve practical fieldwork as these significantly help participants to be able to put the knowledge they gain during the workshops into practice. The programme should consist of a series of 1 to 3-day workshops. It should be highly practical, covering topics such as: Tourism planning •
Destination master planning
•
Experiences design
•
Quality labels management
•
Attracting investors
•
Supporting MSME´s,
•
strategies to reduce visual pollution
•
creation of sustainability indexes
•
managing carbon zero best practices
•
innovation in tourism
•
new technologies for the tourism industry
•
promoting partnerships
•
development of management systems for destinations
•
marketing and branding
•
special interest tourism
•
crisis management and communication
•
etc.
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Action 2.2 Deliver a 2-year educational programme Develop and publish an International Request for Proposals, select a provider for the programme design and delivery and award the contract. The contract awarding should consider: •
The capacity of the provider to align the education programme with the new NTS
•
The extent of international experience of the provider
•
The level of knowledge of Cyprus as a tourism destination of the provider
Deliver the programme according to a set timetable in a highly interactive manner. After each workshop, participants should complete a brief evaluation form so that consecutive workshops can perfect the workshop approach and methodology.
Work stream 3: Upgrade the existing tourism education system This work stream is designed to ensure that the system will expand the programmes and courses to adequately address the full spectrum of tourism professions (not just those in hotels), including newly emerging ones. Furthermore, it will strengthen faculty standards, increase industry relevance, and promote the approval of new pedagogical approaches and methods of delivery.
Action 3.1 Create a Centre for Excellence with a world-class practical training facility Create a flagship Centre for Excellence in tourism education & training in cooperation with an internationally renowned university, such as the Hong Kong Polytechnic University, George Washington University, Surrey, or Cornell University for instance. •
The Centre for Excellence should actively cooperate with major international tourism companies in a spectrum that goes far beyond the hotel sector. Such cooperation should be fostered for example with TUI, Trip Advisor, American Express, Booking.com, etc.
•
Furthermore, it is also important to ensure that the Centre of Excellence has a world-class practical training facility, following the example of the teaching and research hotel ICON of the Hong Kong Polytechnic University. This goes beyond the traditional model of a training hotel in that it commercially operates as an upscale hotel, is financially viable and it serves as a laboratory for international standard research and innovation.
•
Set up an International Industry Advisory Board inviting leading tourism companies and experts from around the world to provide cutting-edge industry input into curriculum development. The optimum size of a well-functioning Industry Advisory Board is between 5 to 10 members. Members should be international industry leaders from leading tourism companies, such as those that are WTTC Executive Committee or representing wellchosen leading international or national companies.
Action 3.2 Create programmes and courses to support the new tourism jobs, product and experiences Cyprus needs Examples: Digital Marketing for Tourism Companies, buffet service technology, cycling guides, experience design, dietetic food for hotels and restaurants, revenue management, Customer Relations Management, Cost reduction technologies, etc. These programmes and courses should be developed by the Centre for Excellence in collaboration with leading international universities, companies and organisations and should also include high-level lectures delivered by top international industry experts via video conference. The programme development is to be reviewed regularly in order to ensure Updated version 23.03.2017
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alignment with the implementation programme of the Cyprus Tourism Strategy and in response to and anticipation of changes in the internal and external environment.
Action 3.3 Develop world-class educational & training materials and support This includes teacher and student manuals, films, webinars, exercises, tests etc. to be used internally in the Centre for Excellence. More importantly, these will be used by other centres and especially, by tourism businesses in Cyprus in order to train their employees and internal trainers. All of this material must be developed in order to be incorporated into advanced e-learning systems. Benchmarks are The American Hotel & Lodging Educational Institute, Lobster Ink and supporting material developed by Canada for its Signature Experiences.
Action 3.4 Deliver a train-the-trainer programme for tourism educators The Centre for Excellence is to provide ongoing curriculum support to other universities through a series of targeted workshops and ongoing advisory services. These include: •
Advisory on new programmes and curriculum development
•
Support when setting up international cooperation with leading tourism companies
•
Advisory on new delivery methods and pedagogical tools
•
Advisory on developing effective internship programmes
•
Etc.
Action 3.5 Re-engineer internship and graduate management training provision Identify leading international and national tourism companies to cooperate with. Prepare meaningful and binding agreements with clear roles and incentives and maintain a very rigorous student and graduate progress monitoring system. Set up an attractive incentive system for students and graduates to participate in. A highly effective example is the 1-year paid Work Placement system offered by the University of Surrey, UK.
Action 3.6 Develop and manage specialised tour guide education and licensing There are currently no specialised tour guides in Cyprus. For example, there are no trained adventure guides or guides for bird watching. Providing specialised training and certification could support the development of special interest tourism such as hiking, cycling, bird watching, wine tasting, etc. This will help to expand the season, enhance visitor experiences, and increase revenues from tourism. Considering this, the existing law on guided tours will need to be modified.
Work stream 4: Upgrade the existing tourism training system Remove current deficiencies in the tourism training system performance, focusing on improving rather than increasing the existing provision of traditional training. This work stream is designed to ensure that the system will be modernised and innovated by embracing new forms of training, focusing on the entire tourism sector beyond hospitality. It will do so by including innovative modes of training delivery, improving the capacity of the existing technical schools, strengthening the curriculum, and developing stronger links between training institutions and the tourism industry.
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Action 4.1 Create a Centre for Excellence with a world-class practical training facility Create a flagship Centre for Excellence for tourism training in active cooperation with major international tourism companies such as TUI, Hyatt Hotels Corporation, American Express Company, Disneyland Inc. etc. When creating the Centre for Excellence, the following actions should be performed: •
Creation of a portfolio of short, innovative face-to-face and online training programmes.
•
Organise webinars and guest seminars from top industry leaders.
•
Review and re-development of practical training system.
•
Review of internship arrangements.
•
Develop reciprocal faculty exchange.
•
Set-up work shadowing of industry professionals by faculty.
•
Initiate joint applied research projects.
Action 4.2 Deliver a train-the-trainer programme to tourism trainers The Centre for Excellence is to provide on-going curriculum support to the other institutions through a series of targeted workshops and on-going advisory. These are to address: •
Embrace new pedagogical tools and form of delivery including on-line education in cooperation with top international training institutes and leading firms.
•
Deliver state-of-the-art practical training.
•
Production of training materials.
•
Etc.
Action 4.3 Set up a formal Industry Advisory Board for the Centre for Excellence Set-up an International Industry Advisory Board involving leading tourism companies and experts from around the world to provide cutting edge industry input into curriculum development. The main role of the Advisory Board is to advise on current and future trends in the tourism industry that need to be addressed by training provision. The optimum size of a well-functioning Industry Advisory Board is between 5 to 10 members. Members should be international industry leaders from leading tourism companies such as those that are WTTC Executive Committee or Global Members or representing a well-chosen leading international or national company.
Action 4.4 Re-engineer internship provision Identify leading international and national tourism companies to cooperate with. Prepare meaningful and binding agreements with clear roles and incentives and ensure a very tight student and graduate progression monitoring system. Set-up an attractive incentive system for students and graduates to participate. A highly effective example is the 1-year paid Work Placement system by the University of Surrey, UK.
Work stream 5. Create a Tourism Overseas Scholarship Programme Enhance the tourism education system with a structured and strategic overseas education programme. This will provide top and highly specialised professionals for Cyprus who, given the small volume and high cost, could not be educated to such standard in Cyprus.
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The essence is to set up a dedicated Tourism Overseas Scholarship Programme in partnership with top international universities in the wider areas of tourism to create a critical mass of professionals with top international education.
Action 5.1 Design scholarship application and award mechanism The professional matching of university programmes and candidate profiles is crucial to ensure that the chosen programme fits fully the aspirations and capabilities of the candidates. These also need strong guidance in this as they are typically not aware of the comparative merits of the different study programmes and universities.
Action 5.2 Identify top international universities and companies for cooperation (tourism and non-tourism) and launch the programme The choice of universities is crucial for the success. Only top universities should be chosen and the choice should be periodically reviewed. Some suggested universities to consider are: Cornell University, Virginia Tech, Ă&#x160;cole Hotelier de Lausanne, ESADE Business School, Hong Kong Polytechnic University, or University of Queensland. Launch and manage programme, ensure high visibility within Cyprus.
Work stream 6. Operate an innovative online learning platform Transform the continuous professional development system in the tourism industry in Cyprus through offering a new and innovative mechanism that transmits the best international standards in a highly motivating and cost effective way. The essence of the work stream is an online learning platform using a highly innovative and successful international model. Well-designed, attractive and motivating online courses can revitalise continuous professional development and improve staff attitudes. The courses can reach large numbers of existing and prospective employees in a highly cost effective way whilst ensuring the promotion of highest international standards. It is recommended to purchase existing courses from companies such as Lobster Ink, an innovative education company specialising in the hospitality industry.
Action 6.1 Sign cooperation agreement with Lobster Ink Sign a well-thought cooperation agreement with Lobster Ink for course development, adaption, translation, and delivery. The courses should be offered in both Greek and English and could also be offered in German to cater for both Cypriot and foreign employees and to further support language proficiency.
Action 6.2 Select courses for adaptation and translation, market and deliver the programme Review the available course portfolio, identify courses that address quality and skill gaps. The courses can be rolled-out in a phased manner. Market the platform to have 2.000 users per year. This will allow to make a transformative change in the industry in terms of volume and quality of skills and staff motivation Subsidised course delivery can be managed in cooperation with Lobster Ink under contractual agreements.
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Action 6.3 Set up a Tourijobs platform with jobs vacancies of the sector This action will establish “Tourijobs Cyprus,” a dynamic employment platform specialised in tourism jobs. “Tourijobs Cyprus” will operate as an online platform that allows job postings by employers and enables job seekers to perform job searches by keyword, location, professional level, level of education, length of experience, contract type, working hours etc. Furthermore, education and training providers will be able to post and job seekers can search for education and training opportunities. Regular email alerts will be sent to registered job seekers and mobile apps will enhance the access to the platform. “Tourijobs Cyprus” will operate as an IT platform and also serve as a tool for organizing and promoting regular events such as job fairs, education seminars, events which will showcase Cyprus role models, competitions, and awards. “Tourijobs Cyprus” will assist local job seekers and serve as a national job market, rather than acting as an international recruitment platform.
Work stream 7. Training & educating foreign tourism labour This work stream is designed to ensure that the system will widen the programmes and courses to adequately address the full spectrum of tourism professions (and not only hotel ones) including newly emerging ones. Furthermore, it will strengthen faculty standards, increase industry relevance, and promote the approval of new pedagogical approaches and delivery methods. Over the next few years, the Cypriot tourism sector should strive to increase employment amongst national youths. However, this will not be enough and hence the island should probably import foreign human resources. This will pose two problems: a lack of skills needed for jobs in the tourism sector and often, a cultural gap in terms of values and attitudes with regards to the tourist. Cyprus should prepare to train between 1.000 and 2.000 people per year over the next 15 years, focusing on two major aspects: skills and behaviour.
Action 7.1 Train foreign labour so they quickly gain specific skills The “skills” component can be resolved by way of short training programmes of between 40 and 100 hours duration - if the Centre for Excellence has already developed the programmes and trained suitable teachers. This shouldn’t be such an issue for jobs in hotels as there is currently excellent material that can be used, but it is more complicated for jobs in other tourism companies which will require more effort.
Action 7.2 Educate foreign employees in behavioural attitudes and values The “behaviour” component calls for a more sophisticated process as it often involves changing employee behaviours which in turn, demands a prior knowledge of attitudes and conduct resulting from certainties and values acquired in employee countries of origin. We therefore recommend that the Centre for Excellence develops pedagogical material and trains teachers so they can run a special 40-hour programme training groups of between 12 and 20 people on: the importance of tourism, how to treat tourists well, teamwork, respecting your superiors, proactive problem-solving, smiling and friendliness, etc. This programme should be built around a 60-minute film which demonstrates real-life professional situations which can then be discussed and commented upon by the group Updated version 23.03.2017
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before proceeding to brief role-playing sessions. This programme can be carried out in public spaces or directly in tourism companies that can hold a certain number of people. A benchmark example: the “Hospitality is the Key” programme developed by the Ministry of Tourism of Spain.
Action 7.3 Identify and recruit employees abroad We strongly recommend running an ambitious programme to identify and recruit people abroad in order to substantially increase the professionalism and behaviour of foreign workers in Cyprus. This programme consists of: •
Identifying foreign human resource needs in collaboration with the sector five years in advance.
•
Identifying 3 recruitment source countries and making immediate contact with the Embassy and a local human resources company.
•
Advertising job vacancies available in Cyprus including all work conditions and salaries. Create a special website for this programme.
•
Launching a pre-recruitment and recruitment process that includes, above all, an analysis of candidates’ attitudes through specific psychological tests.
•
Formalising preliminary agreements with tourism companies in Cyprus.
Work stream 8. Create the Cyprus Culinary Centre Spearhead culinary innovations and improve the quality of the culinary and wine offering in Cyprus through the creation of a Cyprus Culinary Centre integrating the current Cyprus Chefs Association that has already started to work in that direction. The club will be initiated by the public sector, but driven by its private sector members. Generally, restaurants are offering modern fusion type cuisine, merging traditional Cypriot dishes and wines with elements from international cuisines, but there is a prevalence of international standard culinary innovations, and the use of local products is relatively low. Given the importance that gastronomy has taken in recent years, it has become an indispensable tool to acquaint visitors to the culture and lifestyle of a destination. Although Cyprus prides itself on its food, wine and the welcoming atmosphere at its traditional taverns, its food is not adding sufficient value right now to its tourism product. Gastronomy represents therefore an excellent opportunity to revitalise and diversify the tourism offer and strengthen economic linkages, by developing a much more sophisticated food and wine offering in Cyprus.
Action 8.1 Conduct assessment of Cyprus cuisine Identify best practices of other destinations where gastronomy and wine have gained worldwide recognition and become a key differentiator of its tourism offer (such as Bordeaux, the Basque Country or Sicily). On the basis of this, conduct an in-depth analysis of the situation of the Cyprus food and wine. The purpose is to identify key success factors, successful products, and gaps in the current provision, including the gaps in techniques, ingredients, and skills. The assessment should include extensive interviews with clients and customers regarding their experiences, expectations and suggestions regarding Cyprus cuisine and culinary offering.
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Action 8.2 Select a top international institutional partner It is recommended to establish an active cooperation with an international culinary centre which could involve professional experience exchange, joint events, consultancy arrangements etc. A possible suitable partner could be the Basque Culinary Centre which operates very successfully and with high visibility in Bilbao, Spain (www.bculinary.com) Working with the Basque Culinary Centre can provide the following benefits: •
Knowledge transfer regarding the creation of a Culinary Centre in Cyprus.
•
Collaboration in the assessment of Cyprus cuisine which needs an international perspective.
•
Collaboration on educational and training programmes (Masters, Bachelor, executive education, short courses etc.)
•
Joint events such as conferences, Master Classes, culinary competitions, etc.
•
Access to an extensive high level of network of top chefs and culinary experts.
•
Access to an extensive network of companies from the food and beverage industry.
Action 8.3 Appoint an International Advisory Board of Chefs An International Advisory Board involving famous chefs and nutrition experts should be set up with the objective of providing both international prestige and recognition and high level strategic input. For instance, the Advisory Board (named as International Council) of the Basque Culinary Centre includes such famous chefs as: Joan Roca, Ferran Adriá, Heston Blumenthal, etc.
Action 8.4 Build and operate the Centre After the development of the Business Plan, build centre, appoint its staff, and operate the centre. It is important to understand that the purpose of the centre is not to be just another culinary school but rather to carry out the following functions at cutting-edge international level: •
Promoting a culture of quality and innovation in food and wine.
•
Researching and developing preparations, etc.).
•
Documenting and generating knowledge on topics of gastronomic interest.
•
Training of chefs and other culinary professionals.
•
Technically supporting restaurants and wine tourism businesses.
gastronomic
applications
(concepts,
techniques,
It is important that the centre should be housed in a dedicated and iconic building. This could be either purpose-built or located in a renovated old Cypriot-style house. The centre should have an active collaboration with another centre(s) and the Higher Hotel Institute, Cyprus.
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Main stakeholders and their roles Responsible
F.
380
Accountable
Consulted
National Tourism Authority
x
Ministry of Education and Culture
x
x
Ministry of Labour and Social Insurance
x
x
Informed
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Implement the “Cyprus Leadership Executive Education” programme
Total (.000 €)
17
855
257
Budget per year 18 19
342
257
20
-
17
H M
1.1 Create the “Cyprus Leadership” team 1.2 Select a national academic partner and one or two international academic collaborators 1.3 Seek programme sponsors Work stream 2. Launch an executive education programme at the NTA 2.1 Programme content
structure
1.260
-
720
540
-
H M
1.280
-
256
512
512
M M
and
2.2 Deliver a 2-year educational programme Work stream 3. Upgrade the existing tourism education system 3.1 Create a Centre for Excellence with world-class practical training facility 3.2 Create programmes and courses to support the new tourism jobs, product and experiences Cyprus needs
3.5 Re-engineer internship and graduate management training provision
Period 20
1.540
-
308
616
616
M M
21-25
26-30
••• • •• •• ••• • • • •• • • ••• •
••
3.6 Develop and manage specialised tour guide education and licensing
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19
• •• ••
3.4 Deliver a train-the-trainer programme for tourism educators
4.1 Create a Centre for Excellence with a world-class practical training facility
18
•
3.3 Develop world-class educational & training materials and support
Work stream 4. Upgrade the existing tourism training system
Timetable Years
••• •
CYPRUS TOURISM STRATEGY
PrioRisk rity
Budget for four years
Work stream / Action
Total (.000 €)
Budget per year 18 19
17
920
-
184
368
368
M L
1.240
-
248
496
496
H
450
-
90
180
180
2.490
-
498
996
996
10.035
257
2.646
3.965
3.168
17
4.2 Deliver a train-the-trainer programme to tourism trainers 4.3 Set up a formal Industry Advisory Board for the Centre for Excellence 4.4 Re-engineer internship provision Work stream 5. Create a Tourism Overseas Scholarship Programme 5.1 Design scholarship application and award mechanism 5.2 Identify top international universities and companies for cooperation (tourism and nontourism) and launch the programme Work stream 6. Operate an innovative online learning platform 6.1 Sign cooperation agreement with Lobster Ink 6.2 Select courses for adaptation and translation, market and deliver the programme 6.3 Set up a Tourijobs platform with jobs vacancies of the sector Work stream 7. Training & educating foreign tourism labour 7.1 Train foreign labour so they quickly gain specific skills 7.2 Educate foreign employees in behavioural attitudes and values 7.3 Identify and recruit employees abroad Work stream 8. Create the Cyprus Culinary Centre 8.1 Conduct assessment of Cyprus cuisine 8.2 Select a top institutional partner
international
8.3 Appoint an International Advisory Board of Chefs 8.4 Build and operate the Centre Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years
20
H
381
18
19
Period 20
• •• •• ••• ••• •• ••• • •• •• ••• •• •• • ••• • •• • •
21-25
26-30
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Run airline partnership initiative Initiative Owner: National Tourism Authority
A.
382
Priority Start-final deadline 1Y1Q-4Y4Q
Issue (s) to tackle There is a clear flight problem in almost all interesting potential markets, in Europe and outside, except for the British and Russian markets. Open skies, China inbound agreement, etc. – legally/administratively many major hurdles have been removed by the Cyprus government and Hermes Airports. Even more bilateral agreements, especially outside Europe, are on the agenda but, in general, the flight matter is not a legal but a demand challenge. The interviews with tour operators in 5 potential key markets clearly showed: one of the major reasons to not include (more) Cyprus in their portfolios is the lack of flight connections. Also, marketing activities directed at foreign individual travel or organised special interest tourism are not effective when flight connections are lacking, too long/inconvenient or too expensive.
B.
Initiative summary The initiative is all about creating demand or demonstrating that demand will come with improved airline capacity. •
An Air Traffic Development Unit (ATD in the following) will be created in the NTA to align air traffic development to the new tourism strategy and increasingly create synergies between air traffic and tourism sectors.
•
The Air Traffic Development team of the NTA will win trade partners in carefully prioritised catchment areas in order to create and demonstrate attractive demand potential to the airlines. Special Interest Tour Packagers will be preferred to stimulate all-year round traffic. All this must happen in close collaboration with the Market Partnering unit
•
Further opportunities outside Europe will be carefully analysed and pursued, in addition weaknesses of competing airports in the regions will be identified to define and elaborate potential competitive advantages. Well-targeted creative lobbying approaches to high level executives top off the initiative.
•
Everything happens with a mid-term perspective in mind, meaning heavy subsidising is acceptable when routes have a high probability to be profitable without subsidies within 1-2 years. This probability depends on follow-up business from started trade agreements and from NTA/government commitment and budgets to create additional demand through effective B2B and B2C marketing measures.
•
Strategic partnerships will be targeted with one or two of the new airline players in Cyprus, such as Cobalt or S7/Charlie Airlines. The new tourism strategy with allocated marketing budgets will be of great help demonstrating such commitment.
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C.
383
Benefits resulting from a successful initiative implementation This initiative is key to the strategic tourism development of Cyprus as the country is totally dependent on air traffic as mean of transportation. Major benefits generated by this initiative’s implementation will be an increased air capacity from/to selected catchment areas and a subsequent increase in tourism demand. Additional benefits are as follows:
D.
•
Unlocking of new catchment areas in strategic markets, broadening geo-market portfolio.
•
Better seasonal spread of flights and tourism activity across the year.
•
Smaller operators (usually the case in Special Interest tourism) will be able to include Cyprus in their portfolios. Alone they do not have the power to take influence on airline routes or charter planes themselves.
•
Stimulation of Special Interest travel resulting in profitable local business opportunities. Subsequently, also better geographic distribution of the tourism activity.
•
Increased Foreign Independent Travel flows and
•
Improved image/lobby of Cyprus among airline executives.
Action plan Work stream 1. Activate Air Traffic Development Unit and a Tourism Connectivity Committee (TCC) A small Air Traffic Development (ATD) unit will work closely with Hermes Airports to develop strategic and tactic business/air traffic approaches in collaboration with the DCA (Department of Civil Aviation). The new unit will also be the much needed “bridge” to the private tourism sector for coordinated approaches, both in and outside Cyprus.
Action 1.1 Set up Air Traffic Development team The mission of this team is to “Maximise synergies between strategic tourism development and air traffic expansion”. A small yet powerful team of two air traffic/tourism experts and Hermes Airports should form the new unit. Those experts could be recruited from current CTO staff, from outside the public sector or be a mix of both. Next to the know-how of both air traffic and tourism businesses, excellent negotiation and networking skills are key. The team should report to the top level of the NTA and work in close collaboration with the Market Partnering unit.
Action 1.2 Build Tourism Connectivity Committee (TCC) A Tourism Connectivity Committee will be the key platform for a constructive bridge function between air traffic and tourism sectors for a holistic development approach. The committee shall be led by the new ATD team and meet frequently (at least every 2 months) to discuss and decide about strategic and tactic marketing and partnership approaches, as well as policy issues and challenges. Other members of the TCC should include the following:
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Department of Civil Aviation
•
Selected industry associations (especially hotel associations)
•
Market Partnering unit of the NTA
384
Work stream 2. Prepare demand opportunities There is a lot of preparatory work to be done before approaching airlines. All actions serve the sole purpose of creating trust in the rising demand scenarios following the new tourism strategy. LOIs of several tour operators incl. pax volume estimates, in the light of a better seasonal traffic balance (especially Special Interest TOs), should be achieved and later be used in negotiations with airlines. Branding and especially marketing efforts following the strategy must be broken down into catchment areas and included in the pitches as well. Each possible route in strategic markets and respective potential airline needs and interests must be studied in-depth for designing individual winning pitches for each airline target.
Action 2.1 Perform strategic opportunity analysis Market by market (as prioritised in the market strategy) all major/airports and their catchment areas should be analysed based on different factors: number of people living in the catchment area, representation of strategic target segments, current connections to Cyprus vs. connections to main competitors, present airlines models and companies, local trade connections, etc. Different kinds of possible airline partnerships should be considered, from charter to low-cost carriers. Various possible roles of Cyprus’ airports should be considered, too, e.g. point-topoint, transfer/stop-over, or even fifth freedom, with the respective impact on tourism in mind. Competing/nearby airports in the region, e.g. Istanbul and Athens, should be studied indepth, in order to detect politic, economic, operational, or other weaknesses Cyprus could use to build a competitive advantage and replace certain business currently using those airports. The possible competitive advantages could be related to service cost, handling time or quality, connecting routes, legal issues, and certain incentive schemes, for example. After having elaborated selected competitive advantages, the airlines crucially benefitting from those advantages should be declared strategic targets. The result of this action must be a prioritised list of target airports and respective airlines to approach.
Action 2.2 Win trade partners’ commitment One of the keys to success in negotiations with airlines is presenting credible passenger estimates based on tour operator commitments. The ATD team will join the Market Partnering unit in their efforts to close partnerships with selected trade partners. The aim here is to break the vicious circle of tour operators not signing any agreements without sufficient air connections and airlines not committing themselves without sufficient organised tourism business. The process is to contact TOs first, present the strategy, the product, the concrete opportunities, and possible marketing support schemes to raise their interest. The interest then should be fixed in LOIs stating estimated/potential pax numbers per month once air traffic is set up. Updated version 23.03.2017
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As all year-round traffic is another important factor in winning airline commitment, Special Interest TOs should be targeted especially. To further specify: pick tourism types first, that could generate interesting volumes to achieve critical mass. Prestige product types/TOs with rather low volume can be integrated later. This prioritisation should also be considered for the Market Partnering strategy. In our opinion in a case like Cyprus, an island state, a country with a unique opportunity window as other Eastern Mediterranean former destinations are almost taken off the market, a strategic investment can take longer than 1-2 years only. Maybe it is not necessary, but a step-by-step reduction of subsidies aligned with overall marketing activities over a number of years, e.g. 3 or 4 years, can make a lot of sense. As an example of this commitment, the Spanish airline Vueling does not request any fee per carried passenger, but it participates in promotional programmes financed in cooperation with the destination.
Action 2.3 Approach non-European airlines Non-European markets: Thanks to its geo-location Cyprus hosts the closest international EU airports for many points of departure in the Middle East, Eastern Africa, or Southern Asia, for example. Two major approaches can be considered to stimulate business here: airline focused and tourism focused. â&#x20AC;˘
Airline focused approach: Cyprus could become a transfer point for airlines connecting countries like India and Morocco, for example. Also, further bilateral, and even fifth freedom agreements could be targeted, especially for airlines from the Middle East/Arabian Peninsula. The geo-location advantage should be accompanied by 1 or 2 significant other competitive advantages (again: study the competition in the region). The opportunities can be discovered only in an in-depth study of airlines and routes in the surrounding Non-European regions.
â&#x20AC;˘
Tourism focused approach: this approach requires alignment of product and flight connections as certain types of Non-European tourists look for other type of products than Europeans. Cases to study are Zell am See/Austria, Beirut/Lebanon, Costa Esmeralda/Sardinia, and Marbella/Spain, catering all too wealthy families/travellers from the Arab Peninsula. Again, close collaboration with the Market Partnering unit and especially the Product Development team is necessary.
Work stream 3. Execute the airline partnership programme Creativity is a key concept in the new approach to airline partnering. Special packages and deals will be negotiated and promoted in selected catchment areas. Any opening of a new departure city, which has potential to develop into a profitable route within 1-2 years thanks to increased branding and marketing efforts, can be subsidised even heavily taking a midterm ROI into account. As far as possible within the legal EU frameworks, incentive schemes should be more flexible regarding both incentive type and amount, and prepared case by case. Negotiate with the new airlines in Cyprus and convince them to fly to Cyprusâ&#x20AC;&#x2122; strategic key markets instead of targeting the highly-contested UK, Greece, Russia, or Israel routes. Creative lobbying will complement the aforestated efforts in a subtle way.
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Action 3.1 Push private sector engagement Again, in collaboration with the Market Partnering unit and private sector partners (above all hotels), the ATD team should offer selected airlines creative tourism packages, especially for the mid- and low seasons. The packages can be covering special weekends per market to start with, but above all should have strategic/mid-term character. For example; 3-generation family groups receive a special deal when flying between October and May and booking certain hotels/chains. Also, concerted actions via the associations or on destination level (e.g. Pafos) are an option. To be negotiated with the private sector. It is important to not only assure the product availability, but also its promotion, again through trade partnerships (certain travel agencies in the chosen catchment areas) and/or own promotion activities of the NTA. Once again, the philosophy is: if opening a new route this way allows for a scenario creating self-sustained/profitable air traffic 1 or 2 years later thanks to Cyprus’ improved branding and marketing, heavy subsidisation from both NTA and private sector should be perceived as sustainable mid-term investments.
Action 3.2 Pursue strategic airline partnerships The existing airline incentive schemes and its targeting should be revised in the light of the following question: •
Which creative measures can be applied to increase the short-term subsidisation, either directly via reimbursements or other financial measures (tax alleviations, airport charges, service agreements with local suppliers, etc.)?
•
Which catchment areas & airlines will benefit from increased marketing activities following the new tourism strategy, and thus have the potential to generate critical mass of both tour operators driven and individual travel, 1-2 years after a “subsidised start”?
It is recommended to not use only one standard approach (many destinations solely focus on direct reimbursement), but to be creative and cater to the specific needs/interests of each target airline, also adapting the level of subsidisation case by case. Financial support in its most direct sense of Euro/pax for strategic routes should be minimised, other forms like 50/50 funded marketing actions, for example, shall be preferred. Another lever could be the airport tax, claimed as being too high by tour operators, for example.
Action 3.3 Nurture national carriers Integrate the new airlines in Cyprus, such as Cobalt and S7/Charlie Airlines, into strategic source market development. Elaborate credible growth scenarios (again together with trade partners) and incentive schemes to convince them to place their new capacities in the strategic source markets of Cyprus, like Germany, France or in Nordic countries. Make use of the excellent connections between Hermes Airport and these airlines and of the price pressure these airlines (plus the other new starters like Blue Air or TUS Airlines), are facing when investing all in the same markets such as UK, Russia, Greece, or Israel.
Action 3.4 Perform creative industry lobbying Lobbying is a complementary activity, but its effect should not be underestimated. It will be difficult to create another airline industry mega-event, but there are many other ways to create awareness of Cyprus among airlines. Example: create highly exclusive top level executive events, e.g. bringing together airline executives from Europe, Middle East, and Africa. Cyprus has a clear advantage here thanks Updated version 23.03.2017
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to its geo-location being on the crossroads of those regions. Investigate relevant topics for such micro-events and win 1 or 2 of the world’s best experts to join. Collaborate with the very best hotels, e.g. the Thanos group. Pay for everything including family programme etc. Provide for at least one outstanding experience making those VIP guests fall in love with Cyprus. Try to establish events that can be repeated year after year. At selected occasions ATD would join the parties to network and promote Cyprus in a welltargeted non-intrusive way.
E.
Main stakeholders and their roles Responsible
National Tourism Authority
F.
Accountable
Consulted
Informed
x
Hermes Airports
x
Department of Civil Aviation
x
Market Partnering Unit
x
Industry associations
x
x
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Activate Air Traffic Development Unit and a Tourism Connectivity Committee (TCC)
Total (.000 €)
Budget per year 18 19
17
750
429
321
-
-
M M
660
83
330
248
-
H M
2.390
-
478
956
956
H M
3.800
511
1.129
1.204
956
20
17
1.1 Set up Air Traffic Development team 1.2 Build Tourism Committee (TCC)
Connectivity
Work stream 2. Prepare demand opportunities 2.1 Perform strategic opportunity analysis 2.2 Win trade partners’ commitment 2.3 Approach non-European airlines Work stream 3. Execute the airline partnership programme 3.1 Push private sector engagement 3.2 Pursue strategic airline partnerships 3.3 Nurture national carriers 3.4 Perform creative industry lobbying Total L: Low
M: Medium
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H: High
NR: No Risk
Timetable Years 18
19
Period 20
•• • • ••• • •• •• ••• • ••• ••• •••
21-25
26-30
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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
V. Launch a state-of-the-art monitoring system
Measure
Target
Initiatives 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
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.
388
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Install a new governance system
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
389
1Y1Q-4Y4Q
Issue(s) to be solved While Cyprus’ stable political environment and strong commitment from the Government provide a positive framework inside which tourism can steadily develop, the current governance and management system is unfavourable due to the wide spectrum of organisations and public bodies that are involved, on both national and local levels. This situation means that it is difficult for the Government to address the broad spectrum of challenges that the tourism industry faces. Therefore, clear direction and a high level of coordination is necessary. Moreover, there is widespread scepticism amongst private sector stakeholders on public authorities’ ability to implement the Strategy. It is worth noting that previous strategies led by the Cyprus Tourism Organisation (CTO) from 2003 – 2010 and 2011 – 2015 were unsuccessful mainly due to a lack of clear and empowered leadership. The implementation of the Cyprus National Tourism Strategy is a complex process that requires strong leadership and significant efforts from and cooperation between a variety of key stakeholders both from the public and private sectors. Furthermore, this interaction between key stakeholders is very closely related to the Governance system.
B.
Initiative summary Implement an efficient, powerful, and dynamic tourism governance and management system led by the National Tourism Authority (NTA), capable of leading the Cyprus tourism industry in making the country a competitive destination and ruled by principles of continuity, accountability, transparency, responsiveness, equity, participation, efficiency, and effectiveness.
C.
Key benefits of a successful initiative implementation Cyprus will have a much more efficient governance system (better decisions, better consensus, and better leadership) which will help to implement the Cyprus Tourism Strategy in a much faster and more effective way, independent of changing governments, leaders, and executives. There will be greater consensus amongst key stakeholders on objectives and strategies for tourism development. Key stakeholders will provide a greater Strategy support and a better, shared comprehension of it. The decisions (both technical and operational) will have higher quality which favours the successful execution of the Strategy.
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390
Action plan Work stream 1. Constitute the Governance Framework The successful implementation of the Cyprus Tourism Strategy requires the creation and strengthening of several organisations and specialised bodies. Amongst these, four specific institutions hold the key to the achievement of the CTS and will constitute the governance framework: •
The Inter-Ministerial Commission for Tourism
•
The National Tourism Authority
•
The National Alliance for Tourism
•
The Office of the Strategy Manager
The National Tourism Authority is the clear key component of the Governance System. However, the breadth, diversity and mainstreaming of the tourism industry, which involves a large, diverse quantity of public and private sector bodies, companies, and associations (directly and indirectly), means that it is recommended that the NTA be supported and reinforced by other governance bodies. The role of the Inter-Ministerial Commission is to lead an effective horizontal implementation of the strategy and ensure that all relevant stakeholders are organised correctly. The National Alliance for Tourism is the main private sector counterpart to NTA, with which consensus can be reached on major issues and complicity and support can be obtained for sensitive matters. The Office of the Strategy Manager, which also forms part of the governance system but which is related more directly and specifically with the implementation of the Tourism Strategy, will oversee the development, alignment, implementation, and management of the Tourism Strategy in order to achieve the vision. The development of the OSM is developed in more detail in Work stream 3.
Action 1.1 Launch the Inter-Ministerial Committee (IMCT) The Inter-Ministerial Commission for Tourism ensures that the strategy execution process is conducted in a coordinated manner by the different Ministries. It affects and involves, while ensuring that key initiatives are implemented and decisions taken speedily. Its main objectives are maximising cooperation regarding tourism activities and improving resource efficiency to boost and enhance the Strategy for the next 14 years, while coordinating and monitoring its implementation. The IMCT will be established and formed by taking into consideration the nature, functions, and organisational body that each member represents. The IMCT will consist of the 6-8 Ministries that are most relevant to strategy implementation. The Commission, being the final decision-making body, will meet on a regular basis (four times per year) to monitor progress. Its meetings will be attended exclusively by the Ministers, and it is essential that it is chaired by the President and/or his Deputy. The Committee will work in plenary sessions, as a standing committee and, when appropriate, through the establishment of specialised task-forces. The following are examples of Ministries that can form part of the IMCT: Agriculture, Rural Development and Environment; Education Updated version 23.03.2017
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and Culture; Energy, Commerce, Industry, and Tourism; Foreign Affairs; Finance; Justice and Public Order; Labour, Welfare and Social Insurance and Transport, Communications, and Works. The contribution of each Member to the IMTC depends on their domain of activity and functions. The Commission will be organised and structured in accordance with the needs of the sector. The speakers designated by each Ministry will have the ranks of Secretary or, and not lower than, Sub-Secretary of State and shall be appointed by taking into consideration the special impact that their competencies have on the tourism industry. After the launch of the IMCT, the Committee will control the positioning of the sector as well as evaluate tourism’s development on a regular basis. In pursuance of involving the private sector in the new tourism structure and activities, public authorities will have to clearly and publicly express their support in terms of organisation of competences and support for entrepreneurs.
Action 1.2 Launch the National Alliance for Tourism (NAT) The National Alliance for Tourism (NAT) is conceived as a non-profit group formed by the leading and most open-minded stakeholders (top management) in the travel & tourism sector in Cyprus – airlines, hotels, travel agencies, tour operators, rent-a-car companies, wellness, and medical facilities, etc. It is furthermore very convenient and advisable that some companies and bodies that are not ‘strictly-speaking’ members of the tourism sector but who are greatly important to the functioning of the destination’s value chain form part of the NAT, such as companies providing financial services, communications, supplies of goods and raw materials, etc. The creation of the NAT will contribute by providing Cyprus with a consistent and prestigious government counterpart, with which it can reach consensus on major issues and obtain complicity and support on important and sensitive matters. The professional prestige of the NAT members should be capable of generating widespread support from the sector for issues that have been agreed upon with the government. The role of the NAT will be focused on: •
Identifying and promoting initiatives to strengthen Cyprus’ tourism competitiveness;
•
Promoting studies and research related to the tourism economic, social, and environmental impacts;
•
Strengthening the internal cohesion and professional prestige of the Cyprus tourism industry.
Work stream 2. Execute a Governance programme The Governance System is responsible for analysing, evaluating, and making decisions, considering technical, economic, social, legal, and political aspects, on major issues related to Cyprus tourism. The aim would be creating a basis for competitive, profitable, and sustainable development that will generate prosperity for the entire Cypriot society. To perform its responsibilities, the governance system will work based on a programme established on a short, medium, and long-term basis, according to the priorities set by a mutual agreement made between the National Tourism Authority, the IMCT, the National Alliance for Tourism and the Office of the Strategy Manager.
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The matters that the Governance programme must rule include, for example, the following: •
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 of tourism for the local society
•
Etc.
Action 2.1 Develop policies and programmes The Governance System should immediately begin to formulate policies and programmes on aspects key to the competitiveness and sustainability of the Cyprus tourism industry, which includes aspects such as: •
The enactment of a Comprehensive Tourism Law
•
The regularisation of the unlicensed accommodation capacity
•
Increased air capacity
•
Foreign worker recruitment policies
•
The creation of a National Culinary Centre
•
Improving tourism business conditions
•
How tourism is perceived by the local population
•
The cohesion and reinforcement of the tourism sector’s competitiveness
•
Monitoring and evaluation of the implementation of the Tourism Strategy
•
Etc.
Action 2.2 Set up specialised task forces Given the multidisciplinary character of the tourism industry, and with the aim of achieving the highest levels of effectiveness, we propose that the System of Governance also activates specialised areas and task forces based on the nature of the matters that it is responsible for. These Task Forces will propose recommendations and/or solutions to relevant problems that can impact the competitive development of Cyprus’ tourism industry and its competitiveness diamond. The task forces can be established as a permanent group (i.e. infrastructure) or adhoc services (i.e. reform of a particular tourism law). We recommend task forces involves representatives of the different members of the Governance System and between 5 and 10 members in total.
Work stream 3: Launch the Office of the Strategy Manager (OSM) The OSM is responsible for overseeing all strategy-related activities ranging from formulation to execution. It reports directly to the President, the National Tourism Authority and to the InterMinisterial Committee for Tourism (IMCT). The OSM (comprising about 5-10 people) will permanently communicate the Strategy, educate, and provide technical support for those who implement it, coordinate their actions, and maintain constant interaction with the IMCT and the Presidency office.
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Action 3.1 Set up the organisational structure of the OSM In the interest of performing its role, we recommend the following organisational structure for the OSM.
•
Strategy Planning and alignment: ensures the overall strategic planning process is working properly, the organisations involved in the strategy implementation are aligned with CTS and are properly informed about it, its targets, and the initiatives.
•
Strategy Execution Unit: provide an integrated approach to the strategy execution management process that bridges initiatives and its work streams with the targets.
•
Strategy Performance Manager: drive performance management through Balanced Scorecard (BSC) reporting and Strategy Review Meetings at different levels within the National Tourism Authority.
•
Point of Single Contact (PSC) in each of the proposed Public bodies involved: to ensure the smooth coordination and dissemination of relevant information.
•
Strategy and Special Projects Technical Support (SITES) unit: a team of 5-6 specialised consultants and advisors that will support the OSM in executing the Strategy.
Please refer to Chapter 12 for additional details.
Action 3.2 Specify the functions of the OSM We recommend OSM undertakes the following 6 key functions: 1. Strategy Planning: • Lead the Management Team in Strategy clarifications & reviews. •
Work with experts to evaluate strategic hypotheses and reshape the Vision.
•
Create the Change Agenda and the argument for change
•
Facilitate the transformation of the Strategy into strategic objectives, KPIs, targets and initiatives
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2. Aligning the organisation • Facilitate cascading to NTA Departments as well as support units and other public stakeholders by means of the IMCT •
Partner with units & departments to link the Strategy to the budget
•
Cooperate with the department of finance/budgeting to align the Strategy to their operational/business plans
3. Strategy Performance Management • Make sure that data is collected and analysed in order to put the report body together •
Highlight strategic issues to be discussed
•
Ensure that Strategy review meetings take place
•
Ensure timely and accurate reporting to the highest authority offices and prepare annual reports
4. Initiative Management • Coordinate the process of initiative prioritisation and make reports on strategic actions across public authorities and agencies involved (by means of the IMCT) • 5. •
Lead key initiatives & supervise the project Strategy Communication and change management Drive Strategy communications (both external and internal) by developing and executing the communication plan (supported by communication experts)
6. Strategic learning & knowledge sharing • Drive benchmarking, surveys, and data analysis to ensure strategic learning •
Facilitate the dissemination of knowledge, creating the most suitable forums for exchanging best practices
Action 3.3 Determine the key processes of the OSM In order to ensure the Office of the Strategy Manager is efficient in the short and long term, all key business processes should be established and its main components, responsibilities, interactions, specific objectives and KPIs defined. Once the key processes have been established and tested by the OSM team, key process will be communicated to all people involved in OSM (using standard operation procedures and business process mapping) and implemented.
Action 3.4 Ease the strategy’s execution As part of the strategy execution process, the OSM will translate the strategy into annual action plans for each governmental body involved in the strategy execution. The OSM will support it in drawing up annual action plans that outline how each organisation involved in the CTS will contribute to the strategy, ensuring that the annual organisation plans are aligned to the strategy and do not conflict each other. To ensure a sufficient budget and resources for the execution of the strategy, the OSM will also coordinate with finance and human capital units of each organisation involved. Finally, the OSM will coordinate the communication of the strategy to stakeholders.
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Action 3.5 Implement the Balanced Scorecard software The successful execution of the Cyprus Tourism Strategy will only take place with proper monitoring and evaluation, for which the OSM is responsible. To perform this task, a Monitoring and Control Software based on the BSC framework will be used. The BSC software will allow for quick and appropriate responses where necessary, always operating within predefined settings that run parallel with the strategic goals communicated to staff, alongside their expected contribution. This allows staff to embrace the vision and fully participate in the tactical execution. Above all, the chosen software should be very user-friendly, easy to manage and effective in displaying results and possible deviations of objectives.
Action 3.6 Monitor and control the strategy execution The Strategy Performance unit (action 3.1) is responsible for monitoring the execution of the strategy and the annual action plans. It provides periodic status reports to Top Management (President, the National Tourism Authority and to the Inter-Ministerial Committee for Tourism) about the progress of the strategy and execution. The OSM will support them in decision-making on the Cyprus Tourism Strategy and its execution. The OSM organises periodic strategy review meetings in which Top Management makes decisions about the strategy and its execution. When the objectives are not being met, the OSM will assess whether this is because of flawed execution or poor execution. When the hypothesis of the strategy is no longer valid, the OSM proposes changes to the strategy.
E.
Main stakeholders and their roles Responsible
Accountable
National Tourism Authority
X
X
Office of Strategy Manager (OSM)
X
X
Consulted
National Alliance for Tourism (NAT)
Informed
X
Inter-Ministerial Committee for Tourism
X
X
Presidentâ&#x20AC;&#x2122;s Office
X
X
Other ministries and public sector agencies involved
X
X
Other private sector involved
X
X
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396
Operational Action Plan & Budget (for the 4 first years) Work stream / Action Work stream 1. Constitute Governance Framework 1.1 Launch the Committee (IMCT)
PrioRisk rity
Budget for four years
the
Total (.000 €)
Budget per year 18 19
17
550
138
138
138
138
H
H
1.770
443
443
443
443
H
H
3.560
712
949
949
949
H
H
5.880
1.292
20
17
Inter-Ministerial
1.2 Launch the National Alliance for Tourism (NAT) Work stream 2. Execute Governance programme
a
2.1 Develop policies and programmes 2.2 Set up specialised task forces Work stream 3. Launch the Office of the Strategy Manager (OSM) 3.1 Set up the organisational structure of the OSM 3.2 Specify the functions of the OSM 3.3 Determine the key processes of the OSM 3.4 Ease the strategy’s execution 3.5 Implement the Scorecard software
Balanced
3.6 Monitor and control the strategy execution Total L: Low
M: Medium
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H: High
1.529 1.529
NR: No Risk
1.529
Timetable Years 18 19
20
Period 21-25 26-30
•••• •••• ••• •••• •• ••• •••• • • • • • ••• ••• ••• • •
CYPRUS TOURISM STRATEGY
21
Transform tourism system management Initiative Owner: National Tourism Authority
A.
397
Priority Start-final deadline 1Y2Q-4Y4Q
Issue(s) to be solved Cyprusâ&#x20AC;&#x2122; tourism management tasks are currently concentrated in the CTO. The CTO however has been overly involved with complex administrative procedures, with no time or resources to face the important challenges that lie ahead, in terms of competitiveness, planning, quality, marketing, support to the industry, etc. The existing platforms that are in place to foster communication with the private sector and local authorities are weak and the overall national system tourism industry management is underperforming. It is worth noting that being the same body, despite focusing on different elements, the systems of tourism governance and management are very interrelated. Strong scepticism on the ability of the public authorities to implement the Strategy being widespread amongst the stakeholders of the private sector, as previous strategies led by the Cyprus Tourism Organisation (2003 â&#x20AC;&#x201C; 2010 and 2011 â&#x20AC;&#x201C; 2015) were unsuccessful mainly due to a lack of clear and empowered leadership, here too affects the tourism management system. Therefore, although the association with most responsibility for the Cyprus Tourism system management is the National Tourism Authority, active participation from other institutional actors, and the private sector that is directly or indirectly related to the tourism sector, is highly recommended.
B.
Initiative summary The Tourism Management System has as its main mission implementing policies and strategic guidelines established by the System of Governance of Cyprus. The Tourism Management system to be implemented in Cyprus involves fundamentally three areas: competitiveness (the value of experiential tourism offered to its customers), marketing and sustainability of the system. The National Tourism Authority, as main responsible for the Tourism Management system, must develop considerable management capacities and use appropriate management tools. Furthermore, it should be able to analyse situations, set objectives, assign responsibilities, execute management actions, monitor results, and strengthen leadership permanently. This must be done in tight cooperation with a diversity of key actors within and outside the governmental sphere.
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C.
398
Key benefits of a successful initiative implementation The implementation of the Tourism Management system will improve the leadership and management of tourism in Cyprus and as a result, the objective of a successful implementation of the Cyprus Tourism Strategy will be achieved in a much more efficient way. The existence of an effective Tourism management system will contribute greatly to regaining the confidence of the actors involved, both directly and indirectly in the various components of the tourism value chain of Cyprus, thus facilitating the achievement of high levels of consensus, participation, and commitment in the implementation of the Cyprus Tourism Strategy.
D.
Action plan Work stream 1. Set up the new National Tourism Authority Cyprus needs an innovative, fresh, and modern organisation, capable of leading the tourism management system. The new National Tourism Authority (NTA) should aim to lead, encourage innovation and entrepreneurship, plan tourism development in a smart and rigorous way, develop memorable tourism experiences, promote innovative systems to satisfy tourists, proactively create better conditions so that tourism sector can adequately compete, etc. The National Tourism Authority will focus on facilitating sector development rather than being overburdened with administrative tasks. It shall be empowered to exert more influence both nationally and regionally.
Action 1.1 Establish the organisation of the new National Tourism Authority Based on the requirements to implement the Cyprus Tourism Strategy, identify core and support processes for the NTA and align it with the strategy. Once the processes have been defined, propose technology requirements to enhance organisation efficiency. Afterwards, develop an organisational structure of the NTA and identify the necessary departments. Finally, proposing roles/positions and defining optimal staffing levels for identifying roles will be necessary. Note: THR has submitted a proposed Organisation chart of the NTA
Action 1.2 Assign the right people responsible to conduct each functional area Aligned with the organisation proposed in Action 1.1, develop job descriptions, and define the required staff qualifications, skills, and knowledge for identified functional activities. After this, identifying the areas that can be covered by current CTO top management professionals and those that cannot is required. We recommend hiring a reputed recruiting firm to find the most suitable professionals. It will then be necessary to define the promotion and rewarding system.
Action 1.3 Execute an education programme for the managers and staff in each department We recommend to execute an education programme in order to transfer knowledge and capacities to the NTA team and equip them with the skills needed to execute their roles. The programme will be drawn based on the responsibilities of the job position and current skills / experience. Education will take place on a permanent basis. Updated version 23.03.2017
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Please refer to Initiative 18, for additional details regarding education programme addressed to NTA team.
Action 1.4 Hire technical assistance and advisory services The implementation processes require assembling a team of highly skilled experts. Contract professional service companies and research centres to provide specialised support in implementing initiatives, executing the education programme as well as advisory services: •
Master planning
•
Product and experience development
•
Market intelligence
•
Feasibility studies
•
Etc.
A successful cultural transformation will require the ongoing support of a highly skilled change management consultant, experienced in public sector projects. His/her involvement is absolutely crucial to the successful instalment of the new organisation; he/she can be either from Cyprus or abroad.
Action 1.5 Review the role of Local Tourism Boards Given the new NTA organisational structure and Cyprus’ National Tourism Strategy, review the responsibilities on a local level. Include Local Tourism Board professionals in the Education Programme. (Please refer to Action 1.3 for further details)
Work stream 2. Involve key stakeholders in the Tourism System Management The National Tourism Authority is clearly the key component of the Management System, but the breadth, diversity and mainstreaming of the tourism industry, which directly and indirectly involves a large number and diversity of actors, makes it advisable that the NTA is supported and reinforced by other management tools. They should represent both public and private, linked directly and indirectly to the legislation, planning, management and control of tourist activities and the operational aspects of provision and marketing of supply of tourism products and services.
Action 2.1 Establish mechanisms and instruments of participation of the public sector Given the transverse nature of tourism, in which numerous and diverse bodies of public administration are involved, it is necessary to create a platform for inter-administrative coordination that brings together the various agencies related to management conditions in which tourism develops: •
Territorial Planning
•
Urbanism
•
Infrastructure, equipment, and public services
•
Hygiene and Public Health
•
Security
•
Commerce
•
Training
•
Etc.
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The inter-administrative coordination platform aims to ensure the alignment of general conditions to the Cyprus Tourism Strategy implementation needs. Leaded by the National Tourism Authority, the platform will contribute to identify needs, anticipate conflict situations, and adopt measures to prevent or solve possible problems.
Action 2.2 Establish mechanisms and instruments of participation of the private sector The active and committed participation of the sector is a necessary and essential condition to ensure an effective management system. The private sector will be represented by a commission or board with the participation of various subsectors that make up the tourism value chain: •
Transport
•
Airports
•
Lodging
•
Restaurants
•
Travel Agencies
•
Leisure and recreation services
•
Etc.
Led by the National Tourism Authority, the commission will contribute to identify needs and adopt measures to anticipate problems that can impact the competitive development of Cyprus’ tourism industry. We recommend commission involves representatives of the different members of the subsectors involved and between 10 and 15 members in total. The private sector commission or board, is a different organisation from the National Alliance for Tourism (NAT), although their roles and functions are complementary. NAT is conceived as a more strategic organisation, acting as a private counterpart of the country's tourism authorities. On the other hand, the commission or tourism board referred in this Action is conceived as a more operational body made up of representatives of private companies from different sectors of tourism, which will help to identify needs and propose measures to make Cyprus a more competitive destination. Those recommendations about more sensitive issues or requiring a major political pact at the national level will be discussed at the highest level between the NAT and the Cypriot tourism authorities.
Work stream 3. Launch the new Tourism System Management In order to ensure high levels of efficiency in Cyprus’ tourism management, it is advisable to organise the workload based on key themes and establish ad hoc task forces, specialising in each of the key themes. The suggested proposals stemming from the work carried out by each of the task forces will be presented to the National Tourism Authority and the remaining members of the System of Governance.
Action 3.1 Establish the key work themes The management system will take care of managing and monitoring policies, strategic guidelines and action programmes established by the tourism system of governance in
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Cyprus. Some of the main issues that the management system should focus on, through management and continuous monitoring, are the following: •
Development planning
•
Legal framework
•
Air capacity
•
Tourism infrastructure
•
Innovation and technology
•
Human capital
•
Visual and environmental pollution
•
Wise Tourism Index
•
Degree of tourist satisfaction
•
System of experiences
•
Quality labels
•
Seasonality
•
MSME development
•
Etc.
Action 3.2 Establish ad hoc task forces These task forces will propose programmes and/or solutions to relevant problems that may have an impact on the competitive development of the Cyprus tourism industry. The output of their work is to be shared with the members of the Governance System and with other governmental body authorities that are involved. The task forces will be composed of representatives of both public and private sectors. It is recommended to have between 8 and 15 members in total.
E.
Main stakeholders and their roles Responsible
Accountable
National Tourism Authority
x
x
Office of Strategy Manager (OSM)
x
x
Consulted
National Alliance for Tourism (NAT)
x
x
President’s Office
x
x
Other ministries and public sector agencies involved Other private sector bodies involved
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Informed
x
x
x
x
x
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F.
402
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action Work stream 1. Set up the new National Tourism Authority
Total (.000 €)
17
1.590
318
Budget per year 18 19
424
424
20
424
17
H
H
1.1 Establish the organisation of the new National Tourism Authority 1.2 Assign the right people responsible to conduct each functional area 1.3 Execute an education programme for the managers and staff in each department 1.4 Hire technical assistance and advisory services 1.5 Review the role of Local Tourism Boards Work stream 2. Involve key stakeholders in the Tourism System Management
1.150
164
329
329
329
H M
2.1 Establish mechanisms and instruments of participation of the public sector
1.080
83
332
332
332
3.820
565
1.085
1.085
1.085
3.1 Establish the key work themes 3.2 Establish ad hoc task forces Total L: Low
M: Medium
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H: High
20
•••• • •• • ••• ••• •••• •••• ••••
2.2 Establish mechanisms and instruments of participation of the private sector Work stream 3. Launch the new Tourism System Management
Timetable Years 18 19
NR: No Risk
M L
•••• • •••
Period 21-25 26-30
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Launch performance monitor
Priority Start-final deadline
Initiative Owner: National Tourism Authority
A.
403
1Y4Q-4Y4Q
Issue(s) to be resolved Currently, there is no comprehensive system that can be used to monitor Cyprus’ tourism performance as a tourist destination. Only the Cyprus Statistical Service (CYSTAT) continuously monitors a large amount of the country’s tourism performance variables and indicators, in quantitative terms, by way of historical series which cover a long period: volume of arrivals, countries of origin, tourism revenues, arrival seasonality, etc. However, there is little or insufficient data on other variables and indicators, which are just as relevant to assessing the country’s competitive performance. Such as precisely identifying the main travel purpose within the “leisure” segment, the visitor’s degree of satisfaction, intention of repeating and/or recommending the destination, business profitability, etc. The lack of awareness of other indicators, such as Cyprus’ market share in source markets, its perceived image, its positioning relative to its competitors on matters like price, etc., is a significant limitation when it comes to planning and running the island’s tourism marketing.
B.
Initiative summary The tourism monitoring system is conceived as an initiative that aims to provide required quantitative and qualitative information to ensure that decision-making is based on thorough knowledge of the situation and evolution of Cyprus’ tourism sector performance, international tourism market conditions and its competitive environment. The monitoring system is responsible for collecting, organising, analysing, drawing conclusions, and disseminating information on three main areas:
C.
•
Sector performance indicators
•
Marketing indicators
•
Competitive positioning against competitor indicators
Key benefits of a successful initiative implementation An effective monitoring system is an indispensable base for efficient decision-making in all areas, both from a strategic and an operational point of view. This ensures a proper usage of available resources and therefore profitability. For example, a good, accurate knowledge of Cyprus’ position against its competitors means that the strengths and weaknesses of each can better be evaluated. Therefore, identifying opportunities generated by competitor errors, building effective competitive defences, etc.
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404
Action plan Work stream 1. Determine sector’s performance metrics Knowledge of the situation, evolution, and perspectives of the performance of the tourism sector is vital to identify and evaluate its strengths and weaknesses, anticipate negative situations, and take appropriate corrective action. Therefore, the monitoring system must consider two types of indicators: •
Marketing: the main indicators of marketing performed by Cyprus in its source markets, or in the country itself for its international visitors. These indicators relate to the planning, management, and implementation of marketing as much as the results it obtains.
•
Competitiveness: the main indicators used to compare, both quantitatively and qualitatively, Cyprus’ position as a tourist destination against its major competitors. Without these, the destination is forced to work without a clear framework, unaware of competitor strengths and weaknesses and ignoring the opportunities and threats that this entails for Cyprus’ competitiveness as a destination.
In order to implement this work stream, actions must be performed that are described below:
Action 1.1 Definition of a system of variables and indicators to establish Cyprus’ competitive position in relation to its competitors Ideally, the comparison should be established for each of the indicators that reflect both the general performance of the tourism sector as well as the marketing performance. However, this poses obvious difficulties with regards to accessing necessary information, as not all competing destinations generate such information, nor to the same extent or as frequently, and in case they do, access to this information is not guaranteed. If the comparison between Cyprus’ competitive position against its competitors is not possible for all indicators, it is recommended to focus on at least the following areas: •
Volume of visitors received: This information is usually available both from sources from each country as well as in reports published by the World Tourism Organisation.
•
Market share: This indicator is relatively easy to establish based on information obtained from the main source markets, or sources such as the WTO, Tourism Economics, Eurobarometer, etc.
•
Tourism marketing management: This information must originate from the marketing intelligence work carried out by CTO offices abroad. These must take care of obtaining, both by using direct and indirect methods, the data required to characterise, at least qualitatively, the marketing performance of each competing destination in the main source markets.
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Action 1.2 Establish a system of variables and indicators to monitor marketing We recommend the following list of indicators related both to the planning, management and implementation of Cyprus’ marketing: Variables
Visitors to Cyprus
Source markets
Market share
Cyprus image and positioning
Cyprus’ price competitiveness Potential demand Cyprus’ marketing management
Collaborators
Indicators • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Total volume and by source market Growth rates Visitor profiles Travel purpose Information and consumption habits Volume of trips abroad Volume of demand by segment Expenditure Types of trip Traveller profiles Information, purchase and consumption habits Travel purpose Most popular destinations Market share in the main source markets Market share in major demand segments Market share in main types of travel Degree of knowledge and comprehension of Cyprus as a tourist destination Power of the Cyprus brand (reputation, esteem, differentiation, and relevance) Positive and negative aspects of Cyprus’ perceived image By season (summer, winter) By duration (7, 14, +/- 15 days) By accommodation type and capacity Purchase intent in the short, medium, and long term Purchase intent by season Purchase intent by travel type Purchase intent by segment Available budget Planned/executed actions Expenditure/investment made Return on investment (ROI) Tour operators operating in Cyprus in each market (general, specialised, summer, winter) Volume of the scheduled Cypriot offer Airlines operating with Cyprus (capacity, frequency, connectivity)
Action 1.3 Obtain information Once the marketing and competitiveness variables and indicators to assess have been established, the next step is to gather the necessary information. In order to ensure the quality of the monitoring system, data must come from reliable, trustworthy sources. It must be rigorous and up-to-date. THR recommends the following: •
Elaborate every 5 years the Input-Output tables of the Tourism in Cyprus
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•
Otherwise, we suggest producing Satellite Accounts
•
Acquire data from World Travel Monitor
•
Subscribe to information and intelligence services similar to Euromonitor and other.
•
Seal agreements with Big Data suppliers such as OAG, Visa, etc.
406
Action 1.4 Process the collected data The next step after collecting the data is to process it through the Tourism Intelligence Platform (Work stream 2). Data processing will ensure that gaps and inconsistencies are identified that must be corrected.
Action 1.5 Develop evolution and relationship indexes Data processing will result in developing a series of indexes, both for evolution of the indicators as well as the relationship between them, in order to achieve a comprehensive interpretation based in reality.
Action 1.6 Disseminate the results The results will ultimately be disseminated using the most suitable means – both online (tourism platform and/or website) and offline (publications, conferences and workshops and events). The dissemination should not be data and information, but intelligence focussed. That intelligence should be elaborated in a way that is easy to read, understand, and apply. Consult visitbritian.org for some good examples. Not all data must be disseminated publicly, three different levels should be established and defined: •
Internal use only
•
Subscribed use of registered industry members
•
Public use
Work stream 2. Launch a Tourism Intelligence Platform The Tourism Intelligence Platform should combine advanced statistical analytics, high-speed processing of large amounts of tourism data, and easy-to-use query and reporting tools. The result is accurate, reliable, and fast information which can be used for decision-making. This will allow the NTA to build data warehouses, perform data mining and enable tourism stakeholders to query data and produce reports directly from a web browser. It will make use of existing data assets, enabling the NTA to integrate data from multiple sources of information and reports. Tools will be provided to help ensure the reliability, consistency, and standardisation of tourism data. The implementation of the Tourism Intelligence Platform is made up of four distinct phases: •
Planning.
•
Architecture development (Dynamics, Oracle, SAP, Siebel).
•
Data Management
•
Analytics and Information Delivery, including End-user tools and analysis, Advanced Analytics and Excel, Self Service Reporting; Dashboards.
The existing CTO systems should be developed and upgraded in order to cover the requirements that were established in previous work streams.
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The implementation of this work stream comprises executing the actions which are described below.
Action 2.1 Establish functional requirements and select a proper software solution Establish the functional requirements based on the outputs to be provided (work stream 1 and 2) and stakeholders needed and select the right software modules (open sourced or not). Define the architecture in terms of hardware resources, data size and the anticipated usage of the Platform.
Action 2.2 Implement the software and reporting system Support technicians in charge of implementing the platform, follow-up on and validate the work performed, and prepare proposals for improvement, if appropriate. Identify the types of users that will be using the system, and the information needed for it. Identify the analytical needs (in accordance with previous work streams) of tourism stakeholders and NTA Departments, in order to implement the right analytic modules, type reports and dashboards (econometric analysis, time series analysis or time series forecasting).
Action 2.3 Train the users Training for users should be implemented either just before or during software installation and configuration to avoid leaving the platform sitting dormant.
E.
Main stakeholders and their roles Responsible
Accountable
National Tourism Authority
x
x
Office of Strategy Manager (OSM)
x
x
Consulted
National Alliance for Tourism (NAT)
x
x
Presidentâ&#x20AC;&#x2122;s Office
x
x
Cyprus Statistical Service â&#x20AC;&#x201C; Cystat CTO offices abroad
Informed
x
x x
x
Other ministries and public sector agencies involved
x
x
Other private sector bodies involved
x
x
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F.
408
Operational Action Plan & Budget (for the 4 first years) PrioRisk rity
Budget for four years
Work stream / Action
Total
Work stream 1. Determine sector’s performance metrics
Years
(.000 €)
17
18
19
20
4.700
362
1.446
1.446
1.446
17
H M
1.1 Definition of a system of variables and indicators to establish Cyprus’ competitive position in relation to its competitors
1.4 Process the collected data and
1.6 Disseminate the results 2.400
185
738
738
738
7.100
546
2.185
2.185
2.185
2.1 Establish functional requirements and select proper software solution 2.2 Implement the software and reporting system 2.3 Train the users Total L: Low
M: Medium
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19
20
•••• ••
1.3 Obtain information
Work stream 2. Launch a Tourism Intelligence Platform
18
••
1.2 Establish a system of variables and indicators to monitor marketing
1.5 Develop evolution relationship indexes
Timetable
Budget per year
H: High
NR: No Risk
H
L
• • •• •• •••• • •• ••
Period 212625 30
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Chapter 10 Separate Action Plans As requested by the Terms of Reference A.
Product/Segments
B.
Priority Source Markets
C.
Improvement of the Quality
Included by THR as Added Value D.
Cyprus Brand
E.
Seasonality Reduction
F.
Integrated Spatial Tourism Development for major Tourism Areas
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Three Separate Plans requested by the Terms of Reference and three more plans developed voluntarily by THR as added value THR has developed the three Separate Plans required in the ToR: Products/Segments, Priority Source Markets, and Improvement of the Quality. Additionally, we considered necessary creating a more detailed set of initiatives related to Branding, Seasonality Reduction, and Integrated Spatial Development. These have formed into three more Separate Plans included voluntarily to the CTS as added value. Each one of these Separate Plans answers to the ToR’s requirements and contains the following: Separate Action Plan’s Content Each Separate Action Plan divides into three chapters or parts. On the first part, the need of the Action Plan is explained. The second part describes the most important actions of each Plan. Finally, the third part specifies the directions, budgets, and instalments for the implementation of such plan. 1.
Introduction
The introduction describes the issue why the Separate Plan was needed in the first place as well as the main objective and purpose of it. Measures and Targets are also included for reference. Finally, we present the Action Plan Summary that THR recommends implementing in order to reach the objective. Besides, the benefits an efficient implementation would bring are also included. 2.
Action Plan Content
In the second part of each Separate Plan, Work Streams and associated actions are described. This part also comprises those complimentary actions – some critique – of legal, educational, marketing, etc. nature whose execution is necessary for the Plan’s effective implementation. 3.
Action Plan Implementation
Finally, we show the stakeholders necessities, their roles, the effective time and instalments and economic resources to implement each Separate Plan. Table 98. The Six Separate Action Plans A
Products/ Segments
D.
Cyprus Brand
B
Priority Source Markets
E.
Seasonality Reduction
C
Improvement of the Quality
F.
Integrated Spatial Tourism Development for major Tourism Areas
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A. Product/Segment 1.
Introduction to separate plan for products 1.1 1.2 1.3 1.4 1.5
2.
Sun & Sea development separate plan 2.1 2.2 2.3
3.
Cycling Tourism market potential Actions to be taken for successful product development Action Plan Implementation
Sport Tourism 5.1 5.2 5.3
6.
Itineraries & Culture market potential Actions to be taken for successful product development Action Plan Implementation
Cycling Tourism 4.1 4.2 4.3
5.
Sun & Sea market potential Actions to be taken for successful product development Action Plan Implementation
Itineraries & Culture development separate plan 3.1 3.2 3.3
4.
Objectives, gaps, content and expected benefits Summary of the separate action plan Overview of product development actions Overview of compliance between product plans and initiatives Actions, priorities, types, budget and required planning
Sport tourism market potential Actions to be taken for successful product development Action Plan Implementation
Meetings & Events 6.1 6.2 6.3
Meetings & Events market potential Actions to be taken for successful product development Action Plan Implementation
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1. Introduction to separate plan for products 1.1
Objectives, gaps, content and expected benefits of the separate plan for products
1.2
Summary of the separate action plan
1.3
Overview of product development actions
1.4
Overview of compliance between product plans and initiatives
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413
Objectives, gaps, content and expected benefits of the separate plan for products a. Purpose and main objective of this Plan This separate Action plan has 3 main purposes: â&#x20AC;˘
provide an overview of products in which Cyprus should establish a strong competitive position;
â&#x20AC;˘
define targets regarding arrivals and revenue by products, and
â&#x20AC;˘
propose steps to develop and/or strengthen the competitiveness of the priority products.
b. Gaps identified in the current situation Cyprus is currently overdependent on the Sun & Beach product which 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. In order to close the gap, other products segments need to be developed and their competitiveness increased.
c. Plan to close the gaps Each of the five products of Cyprus portfolio has a separate plan that includes: a product overview, its arrivals and revenue potential and targets, the actions for a successful product development, its implementation plan and budget for the first 4 years.
d. Benefits resulting from a successful plan implementation The new products will attract additional target segments from additional markets, above all in the mid- and low-season periods and to an important degree also outside the current mass tourism centres at the coastline. New specialist and service jobs will be created along with interesting entrepreneurial opportunities, also regarding complementary services like accommodation, restaurants, and other services. The market positioning of Cyprus will be sharpened, the portfolio risk lowered, and return on investments increased thanks to a clear strategic focus on government support.
1.2
Summary of the Separate Plan for Products a. Overview of the product portfolio With the aim of diversifying its product offer, attracting higher yielding customers and alleviating seasonality, Cyprus must develop products for segments other than Sun & Sea. The main question is deciding on which segments to compete, and this can be done by assessing what market segments are most attractive for Cyprus in terms of opportunities and Updated version 23.03.2017
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to what extent Cyprus is in a position to respond to their main motivation and to fulfil their requirements and needs. Based on this rationale, the following prioritization matrix has been prepared in the section dedicated to the Core Strategy of the CTS. Figure 126. Product prioritization matrix
The top priority products (existing and new) in which Cyprus must invest in the upcoming years to strengthen the competitive position are described in the table below.
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Table 99. Overview of six priority products Sun & Sea Sun & Sea holidays are considered to be the most traditional type of holiday. The main trip motivation is to relax by the beach and enjoy good weather and amazing coastlines while experiencing a diversity of activities. Itineraries & Culture Travel focusing on experiencing the arts, heritage, landscapes, traditions, and lifestyles of other regions/destinations is referred to as cultural tourism. Adding a touring component (traveling through a destination visiting various places) helps to organise the exploration into cultural itineraries. Cycling Tourism Cycling tourism refers to leisure trips whose main purpose is cycling. The bicycle is not just a means of transport but becomes an integral part of the tourist experience. Cycling tourism can be centre-based (where people are based in a particular location for several days going out for one-day cycling trips) or as a tour (staying at different locations). Sport Tourism Sport tourism refers to amateur athletes, as well as professional athletes that participate in sports events, and pre or post-season camps/stages. Meetings & Events Travelling for the purpose of participating in meetings & events. The acronym “MICE” is used often to refer to Meetings, Incentives, Conferences, and Exhibitions. Although the main purpose of the trips is business/work, they can also involve a leisure component
b. Overview of target segments and source markets per product The target segments and priority source markets that will facilitate reaching the targets established for each of the 6 priority products have been identified and are listed below. Further information about target segments and source markets are included in the chapters of this document dedicated to each priority product. Table 100. Overview of target segments and priority target markets per product Product
Target segments •
Sun & Sea
•
Germany
Adult couples w/o children (empty nesters)
•
United Kingdom
•
Russia
•
Adult couples w/ children (full nesters)
•
Poland
•
The Special Interest Independent Travellers
•
Russia
•
Social Adventurers
•
France
•
Itineraries & Culture
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Active adults w/ or w/o children (adult households)
Main source markets
CYPRUS TOURISM STRATEGY
Product
Target segments
Cycling Tourism
Sports Tourism
Meetings & Events
Main source markets
•
Professional cyclists
•
Germany
•
Cycling enthusiasts
•
Netherlands
•
Football clubs
•
Swimming clubs
•
United Kingdom
•
Scuba diving enthusiasts
•
Russia
•
Marathoners
•
Germany
•
Germany
•
United Kingdom
•
France
•
Italy
•
Spain
•
Incentive trips
•
Boutique events
416
c. Overview of tourist arrivals and revenue targets per product For each priority product, tourist arrivals and revenue targets for the period 2020-2030 have been established and are shown below. Table 101. Overview of arrival targets for each product Product
2020
2025
2030
2.400.000
2.900.000
3.700.000
Itineraries & Culture*
260.000
400.000
620.000
Cycling**
25.000
45.000
75.000
Sports Stages**
55.000
85.000
110.000
Meeting & Events**
35.000
55.000
75.000
Sun & Sea*
*Arrival targets have been rounded to the nearest multiplier of 10.000 ** Arrival targets have been rounded to the nearest multiplier of 5.000
Table 102. Overview of revenue targets (in million €) for each product Product
2020
2025
2030
2.170,2
3.000,0
4.235,9
Itineraries & Culture
264,4
462,3
793,8
Cycling
23,1
52,8
90,8
Sports Stages
83,3
152,5
217,2
Meeting & Events
30,4
48,4
69,7
Sun & Sea
Further details on tourist arrivals and revenue targets, as well as the method used to calculate them, are included in this Chapter, in each of the product reports.
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417
Overview of product development actions A variety of actions must be carried out to develop the prioritised products, including value creation, regulations, infrastructure, training, marketing, etc. Table 103. The 7 types of action that are most frequently used in the product/segment plans Action
Examples
• 1. Market research performed by Visit Cyprus in order to better understand the potential, preferences and KSFs of each • segment.
Researching the most attractive products and services in order to include them in the CVP of the Grand Tour of Cyprus.
2. Support in developing • innovative value propositions • that attract more tourists and differentiate Cyprus from its competitors
Developing “Themed Beaches”.
3. Executive education and training actions so that products • and services that make up the CVP of each segment are used to their fullest potential.
Focus groups with managers of sports clubs to identify new opportunities in this segment.
Implementing “Cyprus Quality Labels” (e.g. Qualmark, New Zealand) in facilities used to hold meetings. Executive training on key success factors in 4th generation resorts.
• 4. Actions aimed at involving relevant partners to ensure that all critical activities are successfully implemented. •
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 in each of the 6 products as well as among visitors at large.
•
Implementing an instant service satisfaction system via smartphone.
5. Continuous supervision of customer satisfaction with regard to each of the 6 priority segments
6. Marketing efforts in order to advertise the Cypriot tourism • offer and making its products more popular than those of the • competitors • 7. Legal, infrastructure, and other actions that complement • the above.
Etc.
Setting up a specific microsite for each segment. 3 ‘branded content’ videos on bicycle touring. Resort regulation in Cyprus. Conditioning 200 kilometres of tracks for bicycle touring.
The activities recommended for each product/segment are presented on the detailed plan in the following pages.
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Overview of relation between product plans and initiatives Each of the 22 initiatives of the Cyprus Tourism Strategy has an impact on the development of the strategic products for Cyprus that will concentrate the efforts and investment in the coming years. Sometimes the impact is very direct (e.g. design of experiences), in other cases the impact is rather indirect (e.g. new governance system). The following compliance matrix summarises the strength of the impact of each initiative on the different strategic products.
Itineraries & Culture
Meetings Events
Cycling tourism
Sport tourism
Table 104. Compliance between product plans and initiatives
Sun & Sea
1.4
418
1. Experience Cyprus Program
3
4
2
2
1
2. Cyprus Quality Labels
2
4
2
3
1
3. Visual pollution initiative
3
3
1
4
1
4. Implement the National Tourism Planning initiative
2
2
1
1
1
5. Growth modelling initiative
1
1
1
1
1
6. Product Development Unit
4
4
4
4
4
7. TourInvest Initiative
2
1
2
1
1
8. MSME support program
2
4
2
4
2
9. Partnering Initiative
3
3
0
2
1
10. A new brand management system
1
3
1
2
2
11. Implement a world-class Marketing Plan
4
4
4
4
4
12. Seasonality reduction initiative
2
3
3
3
3
13. Elaborate Wise Tourism Index
1
2
1
2
1
14. Carbon footprint reduction
2
1
2
1
1
15. Made in Cyprus/ Soul of Cyprus Initiative
2
4
2
3
1
16. Create the Competitiveness Unit inside the NTA
2
3
1
2
1
17. Revision of the legal framework
2
2
2
1
1
18. Human Capital initiative
2
3
1
3
2
19. Airline partnership initiative
2
3
3
3
3
20. Governance System
4
4
4
4
4
21. Tourism System Management
4
4
4
4
4
22. Performance Monitor
2
2
1
1
1
Initiatives
No compliance
0
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1
2
3
4
Strong compliance
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419
Actions, priorities, types, budget and required planning For each one of the development actions proposed, a specific budget was allocated from the strategic initiatives â&#x20AC;&#x201C; either exclusively from one initiative or in some cases from several of them, depending on the compliance level. Once the budget has been allocated, it has been introduced into the action plan implementation table, as can be seen below (example) Figure 127. Example of action plan implementation table
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2. Sun & Sea 2.1
Sun & Sea market potential
2.2
Actions to be taken for successful product development
2.3
Action Plan implementation
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Sun & Sea market potential Sun & Sea holidays are considered to be the most traditional type of holiday, as well as the most important segment in terms of number of trips, both in Europe and worldwide. The main motive for the trip in this case is to relax by the beach while enjoying good weather and amazing coastlines.
a. Sun & Sea market size in Europe: 100 million trips per year Based on THR analysis, the total size of the European sun & sea market is estimated to account for 31% of total outbound leisure demand, resulting in 102 million trips per year 34. According to the ITB World Tourism Trends report 2015/2016, the Sun & Sea arrivals grew 39% in the period 2007-2014. Figure 128. Sun & Sea destinations according to their popularity 44%
18% 12%
11% 6%
Spain
Greece
Italy
Turkey
The Mediterranean region is one of the most popular regions for sun & sea holidays worldwide, if not the most popular. Spain35 is by far the most popular sun & sea destination, with 44% of travellers stating so (includes Balearic and Canary Islands).
Cyprus
Source: Cyprus Brand Adoption survey
Although Cyprus is by all means considered to be a popular Sun & Sea destination, THR considers that the results obtained from the Cyprus brand adoption survey should be analysed with reserve, since only mature markets â&#x20AC;&#x201C; the UK and Russia, stated that Cyprus is a popular Sun & Sea destination, with 13% and 15% respectively. The popularity of Cyprus as a Sun & Sea destination in other 4 markets included in the survey was on average 2,5%, significantly below the two aforementioned mature markets. Demand analysis has shown that Germany is the largest source market for Sun & Sea trips in Europe, accounting for 22% of total trips, followed by Russia (15%) and the UK (14%).
34 35
Estimates for 28 countries within the EU, Switzerland, Norway, Russia and Ukraine This includes continental Spain, Balearic Islands and Canary Islands
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Figure 129. Top 5 European source markets for Sun & Sea outbound demand
Source market
Other 37%
Germany 22% Russia 15%
UK Netherlands 14% 5% France 7%
Size of the S&S segment (# of arrivals)
Germany
22.107.330
Russia
15.304.791
UK
14.795.145
France
7.677.418
Netherlands
5.225.001
Source: Estimates based on Eurostat, European Commission, and Cyprus Brand Adoption Survey
b. Current Sun & Sea demand for Cyprus To estimate the current number of arrivals and revenues corresponding to the Sun & Sea demand in Cyprus, the following inputs and assumptions have been considered: •
International arrivals to Cyprus in 2015 36 amounted to 2.659.405.
•
Leisure (holiday) travellers are 84% of total arrivals to Cyprus 37;
•
It is assumed that Sun & Sea arrivals have a 90% share over the total leisure arrivals;
•
Total tourism revenues in Cyprus in 2015 were equal to 2.112,1 million €38;
•
It is assumed that the average expenditure per stay/arrival in Cyprus is equivalent to the Sun & Sea expenditure.
Following these inputs and assumptions, THR has estimated the current Sun & Sea demand in Cyprus. Table 105. Estimated Sun & Sea tourist arrivals and revenues in Cyprus in 2015 Sun & Sea demand in Cyprus (in 2015) Arrivals Revenues (in million €)
2.010.510 1.666,7
Share in total tourist arrivals/revenues in Cyprus 76% 79%
c. Cyprus short/mid-term potential in the Sun & Sea segment Based on the analysis and inputs from the brand adoption survey, following the approach explained in the Chapter 3 of the Final Report, THR estimates that Cyprus has the potential to capture 19% (≈19,4 million trips) of the European sun & sea demand in the short and mid-term (over the course of 5 years), under the condition that the sector competitiveness will be systematically developed throughout the years. Source markets with highest potential for Cyprus in the Sun & Sea segment are Russia (≈6 million trips), the United Kingdom (≈2,75 million trips), Germany (≈2,5 million trips), France (≈1,65 million trips) and Netherlands (≈850 thousand trips). Statistics on tourism, Republic of Cyprus Statistical Service THR based on Republic of Cyprus Statistical Service 38 Statistics on tourism, Republic of Cyprus Statistical Service 36 37
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Figure 130. Cyprus short/mid-term potential in the European outbound Sun & Sea market Top 5 source markets for Cyprus 19% (≈19,4 mill trips)
Cyprus potential in the S&S segment (# of arrivals)
Russia
5.975.387
UK
2.748.516
Germany
2.466.508
France
1.659.610
Ukraine
942.844
Source: Estimates based on Eurostat, European Commission, and Cyprus Brand Adoption Survey
d. Cyprus arrivals and revenue targets in the Sun & Sea market until 2030 In order to set the targets for the upcoming years, the following assumptions have been made: •
Over a 5 years’ period (by 2020), Cyprus will manage to attract 10% of its estimated Sun & Sea potential: ≈2,4 million of additional Sun & Sea arrivals over 5 years (it is assumed that additional demand generated will be evenly distributed over 5 years);
•
Further growth of Sun & Sea arrivals, in the period 2021-2030, will be in line with the average growth rate of arrivals according to the Premium demand model developed by THR (4,5% growth p.a.);
•
Consumer prices in Cyprus will increase by 6% by 2020 and 17% by 2025 39;
•
In the period 2025-2030, consumer prices in Cyprus will increase an additional 10%;
•
Due to the overall product enhancement and development of new experiences, tourist expenditure per stay/arrival will increase by 3% every 5 years (on top of the increase of consumer prices).
Based on these assumptions, the arrivals and revenue targets for the Sun & Beach product are the following: Table 106. Sun & Sea tourist arrivals & revenue targets Arrivals Revenues (in million €)
39
Tourism Economics
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2020
2025
2030
2.397.724 2.170,2
2.917.198 3.000,0
3.691.186 4.235,9
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Actions to be taken for successful product development
2.2.1
Development must be driven by a solid business model
424
Rethinking current Sun & Sea model requires diversifying the product offer, from a new perspective reducing the negative environmental effects associated to exploiting the coast line, and its concentrated seasonality. Current Cyprus product may become undistinguishable from many other places, only for its price competitiveness. The upgrade of existing products and services to align the offer to a premium price positioning will be key to ensure that tourists perceive the value that Cyprus offers and are also interested in complementary tourist products (i.e. local traditions, excursions, and experiences). A strong component of the business model is the network of key partners, mainly consisting out of local SMEâ&#x20AC;&#x2122;s driving and improving the value proposition offered to the customer segments. Figure 131. Sun & Sea product business model
Source: Based on A. Osterwalder & Y.Pigneur, Business Model Generation
2.2.2
The Action Plan: 5 priorities The Action Plan focuses on achieving the proposed business model, thus fostering the overall competitiveness of Cyprus the Sun & Sea market.
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Figure 132. Overview of Sun & Sea product development actions
Source: Based on A. Osterwalder & Y.Pigneur, Business Model Generation
For Cyprus to deliver a world-class Sun & Sea experience, it needs to make sure that: 1. The right segments have been targeted 2. Cyprus offers these targets an attractive customer value proposition (CVP) 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction 4. The right resources and partners are used for each segment 5. Successful marketing / communication is established
Priority 1. The right segments have been targeted To achieve this, Cyprus needs to do the following: â&#x20AC;˘
Target the right segment for the Sun & Sea product
â&#x20AC;˘
Target the right source markets for the Sun & Sea product
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Action 1. Target the right segments for the Sun & Sea product In order to maximise the return on marketing investment (ROMI) that is necessary for the successful positioning of Cyprus in the Sun & Sea market, a market strategy identifying segments to be targeted has to be communicated to key stakeholders. THR proposal of target segments for Sun & Sea product in Cyprus is shown in the following figure. Figure 133. Target segments proposal for Sun & Sea product
Source: Adapted from European Travel Monitor
Action 2. Target the right source markets for the Sun & Sea product A preliminary analysis of the top 10 source markets for the Mediterranean 40 has identified 4 top priority source markets to focus on (as seen below), as well as 2 markets that need to be further developed and penetrated â&#x20AC;&#x201C; Germany and Poland.
As defined here, Mediterranean takes into account destinations where Sun & Sea represents the main tourism product: Balearic Islands, Malta, Croatia, Montenegro, Greece, Turkey, Cyprus. 40
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Figure 134. Preliminary source markets prioritization for Sun & Sea tourism in Cyprus
Source: Based on Tourism Economics and the Statistical Institute of the Balearic Islands Legend: AT-Austria, CZ-Czech Republic, DE-Germany, FR-France, IT-Italy, NL-Netherlands, NO-Nordics, PL-Poland, RU-Russia, UK-United Kingdom
Priority 2. Cyprus offers these targets an attractive customer value proposition (CVP) To achieve this, Cyprus needs to do the following: •
Provide an innovative and differentiated concept of beaches
•
Operate an attractive portfolio of activities, excursions, and experiences along the coast and inland
Action 3. Provide an innovative and differentiated concept of beaches Develop a portfolio of themed beaches such as: family beach, sport beach, surfing beach, wellness beach, dog beach, party beach, romantic beach, eco beach, etc. For each type of beach, a set of standards should be developed and communicated. Croatia provides a good example of themed beaches41. A selection of beaches offering higher level of services (comfort, equipment, etc.), will be branded under the name of “Premium beaches collection”. Standards should include a lower person/m2 ratio than in other beaches.
41
http://arhiva.dalje.com/en-croatia/tourism-minister-to-introduce-theme-beaches-in-croatia/535517
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Additionally, a pool filled with sea water - between 0,5 and 1 km long- with artificial beaches made from natural sand should be built in a strategic location in order to promote a yearround Sun & Sea product. Action 4. Operate an attractive portfolio of activities, excursions, and experiences along the coast and inland What Cyprus is currently offering and promoting under the Sun & Sea product is a portfolio of traditional beaches with no added value. Therefore, the efforts to develop an expanded portfolio of competitive sun & sea product should go beyond offering nice beaches adding a network of highly attractive activities, excursions and experiences offering choices to travellers. Figure 135. Current Sun & Sea offering of Cyprus does not communicate experience
Source: Visit Cyprus (www.visitcyprus.com)
Excursions and experiences THR has proposed 5 Top Experiences and has suggested 15 Signature Experiences that can be expanded as the private sector takes the initiative. Nevertheless, we want to make three important recommendations: The NTA and especially the CEA should try to develop experiences for millennials, experiences of edutainment and entertainment, and above all that Cyprus should become a "smart destination" within 5 years. For Cyprus to gain success in capturing potential Sun & Beach travellers, the portfolio of “experiences” needs to be further developed and better communicated. In this sense, the opportunities for coordination with the “Grand Tour of Cyprus” and “CYcling in Cyprus” products should not be missed (see later on this document the Action Plans for Itineraries & Culture and Cycling tourism products). In those plans, the “core” of the product is a portfolio of routes and activities with potential to be offered as add-ons to the Sun & Beach product. Activities in the destination itself THR recommends reviewing the offer of activities in the destination with special attention to the following: Walking, cycling routes, markets with character, shopping malls, etc.
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Priority 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction To achieve this, Cyprus needs to do the following: •
Completely eliminate the high level of visual pollution in the coastal areas
•
Manage the tourism areas in an integrated and sustainable way
•
Measure the overall customer satisfaction in the coastal area
Action 5. Completely eliminate the high level of visual pollution in the coastal areas The visual pollution is currently extremely high in Cyprus, not only in many tourist areas, but also in roadsides and villages along tourist routes. A proliferation of ugly and ineffective advertising signs, illegal unfinished constructions, debris, and rubbish by the roads, among other elements, reduce the beauty and attractiveness of the island as a tourist destination. Many buildings are perceived by tourists as ugly and “soulless” as they do not show any trace of the traditional Cypriot architecture. Tourists from northern or central European markets are particularly sensitive to the lack of environmental charm resulting from visual pollution, a situation that significantly reduces the quality of their customer experience. Consequently, the most critical spots and elements along the coastal area of Cyprus must be detected, documented, and prioritised based on urgency and importance of an aesthetic makeover. The top spots will be included in the goals for the next 3 years. Before approaching local authorities and communities for funding, incentive and award program must be developed. Then, the program should be rolled out in collaboration with mayors, local businesses, and community representatives, with the aim of creating a network of new, dynamic, and more aesthetically pleasing villages, roadsides, attractions, and buildings. To create the dynamic for an “aesthetic revolution” in Cyprus, an awareness program needs to be launched mainly targeting high schools, universities, and colleges, with organised spillover effects into local families and events. An additional target group must be local businesses (all sectors). Action 6. Manage the tourism areas in an integrated and sustainable way Based around the provisions of the Statement of Policy for the Countryside, the government has designated 41 ‘Tourism Zones’ (amounting to 5.319 hectares) - areas in which tourism development is primarily permissible (subject to all other statutory criteria being met). In some cases, the development allowed in these zones is incentivised by the ‘Planning Incentives Scheme’ agreed by the Council of Ministers. The majority of the tourism development zones are along the coastline. This has allowed and encouraged developers to build their projects in the ‘shoreline’ of coastal locations, resulting in an excessive ‘linear’ development in some areas. This pattern of development is unsustainable and is one of a number of planning and development issues to be addressed by the government in order to foster a competitive Sun & Sea product. For the type of actions required to manage tourism areas in an integrated and sustainable way, please refer to the Special Action Plan F. Integrated Spatial Tourism Development for mayor Tourism Areas.
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Action 7. Measure the overall customer satisfaction in the coastal area In order to ensure that the Sun & Sea product development is going forward the way it is intended, a customer satisfaction survey has to be conducted on a quarterly basis. A standardised survey needs to be developed and distributed throughout the hotels, where it will be displayed on a visible spot. Support staff will be needed to approach tourists and collect the surveys and agreement should be reached with the tourism service providers and/or education or training centres. It is highly recommended that the survey is in digital format, as it reduces the burden from the customer’s point of view. Figure 136. Illustrative example of digital customer satisfaction survey in hotels
Source: Reputize (www.reputize.co)
Priority 4. The right resources and partners are used for each segment To achieve this, Cyprus needs to do the following: •
Educate employees at all levels
•
Attract renowned international hospitality brands (hotel/resort operators)
Action 8. Educate employees at all levels Introducing a new culture of service among Sun & Sea service providers as well as improvements regarding land/urban planning and management, educational programs need to be developed targeting: •
Hospitality personnel;
•
Leading private sector executives;
•
Government officers involved in urban and land planning and the development of the tourism zones.
Action 9. Attract renowned international hospitality brands (hotel/resort operators) In order to push Cyprus hoteliers to provide the highest level of service, as well as to gain wider recognition, it is necessary to attract renowned international hospitality brands. There are five major property operating models for hotels/resorts, four of them including an international hospitality brand.
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Figure 137. Property operating models
THR highly recommends organising activities aimed at creating awareness among local investors and hotel/resort owners regarding the five different operating models and their corresponding benefits. However, based on THR experience, it is advisable that relevant authorities promote the management model. It is the one that international hospitality brands are most willing to accept and it offers greater return on investment potential for local investors and companies. The relevant authorities need to approach and establish good relationships with different brands and promote different possibilities in Cyprus. They should also encourage the local investors and companies to reach out and do the same. Some of the brands that should be targeted are listed below.
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Table 107. Examples of international hospitality brands to be targeted Company
Brands •
St. Regis
•
The Luxury Collection
•
The Ritz-Carlton
•
JW Marriott
•
InterContinental Hotels & Resorts
•
Hilton Hotels & Resorts
•
Radisson Blu
•
Le Meridien
•
Sheraton
•
Westin Hotels
•
W Hotels
•
Marriott Hotels & Resorts
•
Conrad Hotels & Resorts
Note: Starwood Hotels & Resorts were recently acquired by Marriott International, hence the point of contact is the same
Additional international brands that could be approached are Kempinski Hotels, Four Seasons Hotels & Resorts, Hyatt Regency, Grand Hyatt, Jumeirah Hotels & Resorts, and Sofitel, among others. All of them have corporate websites offering information about their portfolio of brands, financial information, and contact details. Action 10. Promote the development of 150 to 250 business units (MSMEs) related to shopping, wine and gastronomy, entertainment, etc. in the main tourism areas. The economy in Cyprus is dominated by small enterprises with over 60.000 MSMEs accounting for more than 80% of the country jobs. Up to 95% of the MSMEs employ less than 10 persons, allowing for a broad distribution of the income. However, the high proportion of MSMEs also presents a risk of lagging behind and not being able to fully realise the potential for tourism development. This is because tourism requires in-depth knowledge of the international markets and business practices. Since the integration of Cyprus in the EU, the government has harmonised its support to MSMEs, allowing them to confront the increasing competition in a global economic environment, and to move into new market opportunities available. Nevertheless, additional efforts are needed for tourism MSMEs to reap the benefits from the implementation of the Cyprus Tourism Strategy. Apart from nurturing the development of all types of MSMEs throughout the island, it is crucial to develop an additional 150 to 250 SMEs in the coastal areas focused in further developing the Sun & Sea offering. To do so, a business development centre for tourism MSMEs should be created with the purpose of providing services to entrepreneurs (technical assistance, training, access to finance, facilitating bureaucratic processes, etc.). This should include a program of specialised training for new entrepreneurs on how to launch and manage businesses directly or indirectly related with the tourism activity (aligned with the new strategy and/or taking advantage of upstream and downstream linkages along the value chain).
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A funding grant will be set-up by the NTA in order to further facilitate the development of MSMEs. This action must be coordinated with the “MSME’s development support” initiative.
Priority 5. Successful marketing / communication is established To achieve this, Cyprus needs to do the following: •
Position Cyprus in the mind of consumers as an attractive Sun & Sea destination
Action 11. Position Cyprus in the mind of consumers as an attractive Sun & Sea destination In order to position Cyprus as an attractive Sun & Sea destination, the new product value resulting from this plan has to be properly communicated to target segments in key source markets. To this end, annual communication plans should be prepared to define the activities, channels, partners, and budget per source market. Smart use of online channels and good relationships with the travel media will be key to reaching the markets at a reasonable cost. Additionally, some carefully selected advertising can be used (airports, campaigns in cities –for example in public buses-, etc.). Potential tourists can also be reached through travel shows (not necessarily the largest ones, but those organised at regional and local levels in the source markets), and through a number of innovative activities and partnerships that the NTA offices abroad should help to identify. For example, photo exhibits and booths in commercial centres in selected cities. Last but not least, agreements with tour operators interested in selling Cyprus will lead to good and measurable results. Those usually include paid pages in the catalogues, landing pages, microsites and banners on their websites, and co-founding activities to educate large networks of travel agents.
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Action Plan Implementation Road map Table 108. Overview of Sun & Sea actions by priority, type, planning and budgets Action
Priority
Action 1. Target the right segments for the Sun Low & Sea product Action 2. Target the right source markets for the Low Sun & Sea products Action 3 Provide an innovative and High differentiated concept of beaches Action 4. Operate an attractive portfolio of High activities, excursions, and experiences along the coast and inland Action 5. Completely eliminate the high level of High visual pollution in the coastal areas Action 6. Manage the tourist areas in an Medium integrated and sustainable way Action 7. Measure the overall customer Medium satisfaction in the coastal area Action 8. Low Educate employees at all levels Action 9. Attract renowned international Medium hospitality brands (hotel/resort operators) Action 10. Promote the development of 150 to 250 business units (MSMEs) related to Medium shopping, wine and gastronomy, entertainment, etc. in the main tourism areas Action 11. Position Cyprus in the mind of High consumers as an attractive Sun & Sea destination
Type
Budget (.000 â&#x201A;Ź)
Timetable
<2 yrs 2-5 yrs >5 yrs
Marketing
5.5911
4
Marketing
5.5911
4
Marketing/ Regulatory/ 1.3622 Infrastructure
4
4
Marketing
2.996
4
4
4
Incentives
4.6653
4
4
4
Regulatory
1.090
4
4
4
Support
3554
4
4
4
Education
5025
4
Marketing/ Incentives
2696
4
4
Incentives
2.5207
4
4
Marketing
1.1588
4
4
4
1) Budget for this action is included in Init. 11 2) Budget is to study and develop the concept, its financial viability, adapt (if necessary) the regulations and promote the use of this technology in some of the new resorts and TZNI. It does not include the cost of its development which is part of the budgeted investment for infrastructures and resort development. 3) Budget for this action is included in Init. 3 4) Budget for this action is included in Init. 22 5) Budget for this action is included in Init. 18 6) Budget for this action is included in Init. 7; 7) Budget for this action is included in Init. 8 8) Budget for this action is included in Init. 10 Updated version 23.03.2017
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Infrastructure/equipment required The development of an attractive and unique Sun & Sea customer value proposition requires a competitive supporting infrastructure. The product plan requires new infrastructure and equipment capable of revamping current assets and incorporate innovative concepts. The Sun & Sea product can be enhanced with a unique and exceptional pool accompanied by a menu of themed beaches across Cyprus. They may be needed, in order to create a year-round product that at the same time targets different age groups and desires (including adults & families). The creation of different themes aims to have more focused appeal.
Large Pool A newly built pool integrated with a resort will sprawl next to the Mediterranean, with 1 km long and 75 metres wide with variable depths will allow to extend the swimming season taking advantage of Cypriot unique climate and warm winters. A modern filtration system made of pumps and sluices will allow fresh sea water from the Mediterranean into the pool, that will be conveniently pumped back out to create a continuous circulation. An environmentalfriendly filtration system will decrease pool management’s need for harmful chemicals or an industrial-sized arsenal of filtration equipment. Figure 138. Outdoor pool in San Alfonso del Mar Resort in Chile
Source: Google images
Premium beaches collection Maximum care and attention should be put into the further development of the Sun & Sea premium product. The Blue Flag beaches, could be further enhanced, themed, and complemented with: •
High quality sand, and daily cleaning will contribute to create a unique environment.
•
Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, and enough parking spaces;
•
A complementary offer of water sports should include from windsurfing to sea-kayaking and jet ski hire.
Activities, excursions, and experiences The Sun & Sea product will require also a complementary offer of activities, excursions, and experiences to be developed along the coast as well as inland. The activation of sites and tourist attractions includes both the upgrading of sites and tourism products as part of the Updated version 23.03.2017
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development of Top Experiences and Itineraries, well as the creation of new tourism services and facilities in the areas specified in the Spatial Development Plan. At the same time, new tourism accommodations in 4 th generation mixed-use resorts will contribute to generate activities and experiences:
c.
•
The new town centres in 4th generation resorts will allow for sharing cultural enrichment, enjoying a relaxing time, having fun in the sun, or with outdoor sports and activities, with many possibilities for every one’s preferences.
•
A variety of dining and sightseeing choices as well as sports, games, crafts, and activities, that cater to all ages and child care, are products to be promoted and developed.
Actions to provide infrastructure/equipment required The development of the required Sun & Sea infrastructure will require to: •
Identify potential areas to develop a large pool to be integrated into a new tourism hospitality development: - The pool will require modern filtration equipment that provides a hygienic environment integrated within a resort compound; - An impressive landscaping needs to surround the environment to create different and unique ambiances; - The NTA and the CEA should encourage the development of the project, not as a standalone construction but integrated within new mixed-use resorts;
d.
•
Commission a feasibility and technical study to develop the large pool;
•
Improve beaches ensuring a high quality of sand, with daily cleaning and filtering;
•
Invest in providing services for beach users that will require storage facilities and small constructions;
•
Ensure maximum care and attention is placed into the further development of any complementary products related to Sun & Sea;
•
Promote the activation of sites and tourism products aligned with the Cyprus experiences.
Estimated budget for infrastructure/equipment The innovative pools and themed beaches are part of a Top Experience to be developed in Cyprus within the 30 M€ budget allocated (as an average). The budget has been allocated, considering that NTA and CEA will lead the project design and feasibility studies of the large pool and the upgrading of beach facilities. Additionally, the experiential system has a budget of 15 M€ per tourism site or attraction to be developed and 5 M € per site or attraction to be improved. The construction of the large pool should be integrated in a tourism hospitality project servicing a whole resort and should be privately managed. The Government can subsidise the investor with special taxation incentives for the development of the large pool.
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Table 109. Infrastructure investment requirements for Sun & Sea product development Budget (million €) (1)
Description •
1 large pool – 1 km long and 75 metres wide: 500 € / m2 (includes excavation, construction, and filtration equipment)
•
10 beaches: 250.000 €/beach for refurbishment and upgrading of facilities
37,5 2,5
Total
40,0
Note: Specified costs are inclusive of 6% cost for feasibility studies, technical services, and project management to be funded by the Government. Source: Market research of Crystal Lagoon at San Alfonso del Mar resort in Chile and comparable sites.
e.
Stakeholders involved Table 110. Stakeholders involved Responsible National Tourism Authority
Accountable
x
National Tourism Planning unit
x
Cyprus Experience Agency
x
InvestCyprus
x
Private sector
x
Local communities
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Consulted
x
Informed
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3. Itineraries & Culture 3.1
Itineraries & Culture market potential
3.2
Actions to be taken for successful product development
3.3
Action Plan implementation
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Itineraries & Culture market potential The Itineraries & Culture segment can be defined as touristic routes aimed at experiencing and discovering the local history and culture, where cultural heritage becomes the main resource and touristic asset.
a. Itineraries & Culture market size in Europe Based on THR analysis, the total size of the European Itineraries & Culture market is estimated to be 81,6 million trips. According to the ITB World Travel Trends 2015/2016, the number of arrivals related to Itineraries & Culture grew by 21% in the period 2007-2014. Due to their vast historical and cultural heritage, European countries are globally leading destinations for this type of trips. Figure 139. Most popular Itineraries & Culture destinations Most popular destinations for Itineraries
Most popular destinations for culture 37%
25%
15%
14%
19% 9%
16%
8% 8%
USA
Italy
Europe
Spain
France
Italy
7%
Spain England France Greece
Source: Cyprus brand adoption survey
Russia represents the largest source market, accounting for 23% of the total itineraries & culture related trips from Europe, followed by Germany (15%) and the UK (13%). Figure 140. Itineraries & Culture outbound trips from Europe by source markets
Source market Other 34%
Ukraine 6%
Russia 23%
Germany 15% UK 13% France 9%
Size of the I&C segment (# of arrivals)
Russia
18.588.468
Germany
12.008.520
UK
10.554.647
France
7.202.394
Ukraine
4.608.624
Source: Estimates based on Eurostat, European Commission, and Cyprus Brand Adoption Survey
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b. Current Itineraries & Culture demand for Cyprus The current contribution of the Itineraries & Culture segment to the tourism industry in Cyprus has been estimated based on the following inputs and assumptions: •
There was a total of 2.659.405 international arrivals to Cyprus in 2015 42;
•
Leisure (holiday) arrivals have an 84% share of total arrivals to Cyprus 43;
•
It is assumed that Itineraries & Culture arrivals have a 5% share of the total leisure arrivals;
•
Total tourism revenues in Cyprus in 2015 were equal to 2.112,1 million €44;
•
It is assumed that tourists arriving for Itineraries & Culture spend on average 50% more per day than Sun & Sea tourists45. Table 111. Estimate of Itineraries & Culture tourist arrivals and revenues in Cyprus in 2015 Itineraries & Culture demand in Cyprus (in 2015)
Share in total tourist arrivals/revenues in Cyprus
110.000 103,8
4% 5%
Arrivals* Revenues (in million €)
*Arrival estimates have been rounded to the nearest multiplier of 10.000
c. Cyprus short/mid-term potential in the Itineraries & Culture segment Based on the same analysis, THR estimates that Cyprus’ short/mid-term potential (over the course of 5 years) in the European outbound market for Itineraries & Culture is ≈14,9 million trips or 18% of the total market size. Figure 141. Cyprus short/mid-term potential in European outbound Itineraries & Culture trips
18% (≈14,9 mil trips)
Top 5 source market for Cyprus
Cyprus potential in the I&C segment (# of arrivals)
Russia
4.060.199
UK
2.044.628
Germany
1.948.846
France
1.751.323
Ukraine
742.652
Source: Estimates based on Eurostat, European Commission, and Cyprus Brand Adoption Survey
Statistics on tourism, Republic of Cyprus Statistical Service THR based on Republic of Cyprus Statistical Service 44 Statistics on tourism, Republic of Cyprus Statistical Service 45 THR internal database 42 43
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d. Cyprus arrivals and revenue targets in the Itineraries & Culture segment by 2030 Then, in order to set the targets for the upcoming years, the following assumptions have been made: •
Over a 5-year period (until 2020), Cyprus will manage to attract 5% of the estimated Itineraries & Culture potential: ≈744 thousand additional Itineraries & Culture arrivals over 5 years (it is assumed that additional demand generated will be equally split over 5 years);
•
Due to the overall product enhancement and the development of new experiences, the Itineraries & Culture arrivals are expected to grow 9% p.a. (a double rate than the estimated 4,5% average growth p.a. for the period 2021-2030 defined by the Premium demand model developed by THR).
•
Consumer prices in Cyprus will increase by 6% until 2020 with additional 17% increase in the 2020-202546 period and 10% in the 2025-2030 period;
•
Due to the overall product enhancement and the development of new experiences, tourist expenditure per stay/arrival will increase by 3% every 5 years.
Based on these assumptions, the following arrivals and revenue targets have been set: Table 112. Itineraries & Culture tourist arrivals & revenue targets Arrivals* Revenues (in million €)
2020
2025
2030
260.000 264,4
400.000 462,3
620.000 793,8
*Arrival targets have been rounded to the nearest multiplier of 10.000
46
Tourism Economics
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Actions to be taken for successful product development
3.2.1
Development driven by a solid business model
442
The Itineraries and Culture business model for Cyprus will contribute to spread tourism demand and income across the country, but most important to address seasonality generating additional demand along the year. As a result, the Itineraries and Culture model will contribute to decrease tourism pressure on the coastline, and support the distribution of wealth along the different districts. The Itineraries and Culture business model is developed under the Grand Tour of Cyprus concept. The purpose of the Grand Tour of Cyprus is to provide a complete itinerary, that attracts discovery trips to Cyprus. This itinerary (allowing variations) aims to enable visitors to explore the main tourist attractions (especially cultural ones) and experiencing the country. The Grand Tour of Cyprus is an itinerary designed for travellers seeking for unique cultural experiences. Generally, this profile comprises independent tourists with a high level of education and income, who share a taste for culture and are interested in exploring new destinations. To attract those travellers, Cyprusâ&#x20AC;&#x2122; proposal is based on an attractive mix of natural and cultural attractions with a touch of authenticity that is unique in the region. A set of well-established routes and innovative experiences will clearly differentiate Cyprus. Figure 142. Itineraries & Culture product business model
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3.2.2
443
The Action Plan: 5 priorities The actions for successful product development are summarised in the following figure, positioned on the business model canvas according to the component they will impact the most. Figure 143. Overview of Itineraries & Culture product development actions
For Cyprus to deliver a world-class Itineraries & Culture experience, it needs to make sure that: 1. The right segments have been targeted 2. Cyprus offers these targets an attractive customer value proposition (CVP) 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction 4. The right resources and partners are used for each segment 5. Successful marketing / communication is established Updated version 23.03.2017
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Priority 1. The right segments have been targeted To achieve this, Cyprus needs to do the following: •
Target the right segments for the “Grand Tour of Cyprus”
•
Target the right source markets for the “Grand Tour of Cyprus”
Action 1. Target the right segments for the “Grand Tour of Cyprus” In order to maximise the return on marketing investment (ROMI) necessary for the successful positioning of the “Grand Tour of Cyprus” in the markets, a market strategy identifying source markets and segments to be targeted has to be developed and properly communicated to key stakeholders. The preliminary analysis has shown that there are 8 main groups of target segments, 2 of them representing high potential targets for Cyprus. Figure 144. Target segments for Itineraries & Culture Not a target
Group
0
1
2
Target segments
3
4
Target for Cyprus
Description
The Special Interest Tour Group Motivated The Special Interest Cultural Tourists Independent Travellers
A tailored holiday group interested in culture that is the specific “reason to visit” Independent travellers with specific cultural reasons to visit: gastro-tourists, heritage tourists, etc. Couple travelling by car visiting different The Independent places in the same trip and seeking a Couple connection with the local culture and people. Couples and groups of friends checking The young hip visitor in the destination for a weekend or short break. Inspired Cultural Tourists Pre-booked tours of middle-aged The Classic Tour holidaymakers. Most likely to visit many Group cultural attractions and sites. Adventurous people seeking experiences that will show them the “soul” of the Backpackers places visited. Tend to prefer hostels and budget hotels. Married w/o kids travelling to experience the country and its people. They are Social Adventurers interested in local spots and want to Incidental understand the local culture. Cultural Tourists Most likely students seeking cultural Educational Groups experiences. Likely to search for must-see sites during activities organised by school. Not a target
0
1
2
3
Target
4
2 4
4
1 2
0
3
1 Target
Source: Adapted from “Cultural Tourism Making it Work for You”, A New Strategy for Cultural Tourism in Ireland
Based on these inputs, The National Tourism Authority has to further develop target segments profiles including, among other: socio-economic and demographic information, trends, information and booking habits, etc.
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Action 2. Target the right source markets for the “Grand Tour of Cyprus” Preliminary source market prioritization for the Itineraries & Culture product has been developed by THR and is shown in the figure below. Due to low availability of data and information, prioritization has been done for the 6 source markets included in the Cyprus Brand Adoption Research. THR suggest that similar prioritization matrix is prepared once data for additional source markets has been gathered. Figure 145. Preliminary source market prioritization for Itineraries & Culture trips to Cyprus
Source: Cyprus Brand Adoption Research
Priority 2. Cyprus offers these targets an attractive customer value proposition (CVP) To achieve this, Cyprus needs to do the following: •
Develop and manage a portfolio of diverse and attractive routes
•
Design and manage an experiential system of “Grand Tour of Cyprus”
Action 3. Develop and manage a portfolio of diverse and attractive routes Figure 146. Illustrative example of routes in Cyprus A portfolio of selected cultural touring routes has to be developed, including gastronomy and wine, cultural heritage, natural heritage, main heritage attractions, etc. The impact on environmental, social, and economic sustainability should also be considered, providing opportunities for a more even distribution of the tourism flows and their benefits all over the island.
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Action 4. Design and manage an experiential system of “Grand Tour of Cyprus” Offering a network of attractive routes is not enough to make a breakthrough in the market. An example of what is currently on offer are the religious routes with rather descriptive names not very meaningful to foreigners, mainly suggesting series of visits to different heritage sites. Figure 147. Current religious routes of Cyprus do not communicate experience
Source: Visit Cyprus website (www.visitcyprus.com)
To grow this product, once the portfolio of routes is defined (number of routes, itineraries, and attractive names), the NTA has to lead the development of a system of experiences along each route. For illustration purposes, examples of names suggesting more attractive and participative travel experiences could be “The route of Aphrodite”, “Richard Lionheart and the King of Wines route” or “Venetian trade routes”. For each experience added to the route, key “moments of truth” have to be identified. An illustrative example would be drinking Commandaria wine in the middle of the vineyards at the end of the “Richard Lionheart and the King of Wines route”. Additionally, the new enhanced routes should be properly communicated through the official portals and online channels, as well as through other communication and promotional activities.
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Priority 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction To achieve this, Cyprus needs to do the following: •
Develop a dedicated “Grand Tour of Cyprus” website
•
Coordinate the development of the Grand Tour of Cyprus with rent-a-car companies
Action 5. Develop a dedicated “Grand Tour of Cyprus” website A specific website or microsite within the official tourism portal needs to be developed, explaining the philosophy of the Grand Tour of Cyprus and the reasons to choose Cyprus as a travel destination. Content will include seasonal tips, ideas on what to do at each stage of the trip, must-see stops, recommendations, etc. It will include a planning tool that has to be user-friendly, providing personalised information to customers depending on their preferences. The Grand Tour of Switzerland site is considered to be one of the most comprehensive platforms to discover a country, and can serve as a good reference. Figure 148. Grand Tour of Switzerland platform
Source: Grand Tour of Switzerland (grandtour.myswitzerland.com)
The platform needs to allow travellers to obtain further information and to book services and experiences directly, putting in contact travellers with specialised local operators and service providers along the tour. This tool will make offers available and will provide contacts of local operators managing attractions sites and experiences and providing services such as car and motorcycle rentals, accommodation services, restaurants, etc. Action 6. Coordinate the development of the Grand Tour of Cyprus with rent-a-car companies As the Grand Tour of Cyprus will require a fleet of cars, it is of utmost importance that the development and promotion of the route are coordinated with rent-a-car companies. In particular, to align demand forecasts and availability of vehicles and ensure agreed service standards. For example: Updated version 23.03.2017
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•
The tour will be promoted in the website of the rent-a-car companies and a percentage of the fleet should be allocated to clients of the Grand Tour of Cyprus (based on demand forecasts).
•
Customers will receive a printed piece or an App including the main attractions, activities, and services along the route, as well as some coupons or similar (agreed with other service suppliers) that will add value to the package, particularly in the low and shoulder seasons.
•
Travellers will enjoy the pleasure of driving a first-class brand vehicle along the route. The car / motorcycle will be fully equipped to enjoy a nice, safe drive.
•
If any problem should occur with the car / motorcycle, the traveller will be able to get in touch with the rent-a-car service 24 hours/7 days a week. In less than 2 hours, help will be available, and if the problem cannot be solved, a new vehicle will be provided.
Priority 4. The right resources and partners are used for each segment To achieve this, Cyprus needs to do the following: •
Establish a “Grand Tour of Cyprus” accredited network of partners
•
Conduct a specialised educational program for different stakeholder groups
•
Attract renowned international hospitality brands
Action 7. Establish a "Grand Tour of Cyprus" accredited network of partners For Cyprus to successfully develop the “Grand Tour of Cyprus”, a network of highly reliable partners –accommodation, restaurants, rental companies– should be developed. Certain criteria and standards must be agreed and met by participating companies, which will obtain the label of the Grand Tour of Cyprus (the label should be designed as a part of the overall brand and identity design). Again, the Grand Tour of Switzerland provides an example. Figure 149. Hotels partners for Grand Tour of Switzerland (selection)
Source: Grand Tour of Switzerland website (www.myswitzerland.com)
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Action 8. Conduct specialised educational programs for different stakeholder groups Setting up a successful “Grand Tour of Cyprus” will require collaboration among different stakeholders and a training program and workshops should be organised targeting key stakeholder groups. The main purpose will be to introduce the concept of the Grand Tour as part of a broader tourism strategy, foster partnerships, reach agreements on the desired levels of service, come up with ideas for experiences and key moments of truth, discuss how to implement them, etc. Action 9. Attract renowned international hospitality brands In order for hotels to provide the highest level of services, as well as gain wider recognition, it is necessary to attract renowned international hospitality brands. Brands such as Relais & Chateaux, Small Luxury Hotels of the World, Autograph Collection, Andaz, associated with boutique or heritage hotels, represent a perfect fit for the “Grand Tour of Cyprus” accommodation operators. There are 5 major property operating models which are shown in the figure below. Figure 150. Property operating models
THR highly recommends that relevant authorities educate local hotel owners on the five different operating models and their benefits. However, based on THR experience, for the Grand Tour of Cyprus, the franchise model should be given priority (the management model is being suggested for the Sun & Sea product). Relevant authorities need to establish good relationships with different brands and promote different possibilities in Cyprus, but also encourage the local investors and companies to reach out and do it themselves.
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The NTA should offer incentives to those hotels that manage to be associated with a brand. Examples of incentives are making the franchise or affiliation costs for the first 2 years’ tax deductible and/or have access to special funding lines to finance improvements needed to be eligible for the franchise, etc.
Priority 5. Successful marketing / communication is established To achieve this, Cyprus needs to do the following: •
Develop the brand “Grand Tour of Cyprus” website
•
Implement a communication strategy for the “Grand Tour of Cyprus”
Action 10. Develop the brand “Grand Tour of Cyprus” For the “Grand Tour of Cyprus” to achieve Figure 151. Branding visuals for different a good positioning in the market, it is cultural itineraries & routes necessary to develop a specific brand. Based on the brand prism methodology (presented in the separate branding plan), different elements of the brand should be developed in order to identify the brand essence. Next steps will be The Grand Tour Routes the similar to those recommended for the Grand Tour of (Nottinghamshire Coffee Cultural National Tourism Brand, and outsourcing Switzerland and Derbyshire) Landscapes the work to a specialised agency is Source: www.rutasdelpaisajeculturalcafetero.com, advised in order to achieve professional www.thegrandtour.uk.com, results. An option is to include both works in the same tender. www.myswitzerland.com Action 11. Implement a communication strategy for the “Grand Tour of Cyprus” A specific communication plan, embedded in the national plan, has to be developed for the “Grand Tour of Cyprus”. The prioritised source markets should be the main targets. Special messages and content (copy, photos, and short videos) have to be developed and included in all official online channels (tourism portal, and official social media, national and regional). Special photo contests can be used to engage tourists and promote customer generated content. Local operators (hotels, DMCs and other), should be encouraged to include specific contents about the Grand Tour in their websites, and specific training and technical assistance should be provided. Press releases will be prepared to announce the launching of the Grand Tour followed by systematic press releases announcing new members joining the tour, upcoming initiatives, and events along the tour, etc. A presentation and a short promotional video targeting the international travel trade will be prepared to be used in trade shows and workshops. In any case, it is important to build synergies with other promotional activities, and all platforms and promotional opportunities available should be used to promote the Grand Tour on an ongoing basis.
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Action plan for the Implementation Road Map Table 113. Overview of Itineraries & Culture actions by priority, type, planning and budgets Action Action 1. Target the right segments for the “Grand Tour of Cyprus Action 2. Target the right source markets for the “Grand Tour of Cyprus Action 3. Develop and manage a portfolio of diverse and attractive routes Action 4. Design and manage an experiential system of “Grand Tour of Cyprus” Action 5. Develop a dedicated “Gran Tour of Cyprus” website Action 6. Coordinate the development of “Grand Tour of Cyprus with rent-a-car companies” Action 7. Develop and manage a "Grand Tour of Cyprus" accredited network of partners Action 8. Conduct specialised educational programs for different stakeholder groups Action 9. Attract renowned international hospitality brands Action 10. Develop the brand “Grand Tour of Cyprus” Action 11. Implement a communication strategy for the “Grand Tour of Cyprus”
Priority
Type
Budget (.000 €)
Timetable
<2 yrs 2-5 yrs >5 yrs
Low
Marketing
3.3991
4
Low
Marketing
3.3991
4
High
Infrastructure 763
4
4
4
High
Marketing
2.034
4
4
4
High
Marketing
2191
4
Medium
Support
203
4
Medium
Marketing/ Regulatory
305
4
4
Medium
Education
301
4
4
Medium
Marketing/ Incentives
2242
4
4
High
Marketing
508
4
High
Marketing
1271
4
4
4
4
1) Budget for this action is included in Init. 11 2) Budget for this action is included Init. 18
b.
Infrastructure/equipment required Cyprus has a dense road-network and the motorway network connects the main tourism centres, sites, and attractions. In order to develop the Grand Tour of Cyprus, there are no major additional roads to be developed that could eventually contribute to enhance connectivity around the country and expand the portfolio of the diverse and attractive routes. Minor developments may be needed such as cycling trails, viewpoints, picnic spaces,
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etc. all of them oriented to complement the existing network, to make itineraries more comfortable, and to ensure the Grand Tour of Cyprus is an unmatchable experience. A dedicated signposting for the itineraries will be needed to create a coherent visual image for the destination. In order to ensure that the route is clearly identifiable, indicative signposts and directions should be placed along the main highways and roads, as well as close to sites and attractions. Additionally, Cyprus should have 20 selected viewpoints prepared for 5 to 10 vehicles to safely stop and tourists spend some time enjoying the views and rest in between the itinerary. Parking areas with recreational facilities (e.g. picnic tables, shelters, toilets, waste bins, etc.) would be built or existing ones upgraded in order to provide a premium service. The required accommodation facilities that allow tourists to stop along the route will be built in strategic locations along the route. Primarily they are expected to be boutique hotels, as standalone or isolated units, not resorts. The specific locations and number of keys required for these facilities are not part of the current strategy, but they should be aligned with the general guidelines and figures of the Spatial Development Plan. They should be studied in detail when developing individual Tourism Development Master Plans for each area.
c.
Actions to provide infrastructure/equipment required The development of the required Itineraries & Culture infrastructure/equipment will require to:
d.
•
Assess road network to review current signage and directions of sites and attractions;
•
Estimate demands and characteristics of new signposts to be placed along the route;
•
Create imagery and standard signposting for the Grand Tour of Cyprus;
•
Install signage and remove outdated signs and directions;
•
Develop viewpoint concept with services and facilities suitable for the Grand Tour of Cyprus;
•
Identify existing viewpoints and potential areas with impressive views to develop a viewpoint concept for the Grand Tour of Cyprus;
•
Create/refurbish viewpoints along the route.
Estimated budget for infrastructure/equipment Budget for the implementation is included in Experiential System as a Top Experience to be developed. The 30 M € allocated for the Grand Tour of Cyprus, will cover both infrastructural and equipment requirements. Hospitality accommodation development costs are not taken into account as the final location, typology, and quality as not meant to be specified at this stage, but are considered among the national and regional budgets.
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Table 114. Infrastructure investment requirements for Itineraries & Culture Budget (million €) (1)
Description •
•
Signposting every 5 km 1.500 km of routes (750 both ways) plus 200 sites & attractions 100 €/sign
0,075
20 Viewpoints created/upgraded with parking areas and facilities 12.500 €/site
0,250
Total
0,325
Note: Specified costs are inclusive of 6% cost for feasibility studies, technical services, and project management to be funded by the Government. Source: Figures estimated from market research.
e.
Stakeholders involved Table 115. Stakeholders involved Responsible
National Tourism Authority
Accountable
x
National Tourism Planning unit
x
InvestCyprus
x
Private sector
x
Local communities
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x
Informed
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4. Cycling Tourism 4.1
Cycling tourism market potential
4.2
Actions to be taken for successful product development
4.3
Action Plan implementation
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Cycling tourism market potential Cycling tourism refers to leisure trips where cycling is the main purpose. The bicycle in this context is not considered a mean of transport as it becomes an integral part of the overall tourist experience. Cycling tourism is considered as a niche market within adventure tourism.
4.1.1
Cycling tourism market size in Europe Europe is one of the most important source regions for cycling tourism. According to the Adventure Tourism Trade Association, 42% of bookings for cycling trips originated from North America, 38% from Europe, 6% from Oceania. The cycling market in Europe is driven by increased demand for active holidays, an increasing interest in “green” and sustainable tourism activities and growth in countryside recreation and holidays. Although accurate data and statistics on outbound cycling tourism are not easily available, it is reasonable to assume that countries with the highest relative and absolute use of bicycles as the most frequent use of transport represent the main outbound source markets. The Netherlands is by far the leading country in Europe by the relative use of a bicycle as the most used mode of transport in 2014, with 36% of the population stating so. Nordic countries, Denmark, Sweden, and Finland, also show a high usage of bicycles, on average 16% of the population. At European level, the average share of the population that uses bicycles as a mode of transport is 8%47. Figure 152. Top 10 EU countries by relative use of bicycle as most used mode of transport, in 2014, % of the total population 40 35 30 25 20 15 10 5 0
Source: European Commission (2015), Eurobarometer “Quality of Transport”
In Europe, an estimated total of 41 million people uses the bicycle as the most frequent mode of transport. With an estimate of 9 million bicycle users, Germany is by far the largest market in volume of bicycle users, followed by The Netherlands with an estimate of 6 million users.
47
European Commission (2015), Eurobarometer “Quality of Transport”
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Figure 153. Top 10 EU countries by absolute use of bicycle as most used mode of transport, in 2014, in millions 10 9 8 7 6 5 4 3 2 1 0
Source: European Commission (2015), Eurobarometer â&#x20AC;&#x153;Quality of Transportâ&#x20AC;?
Industry experts estimate that around 10% of bicycle users travels abroad on cycling trips 48, resulting in a total of 4,1 million of potential cycling tourists in the EU. Based on this analysis, it is reasonable to assume that Germany and The Netherlands represent the main source markets for outbound cycling tourism. Taking into account the relative usage of bicycles and their purchasing power, Nordic countries - Denmark, Sweden, Finland, and Norway (the latter one is not included in the Eurobarometer but it is assumed that shares similar behaviour), are also considered to be highly attractive markets for outbound cycling tourism. Europe is by far the most popular cycling tourism destination, and close to three quarters of the cycling tourism itineraries worldwide are in Europe. Figure 154. Location of offered cycling tourism itineraries by continent in 2014 Central America & Caribbean Africa 1% 2% North America 3% South America 9%
Pacific 1% Middle East 1%
Asia 9% Europe 74%
Source: CBI Product Factsheet: Cycling tourism from Europe
48
CBI Product Factsheet: Cycling tourism from Europe
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457
Current cycling tourism demand for Cyprus In order to estimate the contribution of cycling tourism in Cyprus, the following inputs and assumptions have been used: •
There was a total of 2.659.405 international arrivals to Cyprus in 2015 49;
•
Leisure (holiday) arrivals have an 84% share in total arrivals to Cyprus 50;
•
There was a total of 3.555 international cycling tourism arrivals in 2013 51;
•
It is assumed that between 2013 and 2015 international cycling arrivals grew by 31% p.a., following the growth trend from the period 2009-201352;
•
Total tourism revenues in Cyprus in 2015 were equal to 2.112,1 million €53;
•
It is assumed that cycling tourists spend on average the same amount of money as other sports tourists, 131 €/day54 in 2013;
•
According to Tourism Economics, consumer prices in Cyprus decreased by 1,8% in the period 2013-2015. It is assumed that the expenditure per day of cycling tourists followed, resulting in an average expenditure per day of 128,6 €;
•
It is assumed that the average length of stay of cycling tourists in Cyprus is 7 days 55.
Based on these inputs and assumptions the estimated current cycling tourism demand in Cyprus is as follows. Table 116. Cycling tourism arrivals and revenues in Cyprus in 2015
Arrivals Revenues (in .000 €)
a.
Cycling tourism demand in Cyprus (in 2015)
Share in total tourist arrivals/revenues in Cyprus
6.100 5.491,9
0,2% 0,3%
Cyprus arrivals and revenue targets in the cycling tourism segment until 2030 In order to set the targets for the upcoming years, the following assumptions are being made: •
Over the period of 5 years (until 2020), Cyprus will significantly develop the cycling tourism offer, which will lead to a 31% increase of arrivals p.a. (in line with historic trend);
•
In the period 2021-2025, the number of cycling tourism arrivals to Cyprus will experience a slowdown, however still growing strong at a 15% p.a.;
•
In the period 2026-2030, Cycling tourism arrivals will grow at 9% p.a., double average growth rate of total arrivals to Cyprus (4,5% p.a. according to the Premium model);
•
Consumer prices in Cyprus will further increase by 6% until 2020 and 17% by 2025, according to Tourism Economics;
•
In the period 2025-2030, consumer prices in Cyprus will increase by further 10%;
•
Due to the overall product enhancement and development of new experiences, tourist expenditure per stay/arrival will increase by 3% every 5 years
Statistics on tourism, Republic of Cyprus Statistical Service Republic of Cyprus Statistical Service 51 Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 52 Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 53 Statistics on tourism, Republic of Cyprus Statistical Service 54 Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 55 Bicycle Tourism 2014 Survey, Adventure Travel Trade Association 49 50
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Based on these assumptions, the following arrivals and revenue targets have been set: Table 117. Cycling tourism arrival & revenue targets Arrivals Revenues (in million €)
2020
2025
2030
25.000 23,1
45.000 52,8
75.000 90,8
4.2
Actions to be taken for successful product development
4.2.1
Development driven by a solid business model “CYcling Experience” is designed for travellers seeking to explore Cyprus through a network of thematic cycling routes that will allow them to see and experience areas of Cyprus unavailable by car or other similar means of transport. Cycling tourists are generally well educated people with higher levels of income, who see cycling as a form of sport or physical exercise that allows them to enjoy and explore nature based landscapes and sceneries. In order to attract them, the proposal is based on a network of attractive thematic cycling routes through different areas of Cyprus, along the coast and inland. In this sense, small size of Cyprus can become its competitive advantage, as it will provide cyclists with an opportunity to experience the island in its full glory. Additionally, great weather conditions in combination with low traffic density creates a highly attractive environment for cyclists. Figure 155. Cycling Tourism product business model
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459
The Action Plan: 5 priorities The actions for successful product development are summarised in the following figure, positioned on the business model canvas according to the component they will impact the most. Figure 156. Overview of Cycling Tourism product development actions
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For Cyprus to deliver a world-class Cycling tourism experience, it needs to make sure that: 1. The right segments have been targeted 2. Cyprus offers these targets an attractive customer value proposition (CVP) 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction 4. The right resources and partners are used for each segment 5. Successful marketing / communication is established
Priority 1. The right segments have been targeted To achieve this, Cyprus needs to do the following: •
Target the right segments for cycling tourism
•
Target the right source markets for cycling tourism
Action 1. Target the right segments for cycling tourism In order to maximise the return on marketing investment (ROMI) that is necessary for successful positioning of Cyprus on the cycling tourism market, a market strategy that will identify source markets and segments to be targeted has to be developed and properly communicated to key stakeholders. According to several studies and interviews with cycling tourism experts, some general characteristics of European cycling tourists are: •
They are slightly more often male;
•
They are generally older (40-60 years old);
•
They are generally more highly educated and with higher income;
•
They enjoy cycling as a form of sport or physical exercise;
•
They like to be close to nature;
•
They often travel in couples or small groups;
•
They often arrange their travel and accommodation by themselves.
There are 4 main segments of European cycling tourists.
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Table 118. Cyclist segments Not a target
Frequency of leisure cycling
0 Segments
Low
Infrequent leisure cyclists
Occasional leisure cyclists
Frequent leisure cyclists
Cycling enthusiasts
High
Professional cyclists
1
2
3
4
Description These are people who rarely cycle. They are likely to have cycled as children, but have lapsed as cyclists in adulthood. They may not even have a bicycle, but if they do, the likelihood is that they hardly ever use it. They are especially interested in low traffic cycling and packaged cycling holidays as a mean to see the scenic countryside at a moderate pace. It is estimated that this segment outnumbers any of the other segments. This segment includes people who cycle for pleasure a few times a year, mostly during the summer. They are especially interested in centre-based day cycling rides (between 30-40 kilometres on quiet country roads and low traffic paths). This is estimated to be the second largest segment, which usually offers opportunities for day cycling trips as an additional activity (add-on). These are people who cycle for leisure approximately once or twice a fortnight during the summer, and possibly at least once or twice during the winter as well. They are especially interested in centre-based day cycling rides (between 40-60 kilometres on quiet country roads and low traffic paths). This segment includes people who go cycling for leisure at least once a week, whatever the time of year, although perhaps less frequently during the winter. They generally bring their own bicycle and are especially interested in longer day cycling rides (above 60 kilometres) and independent cycling tour trips. They tend to plan their own rides, using cycling route leaflets for ideas and information. Although this is the smallest segment, it offers interesting opportunities for cycling tourism providers, as cycling enthusiasts are most likely to go on a cycling holiday abroad. Individuals / teams for whom cycling represents a source of income. They travel to cycle, often in order to participate in a race or prepare for the racing season.
Target
Target for Cyprus
1
2
3
4
4
Source: â&#x20AC;&#x153;CBI Product Factsheet: Cycling tourism from Europeâ&#x20AC;? Note: Full ball indicates better target for Cyprus
Action 2. Target the right source markets for cycling tourism Key source markets to be targeted have been prioritised based on the tendency to use bicycles in their everyday lives, assuming that it increases the probability of them travelling abroad on a cycling holiday. The Netherlands and Denmark are the 1 st level priority markets.
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Figure 157. Preliminary source markets prioritization for cycling tourism in Cyprus
Source: European Commission (2015), Eurobarometer “Quality of Transport” Legend: AT-Austria, BE-Belgium, BG-Bulgaria, CZ-Czech Republic, DE-Germany, DL-Denmark, ES-Spain, FR-France, FI-Finland, GR-Greece, HR-Croatia, HU-Hungary, IE-Ireland, IT-Italy, LT-Latvia, LV-Lithuania, NLNetherlands, NO-Norway, PL-Poland, PT-Portugal, RO-Romania, RU-Russia, SE-Sweden, SI-Slovenia, SKSlovakia, UK-United Kingdom
Priority 2. Cyprus offers these targets an attractive customer value proposition (CVP) To achieve this, Cyprus needs to do the following: •
Develop and manage a network of diverse, thematic, and attractive cycling routes
•
Design and manage the experiential system of the routes
Action 3. Develop and manage a network of diverse, thematic, and attractive cycling routes A vast portfolio of over 10 bike trails and routes has to be selected, offering cyclists the chance to explore and experience Cyprus and its natural wonders like few other. Proposed length of the trails is from 5 to 60 km, depending on each individual case. Although some trails can be used by normal tourists who like this sport or want to take it up, the product will be developed considering the cyclotourism sector, be it done by individuals or groups. The mix of cycling trails should include trails of different difficulty, length, level of sensorial and experiential content.
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Routes and trails have to be labelled taking into account several factors such as: •
Districts: Ammochostos, Larnaca, Nicosia, Limassol, Pafos, Troodos, etc.
•
Physical intensity/difficulty of the route: soft, medium, hard;
•
Themes/experiential level: couples, families and friends, adventure, panoramic views, etc.;
•
Type of surface: asphalt, macadam, mixed. It is important to make this distinction as some bikers use road bikes while other prefer mountain bikes. While some mountain bike riders may accept mixed surfaces, road bikers will not ride on non-paved routes.
A signage system needs to be developed and implemented along the network of bike routes and trails, in order to ease the movement of cyclists around the island. Technicalities: •
Number of trails. THR recommends developing a minimum of 10 well designed, equipped and signposted bike trails that also offer all necessary support services. If subsequently it is proven that Cyprus is successful in this market, this number will have to be doubled.
•
Length. The length of the trails will be from 20 to 60 km depending on each individual case. It is also recommended that trails be placed in similar proportions in three large areas: East, West, and Mountain / Rural.
•
Options. However, each trail can be broken down into 2 or 3 sections of different difficulty allowing the cyclist to choose to ride the whole trail or only a section of it. In this way, 10 trails will give rise to 20-30 options.
•
Difficulty. Each Trail will correspond to a certain level of difficulty (according to international standards) and may have sections of different levels.
•
Experiential and sensory level. THR also recommends that the trails and / or options developed have varying degrees of experiential and sensorial content (beauty of the landscape, panoramic views, tourist attractions to visit, experiences to enjoy, etc.)
•
A signage system needs to be developed and implemented along the network of bike routes and trails, in order to ease the movement of cyclists around the island.
Please visit www.Backroads.com to check one of the world’s benchmarks in Cycling Tourism.
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Figure 158. Example of cycling routes signage: Istria, Croatia
Source: Istria Bike (www.istria-bike.com)
Although some trails can be used by normal tourists who like this sport or want to take it up, the product will be developed considering the cyclotourism sector, be it done by individuals or groups. Action 4. Design and manage the experiential system of the routes Offering a network of highly attractive routes and trails is not enough to make a breakthrough on the market. Routes and trails should be transformed into experiences – each route or trail has to provide a unique local experience to the cycling tourists. Once the portfolio of bike trails and routes is selected and developed, Cyprus Tourism Organisation must develop a system of experiences along the routes, such as, for example: •
Grand Tour of Cyprus for bikers
•
Coastal bike routes
•
From the mountains to the sea
•
“King of wines” routes
•
Etc.
The bike tours in Croatia include the experiential approach as shown in the image below.
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Figure 159. Example of cycling routes experiental system: Istria, Croatia
Source: Istria Bike (www.istria-bike.com)
Priority 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction To achieve this, Cyprus needs to do the following: •
Establish Cyprus Cycling Tourism Association
•
Develop a dedicated Cyprus Cycling Tourism website
Action 5. Establish Cyprus Cycling Tourism Association In order to give cycling tourism development a “push-start” and provide leadership, the Cyprus Cycling Tourism Association will be established. The Association should be formed by public and private sector organisations. Representatives from municipalities and the tourism authorities, road transport authorities, traffic police, and other public organisations that own or manage land crossed by the bike routes should be invited to join. To represent the private sector, specialised inbound operators, activity operators, specialised guides, interested hotels, etc., should join the Association. The main goal of the Association will be to lead the Updated version 23.03.2017
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successful implementation of the actions presented in this plan, provide continuous monitoring, and fostering improvement of the product along time. Successful examples of such initiatives are found in destinations where cycling tourism is already developed, such as Western Canada or New Zealand. Table 119. Examples of cycling associations and their missions “The MBTA is a unique non-profit organization committed to establishing mountain biking as a safe and sustainable tourism experience in Western Canada…We work collaboratively with a network of businesses, bike clubs, communities, resorts, and government agencies to achieve our goal to have Western Canada recognised for its world class sustainable trails and abundant mountain biking experiences that are supported by enthusiastic communities and resort operators offering high quality services.” “CAN is New Zealand's national network of cycling advocates. We work with government, local authorities, businesses, and the community on behalf of cyclists, for a better cycling environment. CAN aims to: 1. Promote the benefits of cycling 2. Improve safety for cyclists 3. Encourage the creation of a good cycling environment 4. Promote cycle tourism 5. Advocate for integrated cycle planning 6. Increase the number of cyclists on our roads.” Source: www.mbta.ca; can.org.nz;
Action 6. Develop a dedicated Cyprus Cycling Tourism website The main purpose of the website is to provide content that will inspire their trip (e.g. multimedia database, experiential system, etc.), to offer detailed and updated information to potential cycling tourists, and help them plan their trip (a network of “Your Cycling partners”). Furthermore, in line with nowadays trends within the sector where cyclists prefer to travel with the GPS device, GPS maps and coordinates for every cycling route need to be available on the website. This significantly improves the overall experience as it decreases the uncertainty and makes sure that cyclists are on the right track. Once again, a good example of such a website is Istria in Croatia.
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Figure 160. Istra Bike website
Source: Istria Bike (www.istria-bike.com)
Priority 4. The right resources and partners are used for each segment To achieve this, Cyprus needs to do the following: •
Establish a network of cycling tourism partners
•
Promote the development of 5 cycling DMCs
•
Conduct specialised educational programs for different stakeholder groups
Action 7. Establish a network of cycling tourism partners In order to promote an overall cycling friendly environment, the national “Your CYcling partner” label will be created as part of the design of the national tourism brand. Additionally, for a business to receive the label, certain criteria and standards should be met. •
“Your CYcling accommodation partner” label will be awarded to accommodation suppliers that provide facilities and services that meet the needs of cycling tourists. Such facilities include bike-friendly rooms, bike storage facilities, bike maintenance facilities, while services include cycling breakfasts (a big breakfast with plenty of calories – pasta, oatmeal, pancakes, bacon, and eggs), cycling info points or luggage transport services.
•
“Your CYcling organisation partner” label will be awarded to local travel agencies and tour operators that comply with specific requirements such as offering cycling itineraries, having cycling guides, including cycling in their websites, organise special promotions, etc.
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•
“Your CYcling support partner” label will be awarded to other business partners, such as restaurants, bike rentals, bike maintenance shops and specialised shops that comply with specific requirements of cycling tourism.
•
For example, in Istra (Croatia) the following labels have been developed and implemented:
•
Bike & Bed: the label is awarded to small private properties such as apartments and holiday homes offering basic services for cycling tourists.
•
Boutique Bike Hotels: the label is awarded to small family hotels offering services for cycling tourists.
•
Bike Hotels: the label is awarded to hotels with great accommodation capacities and variety of services for cycling tourists.
•
Bike Camps: the label is awarded to camping sites that offer basic services for cycling tourists. Figure 161. Examples of cycling tourism labels
Source: www.istria-bike.com www.bettundbike.de www.bedandbike.lu/
Action 8. Promote the development of 5 cycling DMCs Educate operators and potential entrepreneurs on the role of DMCs in the cycling tourism value chain. Develop a guide on how to set up a DMC specialised in cycling, and how the DMC should deliver the best service along the 4 stages of the consumer: •
The preparation stage: includes all activities, processes and agents that take part in the search for information, reservation, and purchase of the trip by the client (information bureaus, internet travel portals, travel agencies, generalists, or specialised tour operators, call centres, promotional material, clubs, and associations, etc.). DMCs should offer information about their services, what is different from competitors and the associated benefits for the customer.
•
The arriving stage: The value perceived by travellers once they start their trip will be affected by the means of transport and related services used to reach the destination. At this stage, DMCs should ensure efficient transfer services, offer welcome packages, ease the check-in process, etc.
•
The staying stage: The clients use a variety of services in the destination, such as hotels, restaurants, tourist information services, security, telecommunications, local transport, etc. At this stage, DMCs should offer excellent coordination among the players involved, control the overall quality of the trip, offer support, and help when needed, etc.
•
The experiencing stage: This stage represents the core of the value offered to the tourist and is related to the quality, variety, and uniqueness of the experiences that they can live and enjoy. For this stage, DMCs should design a system of experiences conceived to leave lasting memories (unique itineraries, outstanding guides, nicely presented picnics in selected viewpoints, related leisure activities, small souvenirs/local products tourists can take with them, etc.).
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The NTA should help to identify main international partners for the local DMCs such as special interest operators, specialised travel agencies, bloggers, influencers, and other potential marketing partners in the source markets. Action 9. Conduct specialised educational programs for different stakeholder groups In order to promote cycling tourism and raise awareness, such as the impact on decreasing the seasonality, specialised training programs have to be organised for different stakeholder groups involved: •
Hoteliers need to be educated with regards to products and services to be offered in order to attract cycling tourists.
•
Restaurateurs need to be educated with regards to products (food & beverage) to be offered in order to attract cyclist to the area.
•
Tour guides are the professionals in most direct and frequent contact with cycling tourists. Hence, education of guides is key. They should have a deep knowledge of Cyprus, the biking routes, local traditions, heritage, etc., and should be educated on first aid, bike mechanics and maintenance, changing tires, etc.
Priority 5. Successful marketing / communication is established To achieve this, Cyprus needs to do the following: •
Offer a multimedia database of routes and their main attractions
•
Implement a communication plan for the “Cycling in Cyprus”
•
Promote international and national cycling events
Action 10. Offer a multimedia database of routes and their main attractions In order to fast-forward the Figure 162. Example of photo database: Istria, Croatia commercial success of cycling tourism in Cyprus a gallery of high quality photos and videos needs to be developed and made available to key stakeholders, as well as for potential cycling tourists that want to visualise their cycling vacation in Cyprus. In order to further increase the appeal of Cyprus, a 360° virtual tour should be available from attractive Possibility to select different trailes and routes locations (e.g. a view from the top of the mountain Source: Istria Bike (www.istria-bike.com) trail). Action 11. Implement a communication plan for the “CYcling in Cyprus” A specific communication plan, embedded in the national plan, has to be developed to promote cycling holidays in Cyprus. Priority will be given to the source markets presenting more opportunities. Special messages and content (copy, photos, and short videos) have to be developed and included in all official online channels (tourism portal, and official social media, national and Updated version 23.03.2017
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regional). Dedicated photo contests and the likes can be used to engage tourists and promote customer generated content. Moreover, the Internet offers opportunities to reach bike enthusiasts at low cost (google ads using keywords, specialised portals, social media groups, blogs, etc.). Local operators (hotels, DMCs and other), should be encouraged to include specific contents about cycling tours in their websites, and specific training and technical assistance should be provided. Press releases will be prepared to announce the launching of the network of cycling routes, followed by systematic press releases announcing new operators, upcoming activities along the routes, cycling events, etc. A presentation and a short promotional video targeting the international travel trade will be prepared to be used in trade shows and workshops. In any case, it is important to build synergies with other promotional activities, and all platforms and promotional opportunities available should be used to promote cycling in Cyprus on an ongoing basis. Action 12. Promote international and national cycling events 10 cycling events, 5 targeting international cyclists and 5 targeting national cyclists, have to be organised throughout the year, each of them targeting a different segment. International events will target professional cyclists and cycling enthusiast, and will help to position Cyprus on the map of the European cycling sector. National events will target leisure and infrequent cyclists, mostly Cypriots, although visitors could be invited to participate (the event can be an add-on for tourists visiting Cyprus for other motivations). These events will also serve as a tool to promote a healthy lifestyle and sustainable development through cycling. Events will provide an opportunity for cyclists from all over the world to network, share experiences and latest trends in the industry, all while enjoying the beautiful natural surroundings of Cyprus.
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Action Plan for the Implementation Road Map Table 120. Overview of Cycling tourism actions by priority, type, planning and budgets Action
Priority
Action 1. Target the right segment for cycling Low tourism Action 2. Target the right source market for Low cycling tourism Action 3. Develop and manage a network of High diverse, thematic, and attractive cycling routes Action 4. Design and manage the experiential High system of the routes Action 5. Establish Cyprus Cycling Tourism Medium Association Action 6. Develop a dedicated Cyprus Cycling High Tourism Website Action 7. Establish a network of cycling tourism Medium partners Action 8. Promote the development of 5 Medium cycling DMCs Action 9. Conduct specialised educational Low programs for different stakeholder groups Action 10. Offer a multimedia database of Medium routes and their main attractions Action 11. Implement a communication plan for High “CYcling in Cyprus” Action 12. Promote international and national Medium cycling events
Type
Budget1 (.000 €)
Timetable
<2 yrs 2-5 yrs >5 yrs
Marketing
1.1932
4
Marketing
1.1932
4
726
4
4
4
Marketing
1.162
4
4
4
Regulatory
291
4
Marketing
2982
4
Support
436
4
4
4
Incentives
6303
4
Education
2014
4
Marketing
291
4
Marketing
1.1932
4
4
4
Marketing
2.0872
4
4
4
Infrastructure
1) Budget does not include the infrastructure cost which is included in the general infrastructure budget. 2) Budget for this action is included in Init. 11 3) Budget for this action is included in Init. 8 4) Budget for this action is included in Init. 18
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472
Infrastructure/equipment required Developing and managing a network of diverse, thematic, and attractive cycling routes is part of the plan to activate sites and tourist attractions. Cycling routes will connect major tourism sites and attractions as well as natural environments. A dedicated signposting for the itineraries will be needed in order to create a coherent visual image for the destination. A preliminary development for the new cycling tourism demands will include 10 trails to be arranged with length varying from 5 to 60 Km. Cycling trails can be either road or mountain trails of 2 to 3 metres wide, enough to allow comfortable cycling allowing for shared rides and overtaking. Cycling trails can also be used as trekking trails in the mountains area, therefore it should be clearly marked a shared usage of the paths. Main cycle routes will generally justify a higher level of service than other cycle routes and so may have lower thresholds at which segregation is provided and greater widths. Where substantial increases in cycling are expected, consideration should also be given to the adaptability of infrastructure to accommodate large increases in use.
c.
Actions to provide infrastructure/equipment required The development of the required Cycling infrastructure/equipment will require to:
d.
•
Assess cycling network to review current state of trails;
•
Identify sites and attractions suitable for creating cycling trails;
•
Estimate potential cycling flows and mixed uses for pedestrians or trekkers;
•
Establish partnerships with hospitality developers to contribute to develop cycling trails;
•
Elaborate cycling trails network of itineraries integrating sites and attractions and draft constructive project for the trails.
Estimated budget for infrastructure/equipment Budget for the implementation is not included within the experiential system as a specific experience. Cycling will indirectly benefit from the new the system of experiences. For instance, the Grand Tour of Cyprus may be partially done by bike, the activation or improvement of tourism sites and attractions may include the creation of cycling trails from/to/around the site as an add-on, etc. Furthermore, cycling tourism can be developed in partnership with hospitality accommodation facilities and resort developers offering a “bike-friendly” product, will be encouraged to contribute to infrastructure development; in this case, the may create/finance trails starting from their premises to visit sites and attractions nearby. Therefore, it is difficult to individualise these costs. Table 121. Infrastructure investment requirements for Cycling product development Description •
10 trails proposed of an average 30 Km length 50.000 €/km (includes signalling, excludes bridges and crossings)
Total .
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Budget (million €) (1) 15 15
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Stakeholders involved Table 122. Stakeholders involved Responsible
National Tourism Authority
Accountable
x
National Tourism Planning unit
x
InvestCyprus
x
Private sector
x
Local communities
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Consulted
x
Informed
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5. Sport Tourism 5.1
Sport tourism market potential
5.2
Actions to be taken for successful product development
5.3
Action Plan implementation
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Sport tourism market potential Sports tourism refers to trips mainly motivated by the practice of sports. Customers include amateur athletes, as well as professional athletes, who travel to participate in pre and post season training camps. Sports Tourism also includes trips to participate in sports events as a hobby/leisure activity (marathons, cross country races, triathlons, etc.) or as a spectator.
a. Sport tourism market size in Europe Based on THR analysis, the total size of sports tourism in Europe is 6,6 million trips, which represents 2% of the total outbound travel demand from Europe. Figure 163. Sport tourism outbound trips from Europe by source market
Source market Other 37%
Germany 19% UK 16%
Netherlands 5%
Russia 13%
France 10%
Size of the sport stages segment (# of arrivals)
Germany
1.262.351
UK
1.071.774
Russia
828.058
France
680.440
Netherlands
342.623
Source: Estimates based on Eurostat, European Commission, and Cyprus Brand Adoption Survey
However, it represents an attractive market for Cyprus, not so much for its volume, but more because it generates overnight stays outside the high season and serves one of the main objectives of the strategy, which is to reduce seasonality.
b. Current sport tourism demand for Cyprus To set the arrivals and revenue targets for the Sports tourism segment, the current contribution of the segment to the tourism industry in Cyprus has been calculated first, based on the following inputs and assumptions: •
There was a total of 2.659.405 international arrivals to Cyprus in 2015 56;
•
Leisure (holiday) arrivals have an 84% share in total arrivals to Cyprus 57;
•
There was a total of 17.248 international sports tourism arrivals in 2013 58;
•
It is assumed that between 2013 and 2015 international sport tourism arrivals grew by 21% p.a., following the growth trend in the period 2010-201359;
•
Total tourism revenues in Cyprus in 2015 were equal to 2.112,1 million €60;
CyStat - Cyprus Statistical Service CyStat - Cyprus Statistical Service 58 Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 59 Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 60 Statistics on tourism, Republic of Cyprus Statistical Service 56 57
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•
Visitors arriving to Cyprus to practice sports spent 131 €/day 61 in 2013;
•
According to Tourism Economics, consumer prices in Cyprus decreased by 1,8% in the period 2013-2015. It is assumed that the expenditure per day of sports tourists followed, resulting in the average expenditure per day of 128,6 €;
•
It is assumed that the average length of stay of cycling tourists in Cyprus is 11,2 days 62. Table 123. Sport tourism arrivals and revenues in Cyprus in 2015 Sport tourism demand in Cyprus (in 2015)
Share in total tourist arrivals/revenues in Cyprus
25.253 36.372
1% 2%
Arrivals Revenues (in 000 €)
c. Cyprus arrivals and revenue targets in the sport tourism segment until 2030 Consequently, the following assumptions have been made: •
Over the period of 5 years (until 2020), Cyprus will continue developing the sports tourism offer, which will lead to an average 15% increase of arrivals p.a.
•
In the period 2021-2025, the number of sports tourism arrivals to Cyprus will experience a slowdown. However, growth will continue strong at 10% p.a.;
•
In the period 2026-2030, Cycling tourism arrivals will grow at 5% p.a., in line with the Premium demand growth model of 4,5% p.a.;
•
Consumer prices in Cyprus will further increase by 6% until 2020 and 17% by 2025 63;
•
In the period 2025-2030, consumer prices in Cyprus will increase by a further 10%;
•
Due to the overall product enhancement and development of new experiences, tourist expenditure per stay/arrival will increase by 3% every 5 years (on top of the increase of consumer prices).
Based on these assumptions, the following arrivals and revenue targets have been set: Table 124. Sport tourism arrival & revenue targets Arrivals Revenues (in .000 €)
2020
2025
2030
53.000 83.345
85.000 152.474
110.000 217.210
Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 Sports Tourism Report for the year 2013, Cyprus Tourism Organization, 2013 63 Tourism Economics 61 62
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5.2
Actions to be taken for successful product development
5.2.1
Development driven by a solid business model
477
Sport tourism has been already identified as a high potential product that can generate significant benefits for the destination, even more during the low season. In line with that, Cyprus Tourism Organization has made significant efforts in trying to develop and promote the product, such as: •
Offering funding schemes to improve the quality of football fields and facilities;
•
Offering incentive schemes to promote and develop diving;
•
Promoting and encouraging alternative solar energies and geothermic energy to decrease pool maintenance costs and thus prolonging the operating periods;
•
Supporting in the promotion of marathon, triathlon and running events in collaboration with Sports Federations and Sports Clubs;
•
Supporting the promotion of shooting events in collaboration with Cyprus Shooting Federation.
Sport tourism business model relies on Cyprus’ great all-year round climate combined with sport friendly environment that will attract sport teams, bot amateur and professional ones, from main European source markets. Figure 164. Sport Tourism product business models
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478
The Action Plan: 5 priorities The actions for successful product development are summarised in the following figure, positioned on the business model canvas according to the component they will impact the most. Figure 165. Overview of Sports Tourism product development actions
For Cyprus to deliver a world-class Sport tourism experience, it needs to make sure that: 1. The right segments have been targeted 2. Cyprus offers these targets an attractive customer value proposition (CVP) 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction 4. The right resources and partners are used for each segment 5. Successful marketing / communication is established
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Priority 1. The right segments have been targeted To achieve this, Cyprus needs to do the following: â&#x20AC;˘
Target the right segments for sports tourism
â&#x20AC;˘
Target the right source markets for sports tourism
Action 1. Target the right segments for sports tourism In order to maximise the return on marketing investment (ROMI) necessary for the successful positioning of Cyprus in the sports tourism market, a market strategy which will identify segments to be targeted has to be developed and well-communicated to key stakeholders. Based on the analysis of available data, football is the top priority segment to be developed, followed by diving, swimming and marathon running. Figure 166. Preliminary prioritization of sports tourism segments for Cyprus
Source: Sports Tourism Report for the Year 2013, Cyprus Tourism Organisation
The segment prioritization has to be developed further than the preliminary version presented here, based on in-depth market research and facts. Action 2. Target the right source markets for sports tourism Key source markets for sports tourism have to be identified for every sport. In general terms, United Kingdom, Russia, and Germany represent the primary source markets to be targeted. However, there is a bundle of 2nd level priority source markets to be tackled in order to increase the positioning and visibility of Cyprus as a sports destination.
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Figure 167. Preliminary source markets prioritization for sports tourism in Cyprus
Source: Sports Tourism Report for the Year 2013 and 2010, Cyprus Tourism Organisation Legend: AT-Austria, BE-Belgium, BU-Bulgaria, CZ-Czech Republic, DE-Germany, FR-France, FI-Finland, GR-Greece, IS-Israel, NL-Netherlands, NO-Norway, RU-Russia, SE-Sweden, SW-Switzerland, UK-United Kingdom
Priority 2. Cyprus offers these targets an attractive customer value proposition (CVP) To achieve this, Cyprus needs to do the following: •
Provide a “sport friendly” environment
•
Develop 3 world-class sport complexes
Action 3. Provide a “sport friendly” environment In order to create the attractive customer value proposition to attract different sport segments, service providers have to adapt their offer in order to meet the needs of individuals and sporting groups, such as: •
Sport-friendly accommodation facilities (e.g. larger beds, space for sporting equipment)
•
Food & Beverage (e.g. high-protein meals, protein shakes)
•
Massage & wellness (e.g. sport massages, saunas, rehabilitation treatments)
•
Etc.
Incentives should be given to service providers that decide to pursue the opportunities and adapt their offer to the needs of athletes.
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Furthermore, additional services throughout the travel journey in the destination should be provided (e.g. organised travel providers in the destination, airport, etc. – buses for sports teams). Action 4. Develop 3 world-class sport complexes In order to position Cyprus on the map of sports tourism, it is necessary to develop 3 sport complexes dedicated to different sports, and strategically located in different destinations. They should be part of a hospitality development that includes, as an example, athletics tracks, football/outdoor sports fields, swimming pools, gymnasiums, fitness facilities, etc. First step towards developing a sport complex integrated to a hospitality project is the identification of the locations, followed by the preparation of a master plan for each facility and its surroundings. Figure 168. Illustrative examples of sport complexes master plans
Source: www.visualdictionaryonline.com
These sport centres should be located less than an hour from an airport and in places that have also a diversity of sports-friendly accommodation and a reasonable commercial offer. Figure 169. Illustrative examples of hospitality plus sports complexes
Source: Montanyà Hotel & Lodge – Barcelona (left), Soccer Stages – Valencia (right)
Priority 3. Activities that are critical to deliver an attractive CVP have been performed well, resulting in high levels of tourist satisfaction To achieve this, Cyprus needs to do the following:
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•
Create a Sports Tourism Alliance
•
Manage sport facilities through a PPP company
•
Develop a dedicated sports tourism website
482
Action 5. Create a Sports Tourism Alliance In order to foster coordination and provide leadership, a Sports Tourism Alliance will be set up with selected public and private sector representatives. Among public sector: tourism authorities, sports authorities, municipalities, and other organizations that own land, etc. Among the private sector: sports associations and federations in Cyprus, specialised DMCs, hotel associations, trainers, gyms, etc. The main purpose of the Alliance will be to lead the successful implementation of the actions presented in this plan, and to provide continuous monitoring and improvement of the product. Figure 170. Examples of sport tourism alliances
Source:
http://canadiansporttourism.com/ http://sporttourism.or.jp/
Action 6. Manage sport facilities through a PPP company To make sure that sport facilities are Figure 171. Illustrative proposal of the managed to the standards of organisational structure of the company international best practices, it is recommended to form a public-private partnership (PPP) among the key stakeholders. The PPP should be formed as a sports facilities management company that will oversee developing new facilities (investment and project management), and managing existing facilities (operations). During the first few years of operations, an advisory board of experienced professional should be in place. Action 7. Develop a dedicated sports tourism website A special website, or microsite, targeting sports tourism will be developed targeting the sports tourism segments. The website will be linked to the national tourism portal although, considering that the Internet is a segmented platform allowing for very specific searches, it is recommended to register a special URL including the keywords sports and Cyprus. For example: Cyprusisforsports.com.
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The website should include information on sport facilities, outdoor sporting locations (e.g. cross country running routes), sport events, accommodation partners, restaurant partners, etc. Although it is not intended to primarily target sport tourism clients, the website SportMalta can be used as an example. Figure 172. Example of national sport-dedicated website: SportMalta
Source: SportMalta (www.sportmalta.org.mt)
Priority 4. The right resources and partners are used for each segment To achieve this, Cyprus needs to do the following: •
Conduct facility inventory and assessment
•
Establish a network of sports tourism business partners
Action 8. Conduct facility inventory and assessment Having good sports facilities is critical to further develop sports tourism in Cyprus and it is always tempting to promote sports tourism as a way to advocate for new sports facilities. While this may be a long-term strategy, it will be necessary to start with existing facilities first. Start by preparing an inventory of existing facilities including a full description of each one. Some relevant data are: •
Ownership and contact information
•
Sports that can be hosted and at what levels (provincial, national, international)
•
Spectator capacity
•
Occupancy profile
•
Strengths and weaknesses
Ensure that the inventory includes non-traditional sports and non-traditional venues such as outdoor recreational venues.
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To this end, it will be necessary to contact the facility owners/managers to collect data and identify planned expansions or upgrades. Action 9. Establish a network of sports tourism business partners Sports tourism is a niche that needs a reliable network of professional partners, as athletes (both amateur and professional) have special requirements regarding types of accommodation, food & beverage, equipment availability, etc. For example, when travelling, the Croatian National Basketball Team requires to stay in hotels with longer beds (>200 cm), sauna and fitness facilities, located at a 10-minute walk from the sports centre64. Due to these, and similar requirements, it is necessary to develop a reliable network of partners: accommodation providers, restaurants, wellness & spa facilities, sport equipment retailers, destination management companies, etc. For each type of partners, clear standards have to be developed, based on which a product label will be awarded, following a careful evaluation (this label is to be included in the main architecture of brands/labels and could be developed together with other quality and product labels).
Priority 5. Successful marketing / communication is established To achieve this, Cyprus needs to do the following: â&#x20AC;˘
Develop a list of +300 potential clients in Europe and the region
â&#x20AC;˘
Promote international sporting events
Action 10. Develop a list of +300 potential clients in Europe and the region Potential customers for sports tourism can be reached through very specific channels such as sports clubs and associations, specialised printed media, specialised trade shows, sporting events in the source markets, specialised tour operators, and related online channels, among others. Considering that targeted communication is a must, a list of +300 potential clients in the priority source markets should be compiled. Data should be loaded in a database that will become a valuable resource to plan and organise specific communication and promotion activities to be included in annual operational marketing plans (activities may include press trips, mailings to clubs, sending invitations to register for sports events, press releases, specialised workshops, etc.). A list of rotating sports events in Europe should also be an excellent resource to plan the presentation of bids.
64
THR based on personal experience
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Action 11. Promote international sporting events Organizing sporting Figure 173. Types of sporting events: impact on the destination events is a great way of and budget requirements raising awareness of Cyprus as a sport tourism destination, especially if they have international significance. Several successful examples are already taking place in Cyprus (e.g. Cyprus International 4-day Challenge, Logicom Cyprus Marathon, etc.), however they need to be further developed and promoted. In the short/midterm, Cyprus does not have the infrastructure needed to attract major international events65. Hence efforts should be focused on attracting 3 small international events per year (e.g. UEFA European U-19/U-21 Championship, European Universities Games, etc.). When evaluating different events, it is advisable to use the approach shown in the above figure, where the evaluation of destination impact and budget requirements are combined in order to maximise the return on investment.
65
Examples of major international events: Olympic Games, FIFA World Cup, FIBA World Cup, etc.)
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486
Action Plan for the Implementation Road Map Table 125. Overview of Sport stages actions by priority, type, planning and budgets Action Action 1. Target the right segments for sports tourism Action 2. Target the right source markets for sports tourism Action 3. Provide a “sport friendly” environment Action 4. Develop and operate 3 world-class sport complexes Action 5. Create a Sport Tourism Alliance Action 6. Manage sport facilities through a PPP company Action 7. Develop a dedicated sport tourism website Action 8. Conduct facility inventory and assessment Action 9. Establish a network of sport tourism business partners Action 10. Develop a list of +300 potential clients in Europe and the region Action 11. Promote international sporting events
Priority
Type
Budget (.000 €)
Timetable
<2 yrs 2-5 yrs >5 yrs
Low
Marketing
1.3051
4
Low
Marketing
1.3051
4
Low
Marketing
300
4
High
Infrastructure 7632
4
Medium
Regulatory
381
4
High
Regulatory
636
4
High
Marketing
3131
4
High
Regulatory/ 508 Infrastructure
4
Medium
Support
254
4
Medium
Marketing
2091
4
Medium
Marketing
20871
4
4
4
4
4
4
4
1) Budget for the first 4 years of this action is included in Init. 11 2) It does not cover any infrastructure development cost, that is part of the investment in infrastructure included in the general budget.
b.
Infrastructure/equipment required To develop and operate 3 sport complexes, Cyprus will require private investors aiming to establish a PPP agreement for the development/operation of new facilities as a complement to a hospitality project. The Government and NTA should not be the ultimate responsible for the operation of the sports centres but be a key part on the development/promotion of the facilities. The sports centres for sport tourism are not conceived as standalone facilities, they should be integrated in a hospitality development project with an extended range of services oriented to provide a unique environment for athletes and teams. In addition to the components of a hospitality development project, an indicative program of the facilities that a sport centre requires include:
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Outdoor •
1 or more outdoor multifunctional pitches with natural grass and/or Astroturf;
•
An athletics track official 400 metres track with 6 lines, full equipped for all the track and field events. pole vault zones, high jump zones and long jump and jump zones;
•
6 Outdoor tennis clay courts (for single players and for doubles players).
Indoor
c.
•
A wooden sport hall with 5 halls, which allows basketball, handball, volleyball, etc. training;
•
A fitness pool 50 metres long, with 8 lanes and changing rooms on the pool side;
•
A state of art gym with the latest selection of 150 stations of Technogym equipment including cardio vascular machines, weight resistance machines and a wide range of free weights and the best functional fitness equipment. The gym should also have a spacious matting area for stretching and functional fitness exercise;
•
3 State of art studios, fully equipped with mirrors and sound system to make the whole experience very enjoyable;
•
3 Indoor tennis hard courts (for single players and for doubles players).
Actions to provide infrastructure/equipment required In order to establish a competitive PPP project in which a hospitality developer works jointly with the Government to develop an attractive sports centre that contributes to develop sports tourism, the following actions are required:
d.
•
Perform a feasibility study;
•
Draft development specifications;
•
Tender process including pre-qualification of candidates, invitation to tender, submission of proposals, and final contract agreement;
•
Preparation of construction works and licensing process;
Estimated budget for infrastructure/equipment The development of 3 world-class sports complexes will be an integral part of the 3 new hospitality development projects. Budget is not specifically allocated into a section, it has been included in resort infrastructures concept as a whole. Table 126. Infrastructure investment requirements for Sports product development Description
Budget (million €) (1)
• 3 sports complexes at 20 M €/ complex 8 lane pool & learner pool, 5-court hall, 150 station health & fitness gym, 3 studios: 15 M €. 2 outdoor senior football fields (106 x 70) - includes fences, and lighting: 2,0 M € 6 outdoor tennis courts – includes fences and lighting:1,5 M€ 6 outdoor athletics tracks, 110 straight both sides, grass infield, artificial throws, jumps, end fans: 1,5 M€
Total
60
60
Note 1: Specified costs are inclusive of 6% cost for feasibility studies, technical services, and project management to be funded by the Government.
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e.
Stakeholders involved Table 127 Stakeholders involved Responsible
National Tourism Authority
Accountable
x
x
National Tourism Planning unit
x
InvestCyprus
x
Private sector
x
Local communities
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Consulted
x
Informed
488
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6. Meetings & Events 6.1
Meetings & Events market potential
6.2
Actions to be taken for successful product development
6.3
Action Plan implementation
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490
Meetings & Events market potential According to the International Association of Professional Congress Organisers (IAPCO), MICE refers to Meetings, Incentives, Conferences, and Exhibitions. MICE trips are trips motivated by business/work, often bringing large groups together for a particular purpose. The terms ‘Meetings industry’ or ‘Events industry’ are also used to refer to the supply side. MICE are considered to be a sub-segment of business travel relevant to destinations because it can be influenced by marketing, which is not the case for individual business trips. MICE trips can also involve a leisure component.
a. Meetings &Events market size in Europe Based on THR estimates derived from the Cyprus brand adoption survey, total business travel market in Europe is ≈41 million trips. According to the ITB World Travel Trends Report 2015/2016, the meeting & events (MICE) sector grew by 37% between 2007 and 2014, reaching 54% market share in the business travel market. Hence, THR estimates that the total size of the meeting tourism industry in Europe is ≈22 million trips per year. Meetings are the most demanded item by European MICE buyers according to IBTM, followed by incentives and corporate conferences. Figure 174. Types of events organised by European MICE buyers in 2013 78% 60%
57% 41%
35%
29%
28%
Source: IBTM Meeting Industry Report 201 Europe focus
In Europe, Germany as a country and Berlin as a city, have been the leading destinations in terms of attracting association meetings.
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Table 128. 2015 ICCA Europe Country & City rankings Top 10 countries Country
Top 10 cities
# of meetings
Germany United Kingdom Spain France Italy Netherlands Portugal Austria Belgium/Sweden Turkey
667 582 572 522 504 333 278 258 216 211
City
# of meetings
Berlin Paris Barcelona Vienna London/Madrid Istanbul Lisbon Copenhagen Prague Amsterdam
195 186 180 178 171 148 145 138 123 120
Source: Adapted from 2015 ICCA Statistics Report, Public Abstract
b. Current Meetings & Events demand in Cyprus In 2014 the number of arrivals motivated by meetings in Cyprus was 28.438, a 15% decrease over 2013. This came as a result of a 28% decrease in conference participants (72% of total participants in 2014), while participants arriving for incentives experienced a 30% year-onyear increase (23% of total participants in 2014). Participants in congresses represent the smallest share, with 1.468 arrivals in 2014 (5%)66. Revenue from participants in meeting and events has been calculated based on the following assumptions: •
Average expenditure per participant/arrival was 723 € in Malta in 2012 (including accommodation, transfers, meals, and organised entertainment). It is assumed that the expenditure was similar in Cyprus, and have since then increased by 2% (in accordance to the consumer price index).
•
It is assumed that delegates stay on average 4,2 days 67. Table 129. Meetings & Events arrivals and revenues in Cyprus in 2014
Arrivals Revenues (in million €)
Meetings & Events demand in Cyprus (in 2014)
Share in total tourist arrivals/revenues in Cyprus
28.438 20,6
1% 1%
c. Cyprus arrivals and revenue targets in the Meetings & Events segment until 2030 These figures have been used as a base for establishing arrivals and revenue targets by 2030. The following assumptions have also been taken into account:
Cyprus Tourism Organization, Market Research Report: “Collection of Statistical Data for Conference and Incentive Events 2014”, October 2015 67 THR based on Cyprus Tourism Organization, Market Research Report: “Collection of Statistical Data for Conference and Incentive Events 2014”, October 2015 66
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•
In the period 2015-2020, the number of participants in conferences will grow by 2% p.a. Considering the convention centre being built in Limassol (assuming that it will start operations by 2020), it is assumed that they will grow at 5% p.a. in the period 2021-2030.
•
In the period 2015-2020, the number of participants in incentives will continue growing at the strong rate of 15% p.a. In the period 2021-2025, the number of incentive participants will grow at 10% p.a. In the period 2026-2030, the number of incentive participants will grow at a rate of 5% p.a. (a further slowdown due to Cyprus being considered a mature destination, yet still an attractive one).
•
In the period 2015-2020, the number of conference participants will grow by 1% p.a. (due to the lack of facilities). Considering the convention centre being built in Limassol (assumption is that it will start with operations by 2020), in the period 2021-2030 it is assumed that they will grow at 5% p.a.
•
In comparison to 2014, consumer prices in Cyprus will increase by 6% until 2020 and 17% by 2025 according to Tourism Economics
•
It is assumed that by 2030 consumer prices will increase by further 10%, reaching a total of 27% increase in comparison to 2014.
Based on these assumptions, the following arrival targets have been established. Table 130. Meetings & Events arrivals and revenue targets Arrivals Revenues (in million €)
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2020
2025
2030
35.000 30,4
55.000 48,4
75.000 69,7
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493
Actions to be taken for successful product development a. Development driven by a solid business model The high investment required to position Cyprus as a mega/big meetings destination is not profitable due to the marketâ&#x20AC;&#x2122;s limitations and Cyprus competitiveness, therefore a more economically sustainable model is the Boutique size and is the one that should be adopted. As a boutique meeting destination, Cyprus will be competitive to attract corporations and associations with current enhanced meeting facilities and services in hotels, as well as the additional ones to be developed. Figure 175. Meetings & Events product business model
b. Actions for successful product development The actions for successful product development are summarised in the following figure, positioned on the business model canvas according to the component they will impact the most.
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Figure 176. Overview of Meetings & Events product development actions
For Cyprus to deliver a world-class Meetings 6 Events experience, it needs to make sure that: 1. The role of Convention Bureau is reinforced in order to position Cyprus as â&#x20AC;&#x153;the place to meetâ&#x20AC;? 2. An excellent support program for MICE bidding and planning is created 3. Development of the sector has been promoted and awareness of Cyprus as the place to meet raised 4. Capacity building is strengthened and MICE professional network reinforced
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Priority 1. The role of the Convention Bureau is reinforced to position Cyprus as “the place to meet” Switching the focus from a beach/leisure-destination to a meetings-destination is not an easy task. It requires a change in the business mentality, as well as an adjustment in the product and service orientation. This mission rests in the hands of the Convention Bureau, whose current role and activity has to be strengthened, broaden, and enhanced. To achieve this, Cyprus needs to do the following: •
Define the target and positioning of Cyprus as a meeting destination
•
Broaden the role of the existing Convention Bureau
•
Develop a dedicated website for the travel trade
Action 1. Define the target and positioning of Cyprus as a meeting destination The Meetings & Events industry requires a good high-end accommodation capacity with adequate facilities to hold meetings. The size of the meetings targeted is considered the driver of the investment required in terms of accommodation, facilities, air connectivity and tourism attractions. Cyprus could adopt two different positioning: targeting mega and big meetings or focusing on boutique meetings. Each option requires a different approach. Table 131. Assessment of the competitiveness of Cyprus by Meetings & Events business models Big meetings Facilities to develop Investment required
1
Congress hall Large investment: new construction over 20 M Eur. Requires large network of international connections with enough capacity International conventions, Renowned congresses, and events The number of bigger events worldwide is limited and rotate
Air network Customer segments Profitability & Usage
0
0
1
2
Score
Meetings rooms in hotels for up to 500 attendants Low investment: upgrade of existing facilities in hotels
3 3
1
Not required to provide additional capacity
3
1
Corporations & Associations
4
1
The boutique segment is the largest segment
4
1
Cyprus positioning assessment Low score
Medium & boutique meetings
Score
3 3
4
High score
Based on the analysis of existing information and the supply of facilities and services in Cyprus, it is advisable to position the island in the market of medium-sized and boutique meetings and incentive travel, as its current offer is attractive for smaller meetings and the investment requirements are not so high. This strategy is a consequence of Cyprus’ weakness to welcome (by airway) high volumes of participants, the difficulties (often unachievable) to compete against bigger cities for meetings and events, logistics complications to manage great amounts of people due to a lack of conference infrastructure and rooms, etc. Updated version 23.03.2017
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Regarding the venues to hold these meetings, THR suggests: •
Support 4 and 5 star hotels in Cyprus (in Nicosia and along the coast) for these to develop top quality facilities and equipped with first-rate technologies for such meetings/events.
•
Study the convenience of expanding Filoxenia CC to 1,200 seats for plenary sessions (it currently has a capacity of 850 seats approx.)
Germany, the UK, France, Italy, and Spain represent 70% of the European business travel market according to the Global Business Travel Association (GBTA). These countries are also considered to be among the top EU markets for MICE, hence they are priority target markets for Cyprus. In order to attract MICE arrivals from target markets, Cyprus has to maximisie its appeal for both event organisers and delegates and it will be necessary to Identify and communicate the key selling points of meeting in Cyprus, such as: •
Favourable climatic conditions during spring and autumn (the most popular seasons for corporate groups).
•
Convenience of meeting facilities located near leisure attractions and a variety of entertainment options.
•
Unique outdoor cultural venues available. Possibility of using some ancient sites for specific events (a framework agreement with the Ministry of Antiquities will be needed).
•
Diversity of options for pre/post meeting extension trips (also family oriented).
Action 2. Broaden the role of the existing Convention Bureau Review and adapt the current mandate of the Convention Bureau against benchmark destinations such as Barcelona, Thailand, or London. Successful convention bureaus are highly oriented towards marketing the destination, and proactively conduct business development activities through workshops. Industry fairs, B2B relations, etc. Figure 177. Examples of successful Convention Bureau’s and their work Conference Organizer’s Handbook (by San Sebastian Turismo & Convention Bureau)
Source:
5 Fresh reasons to turn your event into a world-class experience in dynamic Singapore
http://www.sansebastiancongress.com/images/cbureau/pdf/manual-para-organizadoresde-congresos.pdf http://www.yoursingapore.com/content/dam/MICE/Global/downloads/STB_Supplement_R easons.pdf
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Action 3. Develop a dedicated website for the travel trade Develop a dedicated website for the international travel trade and meeting planners (100% business oriented). The content will target the business meeting planner and be highly practical and actionable, including conference organizer’s handbooks, contacts of vendors and suppliers, search option to find a venue, general travel information, events calendars, RFP tools, etc. The current website, hosted within Visit Cyprus, does not feature this type of content and when redirected to the previous website, a mix of leisure/business services appears. Moreover, the current promotional video tagged as Convention Bureau, is merely a leisure video with no corporate meeting component/visual reinforcement.
Priority 2. An excellent support program for MICE bidding and planning is created Large international rotating conferences require submitting a dossier and feasibility study to demonstrate that interested destinations can successfully host and handle the event. Those documents are usually prepared by the Convention Bureaus. The professionality and efficiency of the Convention Bureau becomes paramount in the choice of a destination over other candidates. To achieve this, Cyprus needs to do the following: •
Establish a mechanism to identify bid opportunities
•
Provide a leading in-destination program
Action 4. Establish a mechanism to identify bid opportunities Define a method to calculate the potential cost-benefit of bidding for different types and sizes of events (depending on sponsorships, number of nights, number of attendees, relevance of the meeting entity, power of the meeting organizer, etc.). Collaborate with international associations (such as MPI, ICCA, UFI, etc.), leading corporate meeting planners worldwide and other international governmental agencies that could help identifying relevant opportunities for bidding. Engage with international companies with offices in Cyprus, as well as local professionals who are members of international associations, as they can become the entry point for the attraction of regional / international hosting events. Set up and communicate a sound and transparent assistance program to prepare bids. Establish the steps to be followed, the type and degree of assistance provided along the process, the estimated timings, the list of key contact persons, etc. Action 5. Provide a leading in-destination program The Convention Bureau should be responsible to ensure ample coverage of events held in Cyprus in specialized media and in the online channels. Special support measures should be offered to meeting planners. Some examples are: •
Financial support: information about double taxation agreements, offer VAT reduction opportunities, lower the rate for the use of public venues, offer to host and sponsor a welcome/farewell event attended by public authorities, etc.
•
Logistic support: expedite visa issuing processes, waive visa fees, facilitate custom procedures at airport (for printed materials, products to be displayed, stands, etc.), establish a premium line at airport’s immigration, allow to place a welcoming booth at
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the airport, publish a calendar of events to avoid clashes with other conferences in competing sectors, etc. •
Leisure support: facilitate destination brochures and maps, negotiate reduced transportation cards, publish articles and media releases, provide support to organise excursions and activities for travel companions, etc. Figure 178. Good examples of in-destination support MICE Lane: Fast Track Service (by TCEB Thailand Convention & Exhibition Bureau)
Source:
Save Money by Reclaiming Tax (by London & Partners Convention Bureau)
https://www.youtube.com/watch?v=iTpwwe-mFf4 http://www.tica.or.th/Enews_2015/Enews_TICA_2015_Vol_31/04_Content.php http://conventionbureau.london/resources/tax-incentives
Priority 3. Development of the sector has been promoted and awareness of Cyprus as the place to meet raised The promotional effort by the Convention Bureau should be complemented with activities aimed at developing the supply chain and build capacity among the tourism industry to serve and reach the MICE segments. To achieve this, Cyprus needs to do the following: •
Encourage investment in suitable MICE infrastructure, products, and services
•
Proactively communicate with the international meetings industry
Action 6. Encourage investment in suitable MICE infrastructure, products, and services Provide potential investors and meeting suppliers in Cyprus with market intelligence. Expedite the increase/improvement of meeting venues aligned with the strategy of focusing on small meetings, in particular those that enhance the uniqueness of Cyprus as a meeting destination: identify opportunities and locations, offer special funding lines or tax incentives for those investing in improvements targeting the meetings market, organise forums and training sessions to discuss opportunities, needs, and development capacity. Participate in tourism planning and policy development forums in Cyprus to build support for meetings tourism. Communicate the benefits of MICE tourism, such as: •
Higher spending level per arrival (versus the leisure tourist).
•
Seasonality reduction (the peak season for meetings is in shoulder months).
•
Potential to contribute to the regeneration/relaunching of destinations.
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•
499
Improvement of the image and prestige of the host city.
Action 7. Proactively communicate with the international meetings industry Identify key corporate event organizers, influencers / decision-makers, and target business segments in priority source markets. Organise a specially targeted fam trip for media and specialised operators aimed at highlighting the possibilities of Cyprus as a meetings destination. Engage in commercial activities, online and offline, conceived to improve the awareness about what Cyprus has to offer to event organisers. Online channels will be a must, and attending specialised trade shows is also an interesting option (e.g. EIBTM). Figure 179. Good examples of meetings & events sector development and awareness raising Invest Hong Kong – Promoting MICE
Source:
The “Japan Meeting & Incentive” page of Japan National Tourist Organization website
http://www.investhk.gov.hk/zh-hk/files/2012/08/2012.07-MICE-en.pdf http://www.jnto.go.jp/MI/eng/index.html
Priority 4. Capacity building is strengthened and MICE professional network reinforced Building a competitive network of local meeting planners that are well-connected within the industry is also a key success factor to build a meeting destination. To achieve this, Cyprus needs to do the following: •
Enhance the competitiveness of Cyprus’ meeting industry
•
Bring together all the stakeholders with an interest in meetings & events
Action 8. Enhance the competitiveness of Cyprus’ meeting industry Offer the local operators capacity building courses in subjects such as exhibition marketing, meeting etiquette, international bidding, event production and staging, event planning and management, site management, etc. Invite international lecturers and engage industry associations in the promotion and presentation of seminars and training courses. Certifications such as the Certified Meeting Professional (CMP) are recognised globally as a badge of excellence in the meetings industry. This program is run by the Convention Industry Council (CIC) and supported by leading partners such as MPI or ICCA.
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Develop meetings’ market intelligence tools to be shared with the industry. Invest in regular research to inform future objectives and strategies. Support and incentivise local companies, and help them organise their own MICE boosting programs. Establish a framework for cooperation between academia and the meetings industry (an agreement can be reached to conduct surveys and specific research, to follow up competitors, etc.). Action 9. Bring together all the stakeholders with an interest in meetings & events Encourage stakeholders to work together and create synergies for the successful growth of the meetings industry in Cyprus. Examples such as the Korea MICE Association (KMA) and the Thailand Incentive and Convention Association (TICA) are good benchmarks of joint alliances. They organise a number of activities such as: •
Organizing periodic forums for meeting stakeholders.
•
Participating in national and international industry associations at leadership level in order to keep the pace of emerging market trends and threats.
•
Fostering cross collaboration among planners, suppliers, trade shows, associations, etc. to bring all these sectors onto one platform.
•
Increase the ICCA or UIA rankings by actively gathering and submitting data sources. Figure 180. Good examples of capacity building initiatives and joint collaboration in the meetings & events sector Convention Industry Council – Certified Meeting Professional (CMP) program
MICE collaboration – Memorandum of understanding Korea-Thailand
Source: http://www.conventionindustry.org/CMP/AboutCMP.aspx
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6.3 a.
501
Action Plan for the Implementation Road Map Table 132. Overview of Meetings & Events actions by priority, type, planning and budgets Action Action 1. Define the target and positioning of Cyprus as a meeting destination Action 2. Broaden the role of the existing Convention Bureau and develop a dedicated website for the travel trade Action 3. Develop a dedicated website for the travel trade Action 4. Establish a mechanism to identify bid opportunities Action 5. Provide a leading in-destination program Action 6. Encourage investment in suitable MICE infrastructure, products, and services Action 7. Proactively communicate with the international meetings industry Action 8. Enhance the competitiveness of Cyprusâ&#x20AC;&#x2122; meetings industry Action 9. Bring together stakeholders with an interest in meetings & events
Priority
Type
Budget (.000 â&#x201A;Ź)
Timetable
<2 yrs 2-5 yrs >5 yrs
Low
Marketing
545
4
High
Marketing
1341
4
4
4
High
Marketing
1341
4
4
4
High
Regulatory
4282
4
4
4
High
Incentives
436
4
High
Support
300
4
4
4
Medium
Marketing
626
4
4
4
High
Education/ Incentives
872
4
4
Medium
Education/ Incentives
327
4
4
4
1) Budget for the first 4 years of this action is included in Init. 11 2) Budget for this action is included in Init. 16
b.
Infrastructure/equipment required No additional infrastructure/equipment will be required to develop Meetings and Events product. Existing Meetings and Events facilities, tourism service provides and hospitality companies will not require with additional infrastructure to efficiently host boutique events.
c.
Actions to provide infrastructure/equipment required No actions to provide infrastructure/equipment have been outlined.
d.
Estimated budget for infrastructure/equipment No specific budget for infrastructure/equipment has been considered.
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e.
502
Stakeholders involved Table 133. Stakeholders involved Responsible
National Tourism Authority
Accountable
x
x
National Tourism Planning unit
x
InvestCyprus
x
Private sector
x
Local communities
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Consulted
x
Informed
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503
B. Priority Source Markets 1.
2.
3.
Introduction 1.1
Purpose, plan to close the gaps and benefits
1.2
Source markets strategic portfolio
1.3
Targets per source market (arrivals and revenues)
1.4
Main barriers to overcome
Action Plan Content 2.1
The 7 groups of marketing tools
2.2
The new marketing models of Cyprus Tourism Offices abroad
Action Plan Implementation 3.1
Actions plan to achieve the targets
3.2
Marketing Toolbox per source market from Tier 1, 2 and 3
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1.
Introduction
1.1
Purpose, plan to close the gaps and benefits
a.
504
Purpose and main objective This separate action plan aims to develop the measures that must be implemented in each of the priority source markets (according to the source market portfolio established by the Strategy) in order to achieve the defined targets for the number of visits and revenues in each. The proposed Action Plan comprises the source market portfolio that has been established, focusing on those of medium and high priority in accordance to the general strategy of focusing marketing efforts in priority markets, as proposed by the CTS.
b.
Gaps identified in the current situation Cyprus is currently assuming a very dangerous risk. The island must reduce the relative weight of UK and Russian demand, which will mean increasing the market share of other selected source markets. Tour operators and travel agencies in sometimes desperate search of new destinations – especially with the current political crises in various formerly strong destinations – give it a lot of room to grow.
c.
Measures and Targets (KPIs) •
Measure: tourist arrivals and revenues per source market
•
Target (KPI): a number of arrivals and revenue targets to be achieved in the 15 key source markets by 2030 can be seen in the following table. Table 134. Arrival and revenue targets by 2030
Source market UK Russia Nordic Germany Israel Switzerland France Ukraine Lebanon Poland Belgium Netherlands Austria UAE/Qatar Ireland
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Arrivals in 2030 1.190.555 991.406 658.434 226.299 153.267 140.637 179.028 108.250 82.617 92.168 84.230 77.864 53.669 42.652 88.895
CAGR of arrivals 0,7% 4,1% 7,0% 6,3% 3,9% 6,6% 11,7% 6,0% 5,6% 7,2% 7,7% 7,7% 5,4% 5,5% 21,9%
Revenues in 2030 (in 000 EUR) 1.243.916 983.276 511.840 260.900 131.684 177.068 207.212 112.916 81.092 69.267 144.761 97.754 59.237 44.192 84.486
CAGR of revenues 1,9% 5,2% 8,5% 7,8% 5,1% 8,0% 13,2% 7,4% 7,1% 8,7% 9,2% 8,9% 7,0% 7,4% 23,3%
CYPRUS TOURISM STRATEGY
d.
505
Plan to close the gaps This separate action plan identifies opportunities for growth in demand for Cyprus in each source market. To do this, forecasts made by Oxford Economics through its subsidiary Tourism Economics as a basis has been used. It is not a 100% accurate method but their projections are reasonable and, in any case, it is the best tool currently available. These projections have been reviewed by THR specialists based on scenarios approach and their personal experience, their knowledge of the impact of investments on marketing and generating traffic towards the destination and their relevant contacts in the industry and source markets. This plan also identifies the main barriers that stop potential from being fully capitalised upon, which have been taken into account when designing the action plan for each source market. Once the potential has been identified, corresponding targets are established as a two-step process. The first step establishes the potential in terms of the number of tourists, based on Tourism Economics’ projections as well as THR’s own estimates – which are somewhat higher to those of Tourism Economics. An estimation is then done of the targets in terms of revenues, taking into account the projections for the average daily expenditure and length of stay in Cyprus. This plan includes the designed set of measures/actions that make up Cyprus’ Marketing Toolbox. This toolbox is used to specify the tools that should be adopted in each source market, as well as the intensity to which they should be adopted. Once the marketing tool “mix” to be applied to each source market has been established, we make relevant proposals in terms of partners, timeframes, and the budget for each action.
e.
Benefits resulting from a successful plan implementation Cyprus will diversify its markets and the weight of the UK and Russian markets will decline to about 45%, however this will not be the case in terms of the number of arrivals, in order to reduce the risk associated with excessive overdependence on these markets.
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1.2 a.
506
Source markets strategic portfolio Source markets portfolio strategy In the part of the document entitled “Core strategy” we have already presented the source market prioritisation matrix, which aims to identify the source markets Cyprus has to target. This methodology takes into consideration the attractiveness of the source markets and Cyprus competitive strength in each one of them, with a total of 10 different individual criteria being evaluated. Once performed, the results of this assessment are 7 identified source markets labelled as top priority, 8 markets labelled as medium priority, and 12 markets labelled as low/lower priority.
Figure 181. Source market prioritisation matrix
Top priority
Medium priority
Low priority
To analyse Cyprus’ position in the current market, the 25 prioritized source markets have been further divided into 4 tiers, and due to their significance for Cyprus, UK and Russia have been separated from other source markets labelled as “top priority” and grouped into Tier 1. Table 135. Source markets grouping into Tiers Tier 1
Tier 2
Tier 3
Tier 4
United Kingdom Russia
Nordics Germany France Switzerland Israel Ukraine
Belgium Netherlands Poland Ireland Lebanon Austria UAE/Qatar
Italy China India USA Bulgaria Belarus Hungary Lithuania Romania Japan Greece Jordan
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b.
507
Analysis of historic trends Based on the analysis of historic data of arrivals from all of the 25 source markets included in the prioritisation matrix, we can conclude that Cyprus has been losing arrivals from some important source markets such as the UK, Germany, and France. At the same time, arrivals from Russia and Ukraine, as well as Eastern European markets such as Poland, Romania, or Belarus, have seen a strong growth of arrivals since 2005. Table 136. Arrivals to Cyprus by priority source market Tier Tier 1
Source market UK Russia
Total Tier 1 Nordics Germany Israel Tier 2 Switzerland France Ukraine Total Tier 2 Lebanon Poland Belgium Netherlands Tier 3 Austria UAE Ireland Total Tier 3 Greece Romania Belarus USA Italy Lithuania Tier 4 Hungary Bulgaria Jordan China Japan India Total Tier 4 Others Total Cyprus Source: Tourism Economics
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Arrivals in 2005 1.391.850 97.600 1.489.450 195.243 182.689 40.940 40.287 52.783 5.083 517.025 13.762 14.904 22.879 29.493 36.988 6.627 52.711 177.364 130.156 4.980 1.612 22.051 20.202 1.501 11.174 3.408 4.303 424 540 0 200.351 76.659 2.460.849
Arrivals in 2010 996.046 223.861 1.219.907 236.314 139.190 37.876 41.647 28.749 11.766 495.542 20.664 18.439 24.125 34.212 21.559 11.832 10.527 141.358 127.667 19.980 3.507 22.719 12.992 2.546 10.721 8.905 3.575 655 1.194 0 214.461 84.954 2.156.221
Arrivals in 2015 1.066.790 538.826 1.605.616 239.739 89.949 86.143 53.748 34.217 45.476 549.271 36.461 32.300 27.858 25.686 24.323 19.067 4.583 170.278 116.385 21.885 15.741 15.596 15.226 11.906 11.505 9.068 5.651 1.916 534 0 225.411 82.756 2.633.332
CAGR of arrivals 2005-2015 -3% 19% 1% 2% -7% 8% 3% -4% 24% 0,4% 10% 8% 2% -1% -4% 11% -22% -0,3% -1% 16% 26% -3% -3% 23% 0% 10% 3% 16% 0% N/A 1% 1% 1%
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Analysis of source markets arrivals to the Mediterranean shows that, unlike Cyprus, the region has seen a stable growth of arrivals from all major source markets (except the UK where arrivals have just reached pre-crisis levels). It can also be observed that on average Cyprus has seen a slower growth in number of arrivals from all major source markets in comparison to the Mediterranean. Table 137. Arrivals to the Mediterranean by priority source markets for Cyprus Tier
Tier 1
Source market UK Russia
Total Tier 1 Germany France Nordics Tier 2 Switzerland Israel Ukraine Total Tier 2 Netherlands Belgium Poland Austria Tier 3 Ireland Lebanon UAE/Qatar Total Tier 3 Italy Bulgaria United States Romania China Greece Tier 4 Hungary Japan Lithuania Belarus Jordan India Total Tier 4 Others Total Mediterranean Source: Tourism Economics
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Arrivals
Arrivals
Arrivals
in 2005
in 2010
in 2015
18.341.758 4.710.226 23.051.984 16.875.994 10.397.883 6.314.453 1.901.621 409.264 757.004 36.646.219 4.203.619 2.651.232 1.826.061 2.243.319 1.414.872 159.233 48.323 12.546.659 6.001.544 2.224.778 2.179.498 951.066 239.414 951.940 669.636 691.757 166.995 164.688 100.029 59.605 14.400.950 17.145.015 103.800.828
22.534.305 6.563.285 29.097.590 20.451.495 14.021.150 8.658.213 2.837.566 610.701 1.094.693 47.673.818 5.399.340 3.481.953 2.707.275 2.530.941 1.666.931 265.920 106.131 16.158.491 6.832.961 3.656.939 3.145.247 1.600.469 980.917 952.459 823.923 763.156 272.729 271.735 168.046 121.426 19.590.004 23.940.963 136.460.866
22.548.783 2.568.815 25.117.598 18.086.008 10.922.863 5.326.600 1.840.029 607.032 468.242 37.220.774 4.634.767 2.826.326 829.217 2.103.523 1.642.782 80.502 17.378 12.134.495 5.586.422 2.243.720 1.624.329 455.906 54.436 783.342 733.890 385.974 108.613 81.359 47.894 23.947 12.129.830 11.281.815 97.914.512
CAGR of arrivals 2005-2015 0% 10% 1,5% 1% 3% 5% 4% 0% 9% 2,5% 2% 2% 13% 2% 0% 13% 25% 2,9% 2% 5% 7% 13% 34% 2% 1% 7% 10% 13% 13% 18% 5% 8% 3%
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Consequently, Cyprus has been losing its market share in the Mediterranean arrivals from Western, Northern Central European countries, while it gained market share in the Russian, Ukrainian and Middle-Eastern markets. Table 138. Share of Cyprus in arrivals to Mediterranean Tier Tier 1
Source market UK Russia
Total Tier 1 Nordics Germany Israel Tier 2 Switzerland France Ukraine Total Tier 2 Lebanon Poland Belgium Netherlands Austria UAE Ireland Total Tier 3 Greece Romania Belarus USA Italy Lithuania Tier 4 Hungary Bulgaria Jordan China Japan India Total Tier 4 Others Total Cyprus Source: Tourism Economics
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Share of Cyprus Share of Cyprus Share of Cyprus in 2005 in 2010 in 2015 6,2% 3,8% 5,9% 3,7% 1,0% 6,7% 2,2% 0,5% 1,1% 1,4% 17,1% 1,8% 0,8% 0,6% 1,8% 38,1% 3,2% 1,5% 16,6% 1,1% 2,0% 1,4% 0,4% 1,4% 1,5% 0,2% 9,0% 0,8% 0,1% 0,0% 1,7% 0,7% 2,5%
5,4% 4,8% 5,3% 3,7% 0,8% 9,3% 2,2% 0,3% 1,6% 1,4% 13,0% 1,0% 0,9% 0,8% 1,0% 24,5% 0,7% 1,1% 13,4% 2,1% 2,1% 1,0% 0,2% 1,5% 1,6% 0,4% 3,6% 0,3% 0,2% 0,0% 1,5% 0,5% 2,1%
4,7% 8,2% 5,5% 2,8% 0,4% 14,1% 1,9% 0,2% 4,2% 1,2% 13,7% 1,2% 0,8% 0,5% 1,0% 18,0% 0,3% 1,1% 12,2% 1,4% 5,8% 0,5% 0,2% 4,4% 1,4% 0,2% 3,4% 0,2% 0,1% 0,0% 1,2% 0,3% 1,9%
Tendency
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c.
510
Growth projections Cyprus total growth potential in terms of number of arrivals will serve as a base for setting the targets. THR has considered two growth models: one developed by Tourism Economics and the Premium Destination Strategy growth model developed by THR.
c1.
Tourism Economics’ projection model Tourism Economics’ projections are based on econometric models (which use historical series with certain inconsistencies), and they are available until 2025. For the period 2025-2030, THR has applied linear regression method based on Tourism Economic’ forecast for the period 2015-2025. Figure 182. Tourism Economics' demand forecast model Tourism Economics
c2.
Source market 1 historic data on arrivals
Tourism Economics econometric model
Source market 1 forecast until 2025
Source market 2 historic data on arrivals
Tourism Economics econometric model
Source market 2 forecast until 2025
Source market N historic data on arrivals
Tourism Economics econometric model
Source market N forecast until 2025
THR
+
Total arrivals forecast until 2025
Linear regression forecast until 2030
Total arrivals forecast until 2030
THR projection model The first method used to evaluate growth potential considered a traditional econometric approach based on an analysis of available statistical data from CYSTAT. THR also performed several demand projections based on regressions. However, after performing a regression analysis to identify whether any correlation exists between arrivals/revenue and other tourism variables, the consistency tests showed very poor results with regards to obtaining a reliable forecast and projecting demand. As an alternative, a scenario method has been chosen to project the international tourist arrivals to Cyprus. By using this method, the projections are not limited to a value generated using a purely mathematical assumption, as their interactions with the tourism policy actions that will be implemented by the Cyprus Tourism Strategy are considered. THR has carried out an analysis relating the growth in international tourism demand to the growth in OECD countries’ real income, because based on a previous regression analysis we know that there is an extraordinary correlation between these two variables. The objective was to challenge the set of independent variables with the greatest impact on tourism demand worldwide. Consequently, this factor will be used as one of the most important components in the development of scenarios to project tourism demand for 2030, considering the World Average projection as Cyprus’ projection will adhere to global demand trends. After careful consideration, 5 variables have been selected as the most influential: Updated version 23.03.2017
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•
Income increase in source countries: The study of growth trends in different economies allows to define an interval of the sustained annual real growth rate ranging from 0,5% to 3,0%.
•
Increase in tourism related investment: Developing a better tourism system implies making a greater economic effort. This increased effort is necessary in order to expand the tourism offer and upgrade infrastructures, heritage, and environmental protection, among others. According to THR’s estimates, a reasonable interval for annual investment growth would stand between 1,5% and 4,0%.
•
Increase in tourism promotion and communication: The implementation of a constant campaign of communication, promotion, public relations, and advertising to strengthen the image of Cyprus is fundamental. In this case, THR’s analysis indicates that a plausible interval of annual growth should remain between 1,0% and 3,5% in the different international markets.
•
Market stability (variations in average expenditure): Any positive changes in demand distribution will encourage arrivals from tourists who present a greater average expenditure. After considering different cases, THR has estimated that the annual variation could oscillate from an annual expenditure decrease of 2% to a positive expenditure increase of 2%.
•
Branding Effect: Any positive changes in Cyprus’ international recognition will foster the arrival of tourists who present a greater average expenditure. After considering various cases, THR has estimated that the annual variation could reach up to a 20% increase.
THR has created a model that generates projections for 5 scenarios to evaluate the demand for Cyprus in 2030. Figure 183. THR demand forecast model
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c3.
512
Overview of demand projections from both models If we assume that Tourism Economics forecast is purely a continuation of a trend, and as such represents a worst-case scenario, while THR forecast represents a best-case scenario, Cyprus has the potential to acquire between 63 and 67 million arrivals over the 15 years period 20152030. Figure 184. Cyprus growth potential (in million arrivals)
Impact of the Premium Destination Strategy on projected demand However, this forecast does not consider price elasticity and its impact on the demand. Throughout the course of the strategy formulation, it has been decided that in order to assure a sustainable tourism sector development, Cyprus has to change its tourism value proposition by offering higher value, which naturally implies higher pricing strategy, resulting with a different mix of tourists. Table 139. Overview of different destination strategies Strategy
Description
c4.
World Average
Premium
High-end
This strategy is characterised by the highly predominant weight of the Mass market segment. Affluent and highend segments have a minor share in this strategy. This strategy gets a higher number of tourists aligned with the demand projection obtained by the scenario model, although not that of revenues, when compared with the other strategies.
This strategy presents a more balanced distribution of the different segments, with the weight of standard tourist segment still quite high, but a significant presence of the upper segments too. The Premium strategy attracts fewer tourists than the World Average strategy, but more revenues, given the higher spending capacity of the mix.
The relatively dominant share of high-end and affluent markets characterises this strategy which significantly decreases the number of tourists despite revenues being higher, but requires high quality infrastructure to cover the projected demand which is currently unavailable.
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Strategy for Cyprus
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The Cyprus Tourism Strategy proposes that Cyprus should adopt a Premium Destination Strategy, which in turn has an impact on the demand of -15% on average over the period 2015-2030, due to the price elasticity factor and its impact on the demand. Figure 185. Impact of the Premium Destination Strategy on the demand (in million arrivals)
This forecast has been used as a base for setting the targets per source market in the following chapter.
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514
Arrivals and revenue targets per source market In order to set specific targets per source markets, which include number of arrivals and total revenues, THR developed the following approach: Figure 186. THR approach for setting source market targets
.
1.3 a1.
Targets per source market (arrivals and revenue) Estimated number of international arrivals to Cyprus The total number of international arrivals to Cyprus was calculated based on the Premium Destination Strategy growth model developed by THR. The model is based on the slower than expected growth of arrivals, however with higher-spending visitors.
Figure 187. International arrivals to Cyprus 2015-2030* 4.848.804 2.777.476
2015 *Including same-day visitors
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3.132.201
2020
2030
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a2.
515
Estimated weight of source markets in Cyprus Forecasted source market weight in total arrivals to Cyprus have been calculated by Tourism Economics, a leading global provider of travel & tourism related forecasts. Their forecasting models are based on indepth regression analysis that take into consideration a number of relevant factors, which lead THR to assume that the numbers provided are indeed accurate, and provide the best possible forecast available. Table 140. Estimated weight by source market (vegetative) Tier Tier 1
Source market UK Russia
Total Tier 1 Nordics Germany Israel Tier 2 Switzerland France Total Tier 2 Ukraine Lebanon Poland Belgium Tier 3 Netherlands Austria UAE/Qatar Ireland Total Tier 3 Total Tier 4 Others Total Cyprus
Weight of arrivals Weight of arrivals in Weight of arrivals in to 2015 2020 2030* 41% 20% 61% 9% 3% 3% 2% 1% 18% 2% 1% 1% 1% 1% 1% 1% 0% 8% 9% 3% 100%
36% 24% 60% 9% 3% 3% 2% 2% 19% 2% 1% 1% 1% 1% 1% 1% 0,5% 9% 9% 3% 100%
33% 27% 60% 9% 3% 2% 2% 2% 18% 2% 1% 1% 1% 1% 1% 0,5% 1% 9% 10% 3% 100%
Source: Tourism Economics data extracted on July 2016. *Weight of arrivals in 2030 has been calculated by linear regression based on forecasted data series for the period 2015-2025
The core strategy indicates that Cyprus will decrease its overdependency on Tier 1 source markets, UK, and Russia â&#x20AC;&#x201C; their weight in total arrivals should decrease from 61% in 2015 to 45% by 2030. The strategic decrease of 16% percentage points will be done in 3 phases.
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Figure 188. Decreasing the dependency on UK and Russia Strategic decrease of UK and Russia in total arrivals to Cyprus
3 phases of strategic decrease of UK and Russia in total arrivals to Cyprus
Consequently, the weight of Tier 2, Tier 3 and Tier 4 markets is expected to increase. The increase of weight for each tier has been calculated in accordance to source market priorities within each Tier group. Figure 189. Distribution of arrivals among source market Tiers 2015-2030
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In order to set arrivals weight per source markets, THR has used the following formula, which combines both Tourism Economics forecast and THR approach:
Based on this formula, the following calculations have been made. Since Tourism Economics forecast goes only to 2025, source markets weight for 2030 have been calculated using the same ratio as 2025, applied to THR Tier forecast. Table 141. Estimated weight by source market Tier Tier 1
Source market UK Russia
Total Tier 1 Nordics Germany Israel Tier 2 Switzerland France Total Tier 2 Ukraine Lebanon Poland Belgium Tier 3 Netherlands Austria UAE/Qatar Ireland Total Tier 3 Total Tier 4 Others Total Cyprus
a3.
Weight of arrivals to 2015
Weight of arrivals in 2020
Weight of arrivals in 2030
41% 20% 61% 9% 3% 3% 2% 1% 19% 1,7% 1,4% 1,2% 1,1% 1,0% 0,9% 0,7% 0,2% 8% 9% 3% 100%
37% 19% 56% 10% 4% 4% 2% 1% 22% 2,0% 1,6% 1,4% 1,2% 1,1% 1,1% 0,8% 0,2% 10% 9% 3% 100%
25% 20% 45% 14% 5% 3% 3% 4% 28% 2,2% 1,7% 1,9% 1,7% 1,6% 1,1% 0,9% 1,8% 13% 11% 3% 100%
Estimated arrival targets per source market Based on the numbers derived from the forecast of total number of arrivals and the forecast of source market weight in total arrivals, we are able to set specific targets for the number of arrivals from 6 key source markets, as well as total arrivals. Targets are set for 2020 and 2030.
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Table 142. Arrival targets per source markets Tier
Source market
UK Russia Total Tier 1 Nordics Germany Israel Tier 2 Switzerland France Total Tier 2 Ukraine Lebanon Poland Belgium Tier 3 Netherlands Austria UAE/Qatar Ireland Total Tier 3 Total Tier 4 Others Total Cyprus Tier 1
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Arrivals in 2015 1.066.790 538.826 1.605.616 239.739 89.949 86.143 53.748 34.217 503.795 45.476 36.461 32.300 27.858 25.686 24.323 19.067 4.583 215.754 225.411 82.756 2.633.332
Arrivals in 2020 1.169.165 590.535 1.759.700 328.146 123.119 117.909 73.568 46.835 689.577 63.356 50.797 45.000 38.811 35.785 33.886 26.564 6.385 300.585 290.667 91.672 3.132.201
Arrivals in 2030 1.190.555 991.406 2.181.962 658.434 226.299 153.267 140.637 179.028 1.357.665 108.250 82.617 92.168 84.230 77.864 53.669 42.652 88.895 630.345 533.368 145.464 4.848.804
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b.
Expenditure per person forecast based on Premium Destination Strategy
b1.
Expenditure per person per source market in Cyprus
519
For each of the 6 source markets that are identified as top level priority for Cyprus, expenditure per person in Cyprus has been taken from the data available from CyStat. Due to the fact that it is the only year that provides expenditure per person per source markets for the whole year (January-December), 2014 has been used as the starting point. Table 143. Per person expenditure by source markets (in EUR) Source market UK Russia Nordics Germany Israel Switzerland France Ukraine Lebanon Poland Belgium Netherlands Austria UAE/Qatar Ireland Average
Expenditure per day
Average length of stay
76 90 73,5 84 122 123 90,5 90 137,5 67 1145 116 91 137,5 68 99
11,5 9,5 8,6 11,2 5,9 8,4 10,4 9,5 5,8 9,1 12,1 9,1 9,7 5,8 11,6 9,2
Expenditure per person per stay 878 855 632 945 722 1.032 941 855 798 611 1.386 1.055 883 797 792 878
Source: Adapted from the Republic of Cyprus Statistical Office
b2.
Increase factor of the expenditure per person in Cyprus due to Premium Destination Strategy Tourist destinations can choose from 3 positioning options in terms of daily per capita expenditure. They then adjust their mix of offering, category, and level of service according to the positioning of their choosing. Each positioning strategy corresponds to a specific mix of the 4 segments by degree of sophistication. In the case of Cyprus, the decision has been made that, based on the analysis of the offer and of the development potential, the Premium demand model is optimal to further develop tourism sector. Premium demand predicts a 22% increase in average per person expenditure, based on systematic and continuous development of tourism offer.
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Table 144. Impact on per person expenditure increase according to different strategies Expenditure index Cyprus proposal
b3.
World average
Premium demand
High-end demand
100
122
147
✓
Estimated expenditure per person based on the Premium Destination Strategy It is important to mention that the growth model is based on constant prices, and does not take into consideration factors such as inflation or consumer price index. Hence, the projected increase in expenditure per person/day per source markets is based exclusively on the overall improvement of the offer. Table 145. Expenditure per person according to the Premium Destination Strategy (in EUR) Source market UK Russia Nordic Germany Israel Switzerland France Ukraine Lebanon Poland Belgium Netherlands Austria UAE/Qatar Ireland Average
Expenditure per stay 878 855 632 945 722 1.032 941 855 798 611 1.386 1.055 883 797 792 878
Target Increase by 2030 +19% +16% +23% +22% +19% +22% +23% +22% +23% +23% +24% +19% +25% +30% +20% +22%
Forecast expenditure per person 1045 992 777 1153 859 1259 1157 1043 982 752 1719 1255 1104 1036 950 1071
It is assumed that the growth of expenditure will be equally split over the period of 15 years, as seen in the following figure. Figure 190. Increase of average expenditure
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c.
Revenue targets per source market
c1.
Estimated revenue targets per source market
521
Following the approach described earlier in this Plan, revenue targets for each of the 15 source markets from Tiers 1-3 were set for the short(until 2020), medium- (until 2025) and long term (2030).
Table 146. Revenue targets per source markets, in EUR (000) Source market UK Russia Nordic Germany Israel Switzerland France Ukraine Lebanon Poland Belgium Netherlands Austria UAE/Qatar Ireland
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2020 1.087.809 530.515 222.204 124.321 90.212 81.125 47.220 57.882 43.432 29.459 57.791 40.007 32.232 23.106 5.374
2030 1.243.916 983.276 511.840 260.900 131.684 177.068 207.212 112.916 81.092 69.267 144.761 97.754 59.237 44.192 84.486
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522
Main barriers to overcome A brief description of the barriers to overcome within the different prioritized source markets are presented below: Main barriers of Cyprus in main source markets*
*Barrier levels on the figure are illustrative.
a.
b.
c.
Knowledge & Image •
Awareness. When there is a lack of Cyprus presence in the market due to limited budget in comparison with competing destinations.
•
Ease of information. The facility in which tourists have access to tourism information about Cyprus, things to do, places to visit, where to stay, etc.
•
Understanding. A low level of comprehension and knowledge of Cyprus tourism offer and the advantages that the destination offers.
Interest & Motivation •
Attractiveness. A limited portfolio of experiences in Cyprus, and those that exist are perceived as unattractive.
•
Language sensibility. Language could be a barrier during the different stages of the travel journey, for example when booking or visiting Cyprus (lack of audio guides, maps, etc.) Some nationalities are more sensitive in this aspect than others, and they expect to find the information in their own language.
Purchasing process •
Affordability. A low overall value for money perception, when price competitiveness is low in comparison with competing destinations.
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•
d.
Purchase intention. The willingness of a customer to book a trip to Cyprus in the short/medium term.
Air capacity •
e.
523
Air capacity. It corresponds to a low share of scheduled flights, both in high and low season. Also, high off-season airfare prices in comparison with competing destinations, has been seen as a barrier too.
Proactive trade attitude •
Trade proactive attitude. The degree into which tour operators and travel agents offer Cyprus in their catalogues and send tourists to the destination.
•
Media proactive attitude. The interest that media has in publishing articles or pieces regarding activities and places to visit when travelling to Cyprus.
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Table 147. Main barrier level per source markets
Russia
Nordics
Germany
France
Switzerland
Israel5
Ukraine
Belgium
Netherlands
Poland
Ireland
Lebanon5
Austria
UAE/Qatar5
Awareness1
1
1
2
2
2
2
1
1
2
2
2
1
1
2
1
Ease of information1
3
2
3
3
2
3
2
2
2
2
3
3
2
3
2
Understanding1
4
3
4
4
3
4
3
3
3
3
4
4
3
4
3
Attractiveness1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
Language sensibility2
1
3
1
1
3
1
3
3
2
2
1
1
3
1
3
Affordability1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
Purchase intention1
4
3
3
3
4
3
3
3
4
4
3
4
3
3
3
1
1
2
2
3
2
2
2
3
3
3
4
3
2
2
1
1
3
2
3
3
2
3
3
3
3
4
2
2
2
Trade proactive attitude4
1
1
2
3
2
2
2
2
3
3
2
-
2
3
3
Media proactive attitude
1
1
2
3
2
2
2
2
3
3
2
-
2
3
3
e. Trade d. Air proactive attitude capacity
a. Knowledge & Image
Main Barrier
UK
Tier 3
b. Interest & Motivation
Tier 2
c. Purchasing process
Tier 1
High season air capacity3 Off season air capacity3
4
3
2
1
0
Legend: Closed barrier Open barrier 1 Results assigned considering a Brand Adoption Process and CTO local offices surveys conducted by THR. Gaps of information have been solved grouping countries by geo-proximity: [UK: Ireland], [Russia: Ukraine], [Germany: Switzerland, Poland, and Austria], [France: Belgium and Netherlands]. 2 Results assigned considering a survey conducted by THR with CTO local offices. 3 Results assigned considering Hermes Airports flight schedules. 4 Results assigned considering Cyprus Tourism Board Statistics and Tourism Economics. 5 Results assigned considering Russia as the benchmark for these countries based on regression analysis method.
Regression analysis method Unlike the other countries, Israel, Lebanon, and UAE / Qatar could not be associated to any of the established groups based on geo-proximity. Therefore, in order to estimate the acquisition ratio, a regression analysis was done, taking into account acquisition ratios for 6 countries included in the brand adoption survey and their growth of arrivals to Cyprus in recent years. The hypothesis behind this analysis was that both the acquisition ratio and growth of arrivals represent one destinationâ&#x20AC;&#x2122;s popularity in the given market, hence the
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correlation among these two variables should be high. The end result of R2=0,9773 indicates that the correlation among these two variables is indeed high. Based on the equation’s formula, acquisition ratios for Israel, Lebanon and UAE/Qatar were calculated. Table 148. Acquisition ratios Source market
CAGR of arrivals to Cyprus 2010-15 (variable X)
Acquisition ratio (variable Y=0,6381x + 0,1476)
Israel
18%
26%
Lebanon
12%
22%
UAE/Qatar
13%
23%
Due to the high degree of similarity among acquisition ratios, Russia’s acquisition ratio was applied to Israel, Lebanon, and UAE/Qatar for further calculations.
2.
Action Plan Content
2.1
The 7 groups of marketing tools A description of key marketing tools to be used to reduce the barriers identified in each source market are presented below. For more details of the different types of actions please refer to the Initiative 10 and 11 on Chapter 8.
a.
Media relations programme The media relations strategy defines tools and tactics for how the interest in travel can be stimulated through the publications of articles in online and printed media. A key aspect of the program is to build a media network in each of the source markets. The main tools associated with this programme are: Branded content (good stories that talk about the attributes of Cyprus and the benefits of travelling there), advertorials, usergenerated content (through contests and giveaways), press releases and media kits, press trips and blog trips.
b.
Targeted advertising campaigns Considering that advertising is very expensive, it should be only used in carefully selected media, with very specific objectives. The Internet offers the opportunity to carry out very targeted campaigns at reasonable cost and is also a very good platform to test concepts and messages before investing in more expensive media. The main tools and tactics included in this group are: paid online campaigns (on platforms like google AdWords, Facebook, YouTube, specialized websites), co-op campaigns (considering travel brands and non-travel brands), and special campaigns focusing on advertising the Pre and Post season, as well as, the Winter season.
c.
Digital marketing Besides paid online campaigns and digital media relations explained before, there are a series of digital tactics that Cyprus should apply in “owned” digital channels (those controlled by the organisation and offices abroad). Updated version 23.03.2017
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This specific type of tools includes: the management of own website and social media profiles (in main source market languages), apps development, mobile marketing, and email marketing.
d.
Collateral materials Design appealing, above all digital, collaterals that clearly convey the uniqueness, authenticity, and local flavour of Cyprus in the source market language. This material should trigger the wish to visit and experience Cyprus and create a viral effect. The collaterals include: printed and digital material like brochures, flyers, posters, catalogues, copy texts, multimedia (videos, podcasts, etc.) and merchandising articles.
e.
Additional B2C tools There are other types of approaches in marketing that can be used in Cyprus: Cross channel marketing, also called multi-channel marketing, is all about engaging with the potential tourists across every digital, or physical channel and on any device. From the inbox to social networks, from a billboard to the web, and across laptops, tablets, and smartphones. Street marketing is the use of non-traditional methods and public spaces to earn a greater amount of attention for a campaign. This could include static actions or live activities or performances that transmit the intended message.
f.
Travel trade and airlines oriented tools Marketing activities to motivate potential travellers to plan and book Cyprus through the different tour operators, travel agencies and airline companies. There could be tools targeting the end-consumer (B2C) but under a cooperative agreement with the trade and the airlines. For example, co-op advertising campaigns, special packages, exclusive promotions, off-season discounts on specific sales channels, and special microsites about Cyprus within tour operators, travel agencies and OTAS websites. These tools also include activities aimed at improving the relation between the Cypriot tourism industry and the international trade like ‘Buy & Sell’ Cyprus events and workshops between the trade and the Cypriot industry and ‘Training the trade’ webinars / seminars.
g.
Additional B2B tools Another highly effective B2B marketing tactics revolves around attending selected trade shows and tourism fairs, the organisation of country presentations and events for the trade to present Cyprus’ offering, and customer relationship marketing (including trade / airlines database management) to generate leads and close deals. Each marketing tool has a different impact in reducing each type of barrier. For example, a marketing tool mix recommended to reduce the barrier of Knowledge and Image is based mainly on a strong use of media relations plus some targeted online advertising campaigns. The correlation between the marketing tools and the barrier type is presented in the table below.
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527
1.4
1.5 Press trips and blog trips 2. Targeted advertising campaigns 2.1 Paid online campaigns (google AdWords, Facebook, YouTube, specialized websites, etc.) 2.2 Co-op campaigns (with travel brands and non-travel brands) 2.3 Pre and Post Season special campaigns 2.4 Winter season special campaigns 3. Digital marketing 3.1 Website (in source market language) 3.2 Social media own profiles management (in source market language) 3.3 Apps (in source market language) 3.4 Mobile marketing 3.5 Email marketing 4. Collateral materials (brochures, copy and images for operators, etc.) 4.1 Printed material (brochures, flyers, posters, catalogues) 4.2 Multimedia (videos, podcasts, etc.) 4.3 Merchandising articles 5. Additional B2C tools 5.1 Cross channel marketing 5.2 Street marketing B. Sales and Distribution 6. Travel trade and airlines oriented tools 6.1 Co-op advertising campaigns with travel trade and airlines 6.2 Special packages, exclusive promotions, offseason discounts on specific sales channels 6.3 Micro sites on tour operators, travel agencies and OTAS websites 6.4 ‘Buy & Sell’ Cyprus events and workshops (between the trade and the Cypriot industry) 6.5 ‘Training the trade’ webinars / seminars (tour operators and travel agents) 7. Additional B2B tools 7.1 Trade shows and tourism fairs 7.2 Country presentations/events 7.3 Customer relationship marketing (trade / airlines database management) 4
Legend:
High impact
Updated version 23.03.2017
3
2
1
4 4
3 4
1 1
0 0
0 0
4
4
3
0
0
4 3
4 2
1 1
0 0
0 0
4
3
1
0
0
4
2
1
0
0
4 4
3 3
1 1
0 0
0 0
3
4
4
1
2
4
4
0
0
0
0 3 3
2 3 3
1 2 2
0 0 0
0 0 0
4 4 1
4 4 1
2 2 1
0 0 0
0 0 0
3 3
2 2
1 1
0 0
0 0
3
2
2
3
3
1
1
4
2
2
0
0
4
0
4
0
0
3
0
4
0
0
3
0
4
0 0
1 0
2 2
3 4
3 4
0
0
2
4
4
0
Low impact
e. Trade proactive attitude
c. Purchasing process
1.1 1.2 1.3
Communication (online and offline) Media relations programme (content generation and build a media network) Branded content Advertorials User-generated content (through contests and giveaways) Press releases and media kits
b. Interest & Motivation
A. 1.
a. Knowledge & Image
Marketing tools
d. Air capacity
Table 149. Impact of Cyprus Marketing Toolbox per barrier type
CYPRUS TOURISM STRATEGY
2.2
528
The new marketing models of Cyprus Tourism Offices abroad Since most of the barriers in the source markets are indeed related with marketing, the starting point of the action plan for the source markets is to review the current marketing activities performed by the Cyprus Tourism Offices abroad. Shifting from traditional roles and activities to the new ones in accordance with market needs is of utmost importance, as the network of Cyprus Tourism Offices and partners abroad will have to play the main role in achieving arrivals and revenue targets set for different source markets. THR strongly recommends that special attention is paid to four areas, as seen in the table below. Table 150. New role of Cyprus Tourism Offices abroad Areas of action
Fromâ&#x20AC;Ś
â&#x20AC;Ś.To
Business to consumer (B2C)
Attending requests for information from potential consumers and distributing promotional leaflets.
Re-directing consumers to the Visit Cyprus website / not addressing the public.
Business to business (B2B)
Organising massive events for the trade to present the Cyprus offering.
Implementing a trade development plan, with clear objectives per target, tailor made actions and follow-up.
Business to media (B2M)
Organising events with the press, delivering press notes, implement communication actions, etc.
Leave all the relations with the media and the consumer in the hands of a global PR and media relations agency
Key partnersâ&#x20AC;&#x2122; development
Being mostly reactive in the pursuit of agreements with key partners in source markets (transport, large tour operators, media, etc.)
Implementing a key partner development plan (airlines, travel trade, etc.), with clear objectives, actions, and follow-up.
The current network of 15 Cyprus Tourism Offices abroad also has to be reviewed, and their marketing models adopted with accordance to source market prioritisation. THR suggest three different marketing models to be considered, as seen in the following table.
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CYPRUS TOURISM STRATEGY
529
Table 151. Recommended marketing models according to source markets prioritisation Model B
Model C
UK, Russia, Germany, and Nordics
France, Switzerland, Israel, and Ukraine
Belgium, Netherlands, Poland, Ireland, Lebanon, Austria, UAE/Qatar
4 – 5 people full-time
2 – 3 people full-time
2 – 3 people part-time
Model A
Model D
Place in the prioritisation matrix
Source markets
Staff
Own office Smaller own office (with the support of (with the support a Marketing of a Marketing agency) agency)
Supplier
Full marketing services required.
Responsibility within each marketing area is smaller than in Model A.
Responsibility within each marketing area is outsourced but supported by the National Tourism Authority.
4
3
2
1
4
4
3
2
4
2
2
1
3. Digital marketing
4
4
3
2
4. Collateral materials
4
2
1
1
5. Additional B2C tools
4
1
0
0
6. Travel trade and airlines oriented tools
4
3
2
1
7. Additional B2B tools
4
1
0
0
Scope of marketing services
Marketing tools activated 1. Media relations programme 2. Targeted advertising campaigns
4
Legend:
a.
Marketing agency (as a representative office)
Italy, China, India, Greece, Jordan, USA, Bulgaria, Belarus, Hungary, Lithuania, Romania, and Japan 1 person part-time Embassy or Export Office or Chamber of Commerce or similar
Highly activated
3
2
1
Support in the implementation of marketing actions.
0
Not activated
Model A – Own office (with the support of a marketing agency) These are the closest to traditional type of tourist offices abroad and the ones that should be present in the source markets within the first top quadrant of the prioritisation matrix. These offices will be composed by several employees providing support to the director and fostering sales promotions in that market. They will work on a performance basis - each office will need to achieve a “sales volume” goal to ensure its structure. Their main goal will be to improve
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CYPRUS TOURISM STRATEGY
530
Cyprusâ&#x20AC;&#x2122; market share in that market. Additionally, they will in some cases work together with the marketing agencies to ensure the optimal use of resources and highest return on marketing investment.
b.
Model B - Smaller own office (with the support of a marketing agency) This type of office is very similar with the Model A type, it works with the same parameters as described above, but with less number of employees and a slightly reduced marketing budget. This type of office should be present in the source markets within the other two top quadrants of the prioritisation matrix.
c.
Model C - Marketing agency (as a representative office) In the case of 2nd level priority markets it is proposed that the promotional activities are to be outsourced to professional experts, that is to say, marketing agencies. These agencies have in depth knowledge of their respective source markets, which, together with a training period about Cyprus, may contribute to achieve highly positive results in the source markets. In addition, marketing agencies could also be supported by National Tourism Authority representatives if required. The process for selecting the agencies per source market will be carried out by the National Tourism Authority. However, it is recommended to select a sole global agency that has representation in each source market in order to provide a holistic marketing campaign across all markets. In order to do so, a briefing with expected results of marketing actions in their source markets has to be elaborated. The potential marketing agencies will be evaluated according to a list of well-defined criteria and the best agency will be selected.
d.
Model D - Embassy / Export Office / Chamber of Commerce The lowest office level consists in one person working in the Cyprus embassy / export office / Chamber of Commerce in the selected source market, who will be in charge of carrying out and controlling the implementation of the marketing plan abroad. The implementation of proposed marketing models will result with closure of several current Cyprus Tourism Offices abroad (e.g. Athens, St. Petersburg, etc.), while new ones (e.g. Oslo, Copenhagen, Munich, etc.) will open. The proposed network of Cyprus Tourism Offices abroad and their partners according to the three marketing models and source market prioritisation can be seen in the following figure.
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CYPRUS TOURISM STRATEGY
3.
Action Plan Implementation
3.1
Actions plan to achieve the targets
531
Strategic objectives per source market In order to achieve the targets and provide the best actions possible, it is crucial to understand each of the source markets. To do that, in the following pages THR has provided an overview of each of tier 1, tier 2, and tier 3 source markets, as seen below. Figure 191. Source market snapshot for Cyprus Overview of the forecasts and targets in terms of arrivals numbers of Cyprus.
Overview of arrival and revenue targets for Cyprus in the short, medium and long-term.
Updated version 23.03.2017
Overview of priority products for Cyprus: size of the segment in the market and its priority for Cyprus.
Overview of main barriers to overcome, phases of implementation, main marketing tools, marketing model and budget for the first 4 years.
CYPRUS TOURISM STRATEGY
United Kingdom Figure 192. Arrivals projections for Cyprus Millares
1.400
Table 152. Products to be sold
1.300
Priority products for Cyprus
Size of the market in 2015 (# of annual trips)
Priority for Cyprus
1.200
Sun & Sea
≈15.000.000
4
≈10.500.000
3
≈1.500.000
4
≈1.000.000
4
≈200.000
1
1.100 1.000 900 800 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
a.
532
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays Low priority
0
1
2
3
4
High priority
Table 153. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
1.169.165 1.087.809
2030 1.190.555 1.243.916
Top/below vegetative forecast -798.711
Table 154. Source market action plan Phases
Main barriers
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted a. Knowledge & advertising Image campaigns • Ease of • Digital marketing information • Collateral • Understanding materials 26,9 – 36,5 Model A – Own • Additional B2C office (with the tools support of a • Travel trade and marketing c. Purchasing airlines oriented agency) process tools • Purchase • Additional B2B intention tools Stakeholders: National Tourism Authority, Source Market Abroad Office, Trade (Tour Operators and Travel agencies), Airline companies and Media.
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CYPRUS TOURISM STRATEGY
Russia Figure 193. Arrivals projections for Cyprus Millares
1.400 1.200 1.000 800 600 400 200 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
b.
533
PDS vegetative forecats
THR targets
Table 155. Products to be sold Priority products for Cyprus
Size of the market in 2015 (# of annual trips)
Priority for Cyprus
Itineraries & Culture
≈18.500.000
4
Sun & Sea
≈15.500.000
4
≈1.500.000
2
≈800.000
4
N/A
0
Meetings & Events Sport Stages Cycling Holidays Low priority
0
1
2
3
4
High priority
Table 156. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
590.535 530.515
2030 991.406 983.276
Top/below vegetative forecast -3.154.770
Table 157. Source market action plan Phases
Main barriers
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns b. Interest & • Digital marketing motivation • Collateral • Language materials 4,2 – 5,7 Model A – Own sensibility • Additional B2C office (with the tools support of a • Travel trade and marketing c. Purchasing airlines oriented agency) process tools • Purchase • Additional B2B intention tools Stakeholders: National Tourism Authority, Source Market Abroad Office, Trade (Tour Operators and Travel agencies), Airline companies and Media. a. Knowledge & Image • Understanding
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CYPRUS TOURISM STRATEGY
Nordics (Denmark, Finland, Norway, Sweden) Figure 194. Arrivals projections for Cyprus Millares
700
Table 158. Products to be sold Priority products for Cyprus
600 500
Sun & Sea
400
Itineraries & Culture Meetings & Events Cycling Holidays Sport Stages
300 200 100 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
c.
534
PDS vegetative forecats
THR targets
Low priorityl
0
Size of the market in 2015 (# of annual trips)
1
Priority for Cyprus
≈6.000.000
4
≈4.500.000
2
≈500.000
1
≈450.000
4
≈400.000
2
2
3
4
High priority
Table 159. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
328.146 222.204
658.434 511.840
Top/below vegetative forecast +1.525.905
Table 160. Source market action plan Phases
Main barriers
a. Knowledge & Image • Ease of information • Understanding
20172020
20212025
20262030
Main marketing tools
• Media relations programme • Targeted advertising campaigns • Digital marketing • Collateral materials • Additional B2C tools
Marketing model
Model A – Own office (with the support of a marketing agency)
Budget for first 4 years (Million €)
18,9 – 25,7
c. Purchasing • Travel trade and process • Purchase airlines oriented intention tools d. Air capacity • Additional B2B • Off season air tools capacity Stakeholders: National Tourism Authority, Source Market Abroad Office, Trade (Tour Operators and Travel agencies), Airline companies and Media.
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CYPRUS TOURISM STRATEGY
Germany Figure 195. Arrivals projections for Cyprus
Millares
250
200
150
100
50
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
d.
535
PDS vegetative forecats
THR targets
Table 161. Products to be sold Priority products for Cyprus
Size of the market in 2015 (# of annual trips)
Priority for Cyprus
Sun & Sea
≈22.000.000
4
≈12.000.000
2
≈2.000.000
4
≈1.500.000
4
≈1.000.000
4
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays Low priority
0
1
2
3
4
High priority
Table 162. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
123.119 124.321
226.299 260.900
Top/below vegetative forecast +570.696
Table 163. Source market action plan Phases
Main barriers
2017- 20212020 2025
• a. Knowledge & Image • Ease of information • Understanding
20262030
Main marketing tools
• Media relations programme • Targeted advertising campaigns • Digital marketing • Collateral materials • Additional B2C tools
Marketing model
Model A – Own office (with the support of a marketing agency)
Budget for first 4 years (Million €)
4,0 – 5,4
c. Purchasing process • Travel trade and • Purchase airlines oriented intention tools e. Trade proactive • Additional B2B attitude tools • Trade attitude • Media attitude Stakeholders: National Tourism Authority, Source Market Abroad Office, Trade (Tour Operators and Travel agencies), Airline companies and Media.
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CYPRUS TOURISM STRATEGY
Israel Figure 196. Arrivals projections for Cyprus Millares
180
Table 164. Products to be sold Priority products for Cyprus
160
Size of the market in 2015 (# of annual trips)
Priority for Cyprus*
140
Sun & Sea
120 100 80 60 40 20 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
e.
536
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays Low priority
0
1
N/A
1
N/A
4
N/A
3
N/A
0
N/A
0
2
3
4
High priority
*Based on THR assessment.
Table 165. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
117.909 90.212
153.267 131.684
Top/below vegetative forecast +665.537
Table 166. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding b. Interest & motivation • Language sensibility
20172020
20212025
20262030
Main marketing tools
• Media relations programme • Targeted advertising campaigns • Digital marketing • Collateral materials
Marketing model
Model B Smaller own office (with the support of a marketing agency)
Budget for first 4 years (Million €)
1,3 – 1,7
c. Purchasing • Travel trade and process airlines oriented • Purchase tools intention Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
Switzerland Figure 197. Arrivals projections for Cyprus Millares
160
Table 167. Products to be sold Priority products for Cyprus
140 120
Size of the market in 2015 (# of annual trips)
Sun & Sea
100 80 60 40 20 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
f.
537
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays Low priorityl
0
1
Priority for Cyprus
≈2.000.000
4
≈1.500.000
3
≈200.000
2
≈100.000
1
≈100.000
2
2
3
4
High priorityl
Table 168. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
73.568 81.125
140.637 177.068
Top/below vegetative forecast +371.373
Table 169. Source market action plan Phases
Main barriers
a. Knowledge & Image • Ease of information • Understanding c. Purchasing process • Purchase intention
20172020
20212025
20262030
Main marketing tools
• Media relations programme • Targeted advertising campaigns • Digital marketing • Collateral materials
• Travel trade and airlines oriented tools
Marketing model
Model B Smaller own office (with the support of a marketing agency)
Budget for first 4 years (Million €)
2,7 – 3,6
d. Air capacity • Offseason air capacity Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
France Figure 198. Arrivals projections for Cyprus Millares
200
Table 170. Products to be sold Priority products for Cyprus
180 160
Size of the market in 2015 (# of annual trips)
Sun & Sea
140 120 100 80 60 40 20 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
g.
538
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays Low priorityl
0
1
Priority for Cyprus
≈7.500.000
3
≈7.500.000
4
≈700.000
3
≈700.000
2
≈250.000
3
2
3
4
High priorityl
Table 171. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
46.835 47.220
179.028 207.212
Top/below vegetative forecast +67.724
Table 172. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding b. Interest & Motivation • Language sensibility
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing • Collateral materials
0,9-1,2 Model B c. Purchasing Smaller own process office (with the • Purchase support of a intention • Travel trade and marketing d. Air capacity airlines oriented agency) • High season air tools capacity • Offseason air capacity Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
Ukraine Figure 199. Arrivals projections for Cyprus Millares
120
Table 173. Products to be sold
100
Priority products for Cyprus
80
Sun & Sea
60 40 20 -
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
h.
539
PDS vegetative forecats
THR targets
Size of the market in 2015 (# of annual trips)
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays Low priorityl
0
1
Priority for Cyprus
≈6.000.000
4
≈4.500.000
4
≈500.000
2
≈350.000
4
N/A
0
2
3
High priorityl
4
Table 174. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
63.356 57.882
108.250 112.916
Top/below vegetative forecast +338.931
Table 175. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding b. Interest & Motivation • Language sensibility c. Purchasing process • Purchase intention
20172020
20212025
20262030
Main marketing tools
• Media relations programme • Targeted advertising campaigns • Digital marketing • Collateral materials
• Travel trade and airlines oriented tools
Marketing model
Model B Smaller own office (with the support of a marketing agency)
Budget for first 4 years (Million €)
0,3-0,4
d. Air capacity • Offseason air capacity Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
Lebanon Figure 200. Arrivals projections for Cyprus Millares
90
Table 176. Products to be sold Priority products for Cyprus
80 70
Size of the market in 2015 (# of annual trips)
Sun & Sea
60
Itineraries & Culture Meetings & Events Sport Stages Cycling Holidays
50 40 30 20 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
i.
540
PDS vegetative forecats
THR targets
Low priorityl
0
1
Priority for Cyprus*
N/A
1
N/A
4
N/A
3
N/A
0
N/A
0
2
3
High priorityl
4
*Based on THR assessment.
Table 177. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
50.797 43.432
82.617 81.092
Top/below vegetative forecast +258.298
Table 178. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding b. Interest & Motivation • Language sensibility c. Purchasing process • Purchase intention
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
0,6-0,8
d. Air capacity • High season air capacity Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
Poland Figure 201. Arrivals projections for Cyprus Millares
100
Table 179. Products to be sold Priority products for Cyprus
90 80 70
Size of the market in 2015 (# of annual trips)
Sun & Sea
60 50 40 30 20 10 -
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
j.
541
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Cycling Holidays Sport stages Low priorityl
0
1
Priority for Cyprus
≈3.500.000
4
≈2.500.000
4
≈250.000
1
≈250.000
3
≈200.000
0
2
3
4
High priorityl
Table 180. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
45.000 29.459
92.168 69.267
Top/below vegetative forecast +205.554
Table 181. Source market action plan Phases
Main barriers
a. Knowledge & Image • Ease of information • Understanding c. Purchasing process • Purchase intention
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
1,0-1,4
d. Air capacity • High season air capacity • Offseason air capacity Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
Belgium Figure 202. Arrivals projections for Cyprus Millares
100
Table 182. Products to be sold Priority products for Cyprus
90 80
Size of the market in 2015 (# of annual trips)
Sun & Sea
70 60 50 40 30 20 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
k.
542
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Cycling Holidays Sport stages Low priorityl
0
1
Priority for Cyprus
≈2.500.000
4
≈2.000.000
3
≈200.000
1
≈150.000
1
≈150.000
2
2
3
4
High priorityl
Table 183. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
38.811 57.791
84.230 144.761
Top/below vegetative forecast +143.807
Table 184. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding
c. Purchasing process • Purchase intention d. Air capacity • High season air capacity • Offseason air capacity e. Trade proactive attitude • Trade attitude • Media attitude
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
0,4 – 0,6
Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
Netherlands Figure 203. Arrivals projections for Cyprus Millares
100
Table 185. Products to be sold Priority products for Cyprus
90 80
Size of the market in 2015 (# of annual trips)
Sun & Sea
70 60 50 40 30 20 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
l.
543
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Cycling Holidays Sport stages Low priorityl
0
1
Priority for Cyprus
≈5.000.000
4
≈4.000.000
3
≈500.000
1
≈500.000
4
≈350.000
2
2
3
High priorityl
4
Table 186. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
35.785 40.007
77.864 97.754
Top/below vegetative forecast +136.686
Table 187. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding
c. Purchasing process • Purchase intention d. Air capacity • High season air capacity • Offseason air capacity e. Trade proactive attitude • Trade attitude • Media attitude
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (000 €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
0,4-0,6
Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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CYPRUS TOURISM STRATEGY
Austria Figure 204. Arrivals projections for Cyprus Millares
60
Table 188. Products to be sold
50
Priority products for Cyprus
40
Sun & Sea
30 20 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
m.
544
PDS vegetative forecats
THR targets
Size of the market in 2015 (# of annual trips)
Itineraries & Culture Meetings & Events Sport stages Cycling Holidays Low priorityl
0
1
Priority for Cyprus
≈2.000.000
4
≈1.500.000
3
≈500.000
1
≈150.000
1
≈50.000
1
2
3
High priorityl
4
Table 189. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
33.886 32.232
53.669 59.237
Top/below vegetative forecast +171.174
Table 190. Source market action plan Phases
Main barriers
a. Knowledge & Image • Ease of information • Understanding c. Purchasing process • Purchase intention
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
1.4-1,9
d. Trade proactive attitude • Trade attitude • Media attitude Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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UAE/Qatar Figure 205. Arrivals projections for Cyprus Millares
50
Table 191. Products to be sold Priority products for Cyprus
45 40 35
Sun & Sea
30
Itineraries & Culture Meetings & Events Sport stages Cycling Holidays
25 20 15 10 5 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
n.
545
PDS vegetative forecats
THR targets
Low priorityl
0
Size of the market in 2015 (# of annual trips)
1
Priority for Cyprus*
N/A
0
N/A
4
N/A
1
N/A
0
N/A
0
2
3
High priorityl
4
*Based on THR assessment.
Table 192. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
26.564 23.106
42.652 44.192
Top/below vegetative forecast +135.048
Table 193. Source market action plan Phases
Main barriers
a. Knowledge & Image • Understanding b. Interest & Motivation • Language sensibility c. Purchasing process • Purchase intention
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
0,4-0,5
d. Trade proactive attitude • Trade attitude • Media attitude Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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Ireland Figure 206. Arrivals projections for Cyprus Millares
100
Table 194. Products to be sold Priority products for Cyprus
90 80
Size of the market in 2015 (# of annual trips)
Sun & Sea
70 60 50 40 30 20 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
o.
546
PDS vegetative forecats
THR targets
Itineraries & Culture Meetings & Events Sport stages Cycling Holidays Low priorityl
0
1
Priority for Cyprus
≈1.000.000
4
≈800.000
4
≈100.000
1
≈50.000
0
≈10.000
0
2
3
4
High priorityl
Table 195. Overview of arrival and revenue targets for Cyprus Targets
2020
Arrivals Revenues (in 000 EUR)
2030
6.385 5.374
88.895 84.486
Top/below vegetative forecast -131.103
Table 196. Source market action plan Phases
Main barriers
a. Knowledge & Image • Ease of information • Understanding c. Purchasing process • Purchase intention d. Air capacity • High season air capacity • Offseason air capacity e. Trade proactive attitude • Trade attitude • Media attitude
20172020
20212025
20262030
Main marketing tools
Marketing model
Budget for first 4 years (Million €)
• Media relations programme • Targeted advertising campaigns • Digital marketing
• Travel trade and airlines oriented tools
Model C Marketing agency (as a representative office)
0,3 – 0,4
Stakeholders: National Tourism Authority, Source market abroad office, Trade (Tour Operators and Travel agencies), Specialised Media and Airline companies.
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Marketing Toolbox per source market from Tier 1, Tier 2, and Tier 3
Russia
Nordics
Germany
France
Switzerland
Israel
Ukraine
Table 197. Marketing Toolbox per source market from Tier 1 and 2
UK
3.2
547
4 4
4 4
4 4
4 4
4 4
4 4
4 4
4 4
4
4
4
4
4
4
4
4
4 3
4 3
4 3
4 3
4 3
4 3
4 3
4 3
4
4
4
4
2
2
2
2
4
4
4
4
2
2
2
2
4 4
4 4
4 4
4 4
2 2
2 2
2 2
2 2
3
4
3
3
4
3
4
4
4
4
4
4
4
4
4
4
0 3 3
2 3 3
0 3 3
0 3 3
2 3 3
0 3 3
2 3 3
2 3 3
4 4 1
4 4 1
4 4 1
4 4 1
2 2 0
2 2 0
2 2 0
2 2 0
3 3
3 3
3 3
3 3
1 1
1 1
1 1
1 1
2
2
3
3
2
2
2
2
4
4
4
4
3
3
3
3
4
4
4
4
3
3
3
3
3
3
3
4
3
3
3
3
3
3
3
4
3
3
3
3
2 2
2 2
3 4
3 4
1 1
1 1
1 1
1 1
2
2
4
4
1
1
1
1
Marketing tools
A. 1. 1.1 1.2 1.3 1.4
Communication (online and offline) Media relations programme (content generation and build a media network) Branded content Advertorials User-generated content (through contests and giveaways) Press releases and media kits
1.5 Press trips and blog trips Targeted advertising campaigns 2.1 Paid online campaigns (google AdWords, Facebook, YouTube, specialised websites, etc.) 2.2 Co-op campaigns (with travel brands and non-travel brands) 2.3 Pre and Post Season special campaigns 2.4 Winter season special campaigns 3. Digital marketing 3.1 Website (in source market language) 3.2 Social media own profiles management (in source market language) 3.3 Apps (in source market language) 3.4 Mobile marketing 3.5 Email marketing 4. Collateral materials (brochures, copy and images for operators, etc.) 4.1 Printed material (brochures, flyers, posters, catalogues) 4.2 Multimedia (videos, podcasts, etc.) 4.3 Merchandising articles 5. Additional B2C tools 5.1 Cross channel marketing 5.2 Street marketing B. Sales and Distribution 6. Travel trade and airlines oriented tools 6.1 Co-op advertising campaigns with travel trade and airlines 6.2 Special packages, exclusive promotions, offseason discounts on specific sales channels 6.3 Micro sites on tour operators, travel agencies and OTAS websites 6.4 ‘Buy & Sell’ Cyprus events and workshops (between the trade and the Cypriot industry) 6.5 ‘Training the trade’ webinars / seminars (tour operators and travel agents) 7. Additional B2B tools 7.1 Trade shows and tourism fairs 7.2 Country presentations/events 7.3 Customer relationship marketing (trade / airlines database management) 2.
4
Legend:
High impact
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2
1
0
Low impact
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Lebanon
Austria
UAE/Qatar
1.5 Press trips and blog trips Targeted advertising campaigns 2.1 Paid online campaigns (google AdWords, Facebook, YouTube, specialised websites, etc.) 2.2 Co-op campaigns (with travel brands and non-travel brands) 2.3 Pre and Post Season special campaigns 2.4 Winter season special campaigns 3. Digital marketing 3.1 Website (in source market language) 3.2 Social media own profiles management (in source market language) 3.3 Apps (in source market language) 3.4 Mobile marketing 3.5 Email marketing 4. Collateral materials (brochures, copy and images for operators, etc.) 4.1 Printed material (brochures, flyers, posters, catalogues) 4.2 Multimedia (videos, podcasts, etc.) 4.3 Merchandising articles 5. Additional B2C tools 5.1 Cross channel marketing 5.2 Street marketing B. Sales and Distribution 6. Travel trade and airlines oriented tools 6.1 Co-op advertising campaigns with travel trade and airlines 6.2 Special packages, exclusive promotions, offseason discounts on specific sales channels 6.3 Micro sites on tour operators, travel agencies and OTAS websites 6.4 ‘Buy & Sell’ Cyprus events and workshops (between the trade and the Cypriot industry) 6.5 ‘Training the trade’ webinars / seminars (tour operators and travel agents) 7. Additional B2B tools 7.1 Trade shows and tourism fairs 7.2 Country presentations/events 7.3 Customer relationship marketing (trade / airlines database management)
Ireland
1.1 1.2 1.3 1.4
Communication (online and offline) Media relations programme (content generation and build a media network) Branded content Advertorials User-generated content (through contests and giveaways) Press releases and media kits
Poland
A. 1.
Netherlands
Marketing tools
Belgium
Table 198. Marketing Toolbox per source market from Tier 3
3 3 3 3 2
3 3 3 3 2
3 3 3 3 2
3 3 3 3 2
3 3 3 3 2
3 3 3 3 2
3 3 3 3 2
2
2
2
2
2
2
2
2 2 2
2 2 2
2 2 2
2 2 2
2 2 2
2 2 2
2 2 2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
0 2 2
0 2 2
0 2 2
0 2 2
2 3 3
0 2 2
2 3 3
1 1 0
1 1 0
1 1 0
1 1 0
1 1 0
1 1 0
1 1 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
1
1
1
1
1
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1
2
1
2
2
2
2
1
2
1
2
2
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0
0
0
0
0
0
0
2.
4
Legend:
High impact
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2
1
0
Low impact
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C. Improvement of the Quality 1.
Introduction 1.1
2.
3.
Purpose, plan to close the gaps and benefits
Action Plan Content 2.1
Set up the Cyprus Quality Labels Management Unit
2.2
Develop the Cyprus Quality Label System
2.3
Deploy the CQL System
2.4
Market and promote the CQL in Cyprus and the markets
2.5
Implement a strong monitoring and enforcement system
Action Plan Implementation 3.1
Actions plan to achieve the targets
3.2
Where to find inspiration to set up the CQL
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Introduction
1.1
Purpose, plan to close the gaps and benefits
a.
550
Purpose and main objectives of this Plan The purpose of this separate action plan is to develop a world-class system of quality labels to be awarded to tourism companies based on stringent criteria and quality standards. The final objectives being: raising the quality of the tourism services, fostering a culture of quality improvement, offering higher value to tourists, leveraging the competitiveness of the destinations, and increasing the benefits of the tourism companies.
b.
Gaps identified in the current situation Currently, in Cyprus, in the absence of a framework providing broadly accepted quality standards and an attractive label system, there are significant variations in quality across tourism products and destinations throughout the country. Thus, the tourism supply chain lacks the culture and drive for quality improvement, standards are inconsistent, and there is a high risk of mismatch between the visitors’ expectations and what they really get. This situation has a negative impact on customer satisfaction, recommendation, and retention. On the other hand, the role of the public sector to foster quality is currently perceived by the tourism industry as an unnecessary “control” and a barrier to trade. Efforts are needed to change this image, and to reposition the NTA as a partner to proactively support quality and innovation within the tourism sector.
c.
d.
Measures and targets (KPIs) •
Measure: Percentage of tourism services and companies labelled per year
•
Target: 15% for 2018, 20% for 2019 and 30% for 2020
Plan to close the gap It is proposed to develop and implement the Cyprus Quality Labels (CQL) System to be managed by a specific unit within the NTA. This Unit will define the eligible services, attractions, destinations, and products, and will get inspiration from the quality programmes of leading tourism destinations, to ensure that the standards applied meet the needs and expectations of sophisticated consumers. Private industry stakeholders will be invited to participate in the definition of stringent quality standards, engaging them from the beginning in the programme to get their full adherence. The system will be supported by an e-platform where candidates to the labels will find information about standards and procedures to join the system. Approved businesses will be able to display the label certificate at their premises and to use the symbol in their promotional and marketing materials with the aim of differentiating themselves from other businesses. This approach will stimulate other companies to follow. To realise this Plan, the following work streams and actions should be performed.
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Figure 207. Content of this Plan (14 actions)
Why do quality systems fail? THR has been involved in the design and implementation of tourism quality systems in Spain, Croatia, Switzerland, Malta, Mexico, Argentina, etc. In every project, there have been things that have worked better than others. The recommendations we make for Cyprus are the fruit of what we have learned by implementing quality systems in many destinations. The reasons that have contributed most to the failure of the attempts by (sometimes powerful) governments to implement quality systems in the world of tourism are the following: •
The sector does not perceive value in the system. They see the effort and cost involved and not the benefits. If the system is not mandatory, the sector does not adhere to the system. And if it is mandatory, it might try to trick the system. In a major tourist destination, after 15 years and nearly 100 million dollars invested, less than 10% of the industry is affiliated to the system.
•
The main reason for which the sector does not perceive the value of the system is that it knows perfectly well that the governments do not make any effort to advertise the system and its advantages to potential tourists. "No one knows what the" Q "on the door or on the website of my hotel actually mean”.
•
Procedures are long and complex, based on process certification systems such as ISO and EFQM (following certain process, the result will undoubtedly be of good quality). In some countries, the abandonment rate of the certification process is close to 80%.
•
The industry perceives the system more as a mechanism by which the administration exerts more control and interference than as a potentially excellent marketing system beneficial to the consumer and for companies that work well.
For these reasons, the system that best fits this strategy has been implemented by New Zealand and it is precisely what we recommend for Cyprus. Essentially it consists of creating a label that is granted to those companies and tourist services that meet certain quality criteria and that, consequently, deserve to be known by clients who can choose them with peace of mind. The label then generates various categories: accommodation, attractions, excursions, receptive operators, taxi, restaurants, digital connections, natural spaces, streets and squares, professional skills, and attitudes, etc.
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552
Benefits resulting from a successful plan implementation The Cyprus Quality Labels system will provide consumers with easily identifiable symbols indicating standards of service in the tourism industry that they can trust. Knowing that labels are awarded based on independent assessments will contribute to this end, reducing the anxiety associated to the risk of making wrong choices when planning their trip and along their stay in Cyprus. Improved quality across all the tourism supply chain will foster a consistent delivery of a worldclass customer experience, higher customer satisfaction, higher levels of recommendation both online and through word of mouth- and higher levels of repetition. Customers will therefore become Cyprusâ&#x20AC;&#x2122; best marketers. Tourism businesses will do their best to comply with the standards in order to get access to new powerful marketing channels and increased consumer and business value creation. They will clearly understand the benefits of the label system and will take advantage of the technical and marketing-related public sector support. For tour operators, the quality system will reduce the risks and will differentiate the offer of Cyprus from that of competing destinations. The end result will be the increase of net value perceived by customers. Figure 208. Destination net value formula
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2.
Action Plan Content
2.1
Work stream 1. Set up the Cyprus Quality Labels Management Unit Action 1. Reach an agreement on the organisational structure for the CQL Unit A new unit, staffed by business facilitation-minded people -a mix of talented and experienced officials and private sector experts- will design and manage the Cyprus Quality Label system. The unit will infuse enthusiasm in the industry, providing support for quality improvement, promoting constantly business adherence to quality standards and marketing the quality labels to consumers, the travel trade, and other partners in the markets. It is suggested that the Organisational structure of the CQL Unit has a manager and 4 main areas. Figure 209. Proposed organisational structure of the CQL Management Unit
The table below summarises the main functions of the CQL Management Unit and provides some guidelines regarding the profile of the staff needed.
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Table 199. Functions within the Cyprus Quality Labels Management Unit Unit/Functions
Unit Manager
CQL Development
Description The Unit Manager will be responsible for designing the CQL System as well as managing the implementation and its development over time. He/she must have at least 10 years of experience working in quality management in tourism, ideally in a variety of services (hotels, restaurants, travel agencies, etc.). This area will provide support to the unit manager in the definition, development, and improvement of the system (definition of processes, reporting, adapting the standards, creating new labels, etc.). It should be staffed by a minimum of one CQL development officer. An open and business-minded tourism professional, preferably with experience in different types of services and in quality systems.
Admission and Quality Control team
This area will be in charge of: i) processing admissions, ii) conducting initial quality assessment to ensure compliance with the standards, iii) organizing random monitoring visits, iv) submitting proposals to management to accept new members into the quality scheme and v) issuing warning notices when issues arise and, if necessary, suggesting to remove members from the quality system. A small team of qualified assessors with a team leader will be required. They should convey trust and be respected by the tourism industry. Ideally, they should have experience in managing tourism services and in quality systems. An alternative is to hire seasoned tourism professionals with practical experience in the different subsectors (i.e. accommodation, restaurants, tour operation) and provide specialised training. This area will create and coordinate communication activities and events targeting the tourism industry in Cyprus to make them aware of the quality system and its benefits. Communication activities will also target tourists in Cyprus as well as potential tourists and commercial channels in the source markets.
Marketing
E-platform management
A small team will be needed with a senior marketing officer and two or more officers. The senior officer should have at least 5 years of experience in marketing, preferably in the tourism sector. Officers should have a minimum of 3 years of experience in the implementation of marketing activities. PR skills and good command of online tools and social media are a must. This area will be responsible for running the online platform that will support the CQL. It will provide the Cyprus tourism industry with information about the quality system and will allow to complete a number of processes online (i.e. application, programming assessment visits, etc.). An IT professional with a minimum of 3 years of work experience will be needed. He/she will work in close collaboration with the unit manager and the marketing and admissions teams.
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The CQL Unit will regularly invite professionals representing different tourism activities in Cyprus to share opinions, discuss the quality criteria to be applied and provide inputs to improve the system.
Action 2. Staffing the CQL Unit The Unit could be partially staffed with NTA officers. However, it will be necessary to hire some professionals with hands-on experience in managing tourism companies. It is also important to choose people that support a radical change in the approach to quality management in Cyprus, moving away from quality control towards quality facilitation. It is advisable to start by appointing the Unit Manger and CQL Development Officer, as they will be responsible to define the basic concepts, rules, and procedures for the new Cyprus Quality Labels system. If necessary, they could get support from some external specialists. Once the core of the CQL system is developed and the detailed job profiles are ready, it will be time to get onboard the team leader of the Admission and Quality Control team, the senior marketing officer, and the IT expert. Additional staff will be hired as needed along the process of deploying the CQL system. Having idle officers while the system is fully not functional should be avoided. Training will be provided to all staff, including benchmarks of quality systems, and the objectives, standards, and procedures of the CQL system. The participation of the private sector in some training sessions should be encouraged in order to clearly lay out and share the benefits to be provided to tourism businesses by the quality system as well as to foster a team spirit among CQL team and the private sector.
2.2
Work stream 2. Develop the Cyprus Quality Label System Action 1. Define the labels (concepts plus visuals) The Unit Manager, together with the CQL development officer, should start the development of the CQL system by defining meaningful concepts for quality labels. This should be done using a customer-oriented approach (labels should have a meaning for customers by adding value or reducing anxiety/fears). Difference between a Label and an Endorsement • Label: a symbol, word or phrase indicating that a specific service/product belongs in a particular category or classification. Behind a label there are objective requirements, those that fulfil them have the right to carry such label. Example: Romantic Hotel, Touristic Taxis, Cyprus Souvenirs, etc. The Agencia Catalana de Turismo (Catalan Tourism Agency) manages 10 labels (that will soon into brands): family destination, oenology routs, mountain routes, cyclotourism operators, etc. •
Endorsement: the act of approving of or supporting something. The fact that a public (NTA, etc.) or private (National Association of Culinary Writers) organisation says that it likes/approves/ recommends a service /product. Behind an endorsement there is something (person or organisation) that provides a tourism service. Example: “Best Kebab of Cyprus”, “10 beaches you shouldn’t miss in Cyprus”, etc. For this reason, increasingly, DMO’s search for people or organisation that endorse some services or tourism attractions. Costa Brava (Spain) DMO recommends the
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best restaurants of the area publishing a sample that gathers the most mentioned ones in the ten best tourism book guides. Start by studying existing international labelling approaches, such as those of New Zealand’s Qualmark or the VisitScotland quality assessment system for accommodation and attractions: (http://www.visitscotland.org/business_support/quality_assurance.aspx). For destinations, France is an interesting benchmark: http://uk.france.fr/en/information/french-labelsclassified-themes (see more information at the end of this plan) In principle, the new quality labels should cover destinations, attractions, tourism services and facilities, although the introduction of the labels may be phased. •
For destinations, labels should rather be linked to market segments and/or products such as family holidays, romantic escapes or sports and adventure trips.
•
For accommodations, labels should be developed for different types of formal accommodation services (apartments, holiday homes, camping sites, hotels, rural houses, etc.).
•
Attractions could be labelled by typologies (museums, heritage sites, nature parks and reserves, holiday parks, arts & craft, etc.).
•
Tour operators and activity operators could be labelled by products/main trip motivation (cultural trips, birdwatching, trekking, climbing, biking, diving, etc.).
•
Transport services. Special labels could be developed for overland transport and water transport services (taxis, limo services, transfers, water tours, yacht charter, etc.).
Brainstorm label concepts with representatives of the public and private sectors, but ensure they are briefed about the tourism strategy and international benchmarks first. In order to ensure smooth implementation and to have time to test the system before full deployment, it is suggested to select a few labels to be implemented first. Ideally those responding to the strategic priorities, product portfolio, potential for differentiation and/or feasibility of implementation, among other. Define the “names” and visual symbols that will embed the label / endorsement. The name of each label should represent the essence of the message to be communicated. Labels based on characteristic key assets of Cyprus will be more powerful, attractive, and consistent. Also think of potential target groups. For instance, a romantic destination aims at providing services and experiences that appeal especially to couples, making their stay unforgettable. Labels including the name of the country, Cyprus, will contribute to strengthen the national tourism brand and deliver the brand promise. A few examples of marketable “names” for labels are: • Cyprus rural accommodation • Traditional Meze restaurant • Cyprus charming villas • Cyprus eco-friendly hotels, • Romantic mountain villages of Cyprus The label visual symbols should be designed as a system that could be easily recognised and decodified by the customer. The type, size, materials, etc., of certificates, plates and the like should also be defined at this stage. In this sense, it is important to take into consideration other labels and/or grading systems, as it is shown in the example provided below. Updated version 23.03.2017
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Figure 210. Illustrative examples of labelling system
It is advisable that at the outset, the whole exercise -brainstorming, strategic choices and creativity in messages and graphics- is done in collaboration with specialists that can provide method, expert advice, and creativity to come up with world-class concepts and designs. Action 2. Define the quality standards and the rules of the game for the CQL The next step will be defining the standards for each label. In this regard, it is possible to get inspiration from existing quality schemes and to adapt them to the reality of Cyprus.
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In any case, considering that Cyprus is competing with many international destinations, it is important to avoid the temptation of defining standards too easy to comply with. Although the system may become more sophisticated along time, it should also present some challenges to push improvements in destinations and businesses. Then the “rules of the game” for the label system will be defined including general rules (minimum requirements, rights and duties of members, options for promotion to a new category, penalties, membership fees, etc.). For example, the general requirements for tourism companies to be eligible for a label should include, among other: •
Being legally registered to operate in Cyprus, have all necessary permits and insurances, including a liability policy.
•
Meet the label standards regarding services and facilities.
•
Have an updated web page (consider requesting to have a booking engine)
•
Sign a commitment to maintain the quality standards, adhere to ethic business practices and facilitate inspections.
Private industry stakeholders must be invited to discuss and refine the quality standards. The input from international tour operators could be useful too, as some of them have their own service quality standards. Action 3. Define processes for the efficient management of the CQL system Clear and streamlined processes need to be set up in order to offer guidance to the staff of the CQL Management Unit and to facilitate the interaction with potential and actual members of the system. Figure 211. Processes within the CQL system
Some key processes are briefly described below.
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Process 1: The marketing department is constantly communicating the benefits of joining the CQL system in order to attract interest and generate applications for the CQL labels. This includes ensuring that the content of the IT platform is updated. Process 2: Local businesses and destinations approach the E-Platform in order to get more information on labels, standards, procedures, etc. Process 3: Interested parties fill in an online application form that goes to the Admission and Quality Control department. Upon confirming that the business complies with the initial requirements, they will organise and conduct an initial assessment and prepare an Assessment Report that will make a recommendation to award the label or will outline the improvements needed. The reports will include images to support the claims for compliance or lack of compliance. A template for the reports should be prepared to be used by all assessors. Process 4: Assessment Reports should be analysed and commented in a Committee that will meet every three months or so, and will make the final decision. To ensure that the system has credibility based on independent inspections, it is important that the decision to award the labels is not in the sole hands of the assessors who visit the properties/destinations. The Committee could be formed of the manager of the CQL Unit, selected NTA officers and external experts. Processes 5 and 6 (only if the Applicant is awarded the label): The Label Certificate will be formally issued by the office of the unit manager. Additionally, the Admission and Quality Control team will contact the E-Platform management that will add the new member to the database and will provide information about the online services and contents for registered users only. Those processes should be fully detailed and completed with other processes and a handbook should be prepared to be used by the CQL Unit staff. In line with the new role of quality facilitator to be played by the NTA, processes should contemplate that candidates to get a quality label are offered the opportunity to receive online information/courses and/or specialised training to help them achieve and manage the required quality standards, and to prepare for the assessment.
2.3
Work stream 3. Deploy the CQL System Action 1. Develop the E-Platform to support the CQL System The CQL System will be supported by an online platform targeting different â&#x20AC;&#x153;customersâ&#x20AC;?: the Cypriot tourism industry, travellers, and international tour operators and media. One of the best platforms to get inspiration is New Zealand Qualmark (http://www.qualmark.co.nz/).
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Figure 212. A successful example: New Zealand Qualmark
Source: http://www.qualmark.co.nz/
Ideally, eligible candidates should be able to apply for a label online, as well as follow up on their candidacy, get feedback, download training and marketing materials, etc. The platform should also offer the travel trade, potential tourists, and visitors to search for labelled quality businesses, services, and experiences. This platform should be linked to the corporate site of the new NTA to reach the tourism industry in Cyprus. It should also be linked to the official tourism portal of Cyprus to reach international targets. However, it is recommended to register its own URL (Internet address with the key word in it such as in the case of New Zealand). If for some reason, a fully functional platform is not viable in the short term, a more basic but appealing and clear website should be developed including information about standards, procedures, and contact details (including emails addresses to communicate with the right persons in the CQL Unit). In both cases (sophisticated platform or basic website) they should be backed by a database designed to manage applications, assessments, labelled companies, inspections, etc., that will be the main tool for the work of the CQL Unit team. Moreover, it is important to understand that nowadays the email is a vital communication tool, and that proper procedures should be in place to ensure that the email accounts that are publicised online are regularly monitored and managed (answering messages, follow up,
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etc.). Poor performance of email communications will “send” a negative message to the tourism industry and the markets and should be avoided.
Action 2. Provide training to the team of advisors The training needs of the newly appointed staff will have to be identified and training provided so the team is in a position to perform the tasks assigned and feels empowered. In addition to a comprehensive introduction to quality systems, their main objectives, and approaches, it is advisable to offer the opportunity to learn from best practice. Thus, it is advisable to invite experts from destinations successfully managing a label system, such as France, Austria, or New Zealand, to learn from their experience, to exchange views and to discuss practical issues.
Action 3. Organise public launching event of the CQL system Once the system has been developed, and the platform has reached at least a Beta test phase, it is time to organise the public launching of the CQL, before opening the application process and before the start of the initial assessments. A main event should be organised in the capital that could be followed by regional meetings to present the CQL, the “rules of the game”, application process, etc., to public and private stakeholders. This presentation should include two perspectives: •
Part 1: The system, from an operational point of view
•
Part 2: The system, from a marketing point of view
Above all, the event should clearly communicate the benefits of joining the CQL, such as •
Guided quality management
•
Increased marketing opportunities, especially through joint marketing programmes
•
Better and authentic protection and management of local heritage
•
More and “better” visitors (staying longer, spending more, more respectful, etc.)
•
New entrepreneurial opportunities and jobs
•
Etc.
A small folder should be printed for distribution. Invite the media and provide them with excellent materials (description of the System, visuals of the labels, interviews with high level officers, contact persons, …). Finally, take advantage of other industry events to promote the CQL (association meetings, training sessions, etc.).
Action 4. Conduct initial assessments of applicants After launching the CQL system and calling for applications, those received will be processed and the initial assessments should be organised by the CQL Management Unit. The CQL should have a team of experts that may need some time to develop specific skills and to establish their credibility. An approach that helps to raise the bar from day one, avoiding pressures to lower the standards, and allowing local inspectors to gain experience and recognition from the industry, is to outsource the job to professionals with experience in quality assessments and grading that will provide an objective and professional input in the first rounds of assessments.
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Considering that the objective of the CQL is not punishing the operators but helping them to improve, the specialists will spend time offering personalised advice to managers. If needed, applicants will be given some time to introduce improvement before the final decision to award the quality label is made. After receiving specific training, local assessors will accompany the experts working in teams of two. Local assessors will prepare parallel assessments that will be later compared and commented with the experts. Some sessions with the whole team of internal and external assessors should also be organised to discuss the procedures and how to address issues that may arise. Printed copies of the standards should be prepared and handed to the assessors, together with the instructions to enter points or similar, and the template for their reports.
2.4
Work stream 4. Market and promote the CQL in Cyprus and the markets Action 1. Prepare and implement a CQL Marketing Plan Once the CQL System has been launched it will be necessary to market it proactively both internally (Cyprus) and externally (markets). The CQL system must have its own marketing plan targeting: local label candidates and stakeholders (tourism businesses and destinations), tourists (potential and visitors in Cyprus), and the international travel trade and media. The plan must define the key messages to be passed on, the type of contents to be developed, and the communication channels. The plan should include: â&#x20AC;˘
Regular campaigns aimed at the tourism industry in Cyprus. This should include featuring the tourism quality system in the TV, radio, and local media, including social media. General information on the CQL should be published and broadcasted at the outset. Later on, it is important to maintain a sustained effort to give visibility to the companies joining the system (press releases announcing new members, interviews with managers when they are awarded the label, interviews in a later stage to talk about the benefits obtained, etc.).
â&#x20AC;˘
Some activities should also target the Cyprus population at large to create awareness about the contribution of quality to the competitiveness and success of the tourism sector.
â&#x20AC;˘
Specific communication targeting the international travel trade, travel media and potential consumers. This should include, among other, press releases, news, and articles in the official tourism portals/blogs, displaying information in the trade shows booths, roll ups/folding portable displays in workshops, and distribution of small printed pieces with general information about the scheme. Marketing the CQL externally is important because one of the most frequent problems quality systems face is that they are not communicated with enough persistence to consumers and to the travel trade in source markets. Consequently, if potential tourists and the trade in source markets are not aware of them, adhering businesses at the destination will not perceive the benefit, and it will be difficult to keep them motivated and engaged.
The CQL marketing plan should be aligned with the main national tourism plan prepared by the NTA, taking full advantage of all the resources and platforms available (official website,
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official social media channels, PR service, trade shows and workshops with the travel trade, press trips, etc.). New Zealand Qualmark has been a success because it was incorporated across all marketing platforms used by tourist authorities, both at national and regional / local levels.
Action 2. Develop rich and engaging B2C online marketing content As important as developing contents to explain the quality labels to the tourism industry and the travel trade, is to provide excellent online multimedia content about the labelled destinations, attractions, and services targeting potential tourists and visitors in Cyprus (the customer). Online channels and social media will be key to achieve broad coverage at low cost. For example, visitors should be able to get information on quality services and experiences before deciding to book a day tour or a night activity. High quality images, short videos, and well-told stories will be needed. An official free App to be available for download at the airport, hotels, tourism offices, etc., could be an effective tool to this end. Additionally, all members of the CQL should generate their own themed online contents around the label. They should receive a guide on how to produce this quality marketing content, including templates and standard formats, together with contact details of trusted local photographers and other specialised professionals. Agreements with local arts schools and universities could also be sought in order to lower costs for small companies.
2.5
Work stream 5. Implement a strong monitoring and enforcement system Action 1. Control compliance with the quality standards on a regular basis In addition to the initial assessment of compliance with the requirements and standards to join the system, a mechanism for monitoring that quality standards are maintained should also be in place. Members that do not maintain the standards should be removed from the CQL system and will not benefit from the exposure and advantages offered to the fully compliant members. To ensure that quality is maintained a long time, periodical and/or random inspections should be performed by the CQL Management Unit in order to ensure the quality of the operations and the satisfaction of the visitors. As it is recommended for the initial assessments of candidates, inspection visits should be performed by highly trained inspectors, whose technical expertise and experience exceeds that of the operators they are inspecting. One option is that the same professionals perform initial assessments and inspections, although it may be decided to separate both functions. In some cases, inspections are performed by external professionals using a mystery shopper approach. Based on their reports, when improvements are needed, the CQL Unit staff could approach the property managers or destination managers to discuss the next steps.
Action 2. Continuously monitor customer satisfaction Some general questions could be included in a departure survey, but it is also advisable to organise some specific surveys in labelled companies and destinations.
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Regular surveys to control customer satisfaction and calculation of the Customer Net Promoter Score Index (CNP) should be implemented. A well-designed customer satisfaction questionnaire has to be prepared, including a question to calculate the CNP. The index goes from 0 to 10. Any punctuation below 9 means that, although satisfied, the customer will not proactively recommend visiting Cyprus to family and friends. The survey should be carried out every year and a report with the results made available to the tourism industry. The survey should be complemented with big data analysis reviewing Tripadvisor and other social media. Nowadays, there are very useful and affordable tools to evaluate big data for tourist destinations and businesses, e.g. German-based www.trustyou.com or US-based www.revinate.com. An agreement with an education centre or university could help to reduce the costs of conducting surveys and the subsequent analyses and, more importantly, to ensure that they are conducted on a regular basis allowing for compared data that will inform decision making. Additionally, a cost-effective mechanism that could be easily implemented is to include in the official tourism portal and other official websites the option for customers and the travel trade to send feedback and complaints to the manager of the CQL System. The standards and procedures should include the need for labelled companies and destinations to clearly display in the reception area or the tourism offices a diploma (or similar to be provided by the CQL Unit) indicating the label awarded, as well as contact details for customers to send complaints and feedback to the manager of the system (ideally an email and telephone number).
Action 3. Launch the Quality Excellence Awards The Quality Excellence Awards should be launched as a positive incentive to attract, keep and reward CQL members. In the short term, they could be organised every two years. However, once the initiative is consolidated they could be organised annually. The categories and requirements for the awards should be defined and publicised together with the procedure to select the winners. A jury with participation of industry reputed experts and professionals, together with selected high public sector officials, will carefully evaluate each candidate and award the prizes. Winners will be made public in an official ceremony widely covered by local media. A PR effort including press releases targeting international media, as well as online coverage will also be needed. These awards will make stand out businesses and destinations that excel in quality standards, becoming points of reference for other players throughout Cyprus. Again, the benefits and results achieved by the winners must be communicated internally in order to stress the fact that the investment in excellence pays off.
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Action Plan Implementation
3.1
Action Plan to achieve the targets
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Also, important, the plan aims at involving all stakeholders to carry out and support more and better activities and to handle the entire plan more efficiently. Table 200. Stakeholders involved Responsible
CQL Management Unit/NTA Regional / Local Tourist Organisations Private stakeholders Tourist Associations Travel Trade Specialised Media
Accountable
X
Consulted
Informed
X X X X
X X X X X
Table 201. Action Plan, Budget, and Planning Work stream / Action Work stream 1. Set up the Cyprus Quality Labels Management Unit
PrioRisk rity
Budget for four years Total (.000 €)
Budget per year 18 19
17
950
475
475
-
-
H
H
200
67
133
-
-
H
H
570
190
380
1.083
1.083
M M
3.250
-
1.083
1.083
1.083
M M
20
17
1.1 Reach an agreement on the organisational structure of the CQL Unit 1.2 Staff the CQL Unit Work stream 2. Develop the Cyprus Quality Labels system 2.1 Define the labels (concepts plus visuals) 2.2 Define the quality standards and the rules of the game for the CQL 2.3 Define processes for the efficient management of the CQL system Work stream 3. Deploy the CQL system 3.1 Develop the e-Platform to support the CQL System 3.2 Provide training to the team of advisors 3.3 Organise public launching event of the CQL system 3.4 Conduct initial assessments of applicants Work stream 4. Market and promote the CQL system in Cyprus and the markets 4.1 Prepare and implement a CQL Marketing Plan 4.2 Develop rich and engaging B2C online marketing content
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Timetable Years 18
19
Period 20
•• •• • •• • • • ••• • • • •• ••• •• ••
21-25
26-30
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Work stream / Action
Total (.000 €)
17
2.000
-
400
800
800
5.1 Control compliance with the quality standards on a regular basis
5.2 Continuously satisfaction
Work stream 5. Implement a strong monitoring and enforcement system
monitor
customer
5.3 Launch the Quality Excellence Awards Total
3.2 a.
PrioRisk rity
Budget for four years
6.970
Budget per year 18 19
732 2.472 1.083 1.083
Where to find inspiration to set up the CQL New Zealand’s system of tourist labels
Source: http://www.qualmark.co.nz/quality_experiences.html
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Timetable Years
20
17
H M
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18
19
Period 20
21-25
26-30
••• • • • •• • • •
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Visit Scotlandâ&#x20AC;&#x2122;s Quality Assurance Scheme
Source: http://www.visitscotland.org/business_support/quality_assurance.aspx
c.
A quality label that encompasses all tourist offer in France
Source: http://www.entreprises.gouv.fr/qualite-tourisme/the-qualite-tourismetm-brand?language=engb
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Gastronomic labels for restaurants
Source: http://www.restaurateursdefrance.com/
e.
Labels for the most charming villages
Source: http://www.france-beautiful-villages.org/en
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Spain medieval towns and villages
Source: http://www.spainisculture.com/en/propuestas_culturales/ruta_por_las_ciudades_y_villas_medievales_ de_espana.html
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D. Cyprus Brand 1.
Introduction 1.1
2.
3.
Purpose, plan to close the gaps and benefits
Action Plan Content 2.1
Implement the branding system
2.2
Align the new tourism brand visual with the Strategy
2.3
Perform an integrated 360ยบ brand communication system
2.4
Monitor the brand implementation and its performance
2.5
Implement a strong monitoring and enforcement system
Action Plan Implementation 3.1
Actions plan to achieve the targets
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Introduction
1.1
Purpose, plan to close the gaps and benefits
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Brand = a series of images and perceptions in the consumer’s mind.
a.
Gaps identified in the current situation The absence of a strong and clear tourism brand is a barrier for the effectiveness of a country’s marketing. In that case, the destination is not recognised by the potential tourists and the travel trade is not so eager to invest in its commercialisation. The results of the Brand Adoption Process research specially conducted as part of the preparation of the Tourism Strategy reveal that the main gap in Cyprus is the lack of understanding of what the country has to offer to tourists. Research shows that 78% of those who have not already visited Cyprus do not understand what the Island offers to them. Research has also shown that the few ideas associated with Cyprus are rather negative: 34% think of Cyprus as an insecure and unstable region, and 41% aren’t aware that the country is a member of the European Union and the Eurozone.
b.
Purpose and main objective of this Plan The strategic objective of this separate action plan is to develop a powerful tourism brand aimed at significantly improving the destination brand’s equity among trade businesses and traveller segments of targeted source markets. This branding plan intends to increase the brand power of Cyprus as a tourist destination by 2-10% yearly (depending of the source market) and will focus on communicating the differentiating benefits of Cyprus to all targets.
c.
d.
Measures and Targets (KPIs) •
Measure: Bi-annual brand power measurement.
•
Target (KPI): Yearly increase of 2-10% (depending on the source market) for the next five years.
Action Plan to Close the Gaps This branding plan aims at strongly improving the power of the Cyprus brand by increasing both its “strength” and “stature”. A new brand story will be developed to reposition the tourism offer of Cyprus as a stronger, richer, and diversified product beyond the “Sun & Sea” destination image that the country has today. A differentiated brand will inspire consumers to choose the island as their holiday destination. The brand will transmit the benefits and uniqueness of a holiday experience in Cyprus and will ensure it stands out against the competitor’s destination images. The work streams and activities that should be carried out to close the gaps are described in the following pages and summarised on the figure below:
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Figure 213. Action Plan (13 actions)
e.
Benefits resulting from a successful plan implementation Cyprus will have a strategy-backed new brand baseline and visual that will convey the desired images and perceptions agreed with all stakeholders. Likewise, the tourism sector in Cyprus will have clear guidelines and recommendations to communicate its new brand ensuring alignment with the National Tourism Strategy.
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Action Plan Content
2.1
Work stream 1. Implement the branding system
573
THR has developed a proposal of the elements that compose the essence of the new Cyprus branding system: a brand identity and the main aspects of brand repositioning in the source markets. To complete the system, a model is proposed for Cyprus new brand architecture.
Action 1. Achieve a general agreement on the proposed brand identity and its positioning The new National Tourism Authority Marketing Department will organise an internal meeting to discuss and reach an agreement regarding the proposed Cyprus brand identity and positioning. Brand identity proposed The brand identity prism has been used to illustrate Cyprus brand identity. The prism is a useful tool to describe what the destination stands for and how it wants to be perceived by consumers, as explained in the following figure: Figure 214. The brand identity prism
Source: Own elaboration based on the Identity Prism Model of Jean NoĂŤl Kapferer, The New Strategic Brand Management, 2008, Kogan Page Publishers.
The six aspects of the brand identity prism are divided into two dimensions: â&#x20AC;˘
The constructed source vs. the constructed receiver. A well-presented brand should be seen as a person (picture of the sender: physique and personality) and also as the stereotypical user (picture of the receiver: reflection and self-image).
â&#x20AC;˘
Externalisations vs. internalisation. A brand has social aspects that define the external expression (physique, relationship, and reflection) and aspects that are incorporated into the brand itself (personality, culture, and self-image).
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Strong brands are capable of weaving all aspects into an effective whole in order to create a concise, clear, and appealing brand identity. According to the premises, the suggested Cyprus Brand Identity Prism is as follows: Figure 215. Proposed Cyprus Brand Identity Prism
Source: Own elaboration based on the Identity Prism Model of Jean Noël Kapferer, The New Strategic Brand Management, 2008, Kogan Page Publishers.
Brand repositioning A new brand positioning has been developed based on 4 aspects -the target, the frame of reference, the points of difference and the reasons to believe- that should be the pillars to build the brand management strategy. Table 202. Positioning statement approach proposed Target Target group description in terms of demographic or psychographic variables.
To the lovers of unforgettable holidays and journeys…
Frame of reference Definition of the target’s goal served by consuming the brand.
…Cyprus offers a unique set of premium experiences and services for Relax, Discovery and Enjoyment...
Points of difference Why is the brand superior to alternatives in the same frame of reference?
… with the best weather in Europe all year round, Cyprus is convenient and friendly, and its positive energy will make you have the time of your life.
Reasons to believe Supporting evidence for the frame of reference and the points of difference.
All this is possible due to the magical radiance of our unique light, the 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.
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A short survey will be carried out to test the proposed brand attributes, personality, and values among key tourism industry stakeholders in Cyprus and abroad to test the proposed brand identity among the industry’s key actors, partners and consumers (tour operators, travel agents, media, and a representative group of consumers). Table 203. Cyprus Brand attributes, personality, and values proposal Attributes
Personality
Values
•
Europe’s yearlong best climate
•
Hospitable country
•
Heritage and tradition
•
Attractive tourism experiences
•
•
Environment responsibility
•
Convenience of being a small island
Enjoyable Mediterranean character
The results, will be transmitted to the target markets through the ‘Big Idea’ (explained later) that will be the axis of the Integrated 360º Brand Communication strategy conceived to change the image of the Cyprus brand.
Action 2. Approve a tourism brand architecture encompassing product and regional brands and labels THR advices to design Cyprus branding system according to a top-down structure that unfolds from the Cyprus’ National Tourism Brand as the master/umbrella brand. Thus, the national brand will encompass a variety of sub-brands, each of them having its own relevant promise: •
Territorial brands. By being included in the Cyprus’ brand architecture, regional brands will benefit from the new images and perceptions to be associated with the national brand. The branding architecture will also define how to combine the national and regional brands in the layout of advertising and promotional materials.
•
Commercial brands. Special product brands and labels will be developed to promote destinations and companies committed to offer higher added value to customers. (More details on quality, product and off season labels are explained the separate action plans).
As first step we propose to start directly with the following regional brands, product brands and endorsements: •
Regional brands: All the regions.
•
Product brands: Cyprus Premium and Pre-Post season destination.
•
Labels & endorsements: Cypriot cuisine restaurants and Top 5 itineraries for discoverers.
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Figure 216. Brand architecture
The new National Tourism Authority should collaborate with Cyprus’ regional tourism offices in order to ensure alignment of the regional brands and communication strategies with the National Tourism Brand and its strategy. Technical assistance should be provided to support the regional offices in this process.
2.2 Work stream 2. Align the new tourism brand visual with the Strategy A new brand visual and baseline will be developed, following the guidelines of the PRISM and the positioning previously described.
Action 1. Commission and implement Cyprus’ ‘Big Idea’ It is recommendable to hire a communication/branding agency to develop a ‘Big Idea’ and the associated communication campaigns. This ‘Big Idea’ will be the “umbrella” message throughout the 360º brand communication system. Figure 217. Integrated 360º brand communication system
A ‘Big Idea’ holds the viewer’s attention, stimulates the mind, and stirs the emotions. It is simple and easy to understand. The ‘Big Idea’ must convey the single most important message we
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can say about Cyprus that can influence the consumer to visit the country. A ‘Big Idea’ must comply with 7 requirements: •
To be wide, long-lasting, distinctive, memorable, and relevant. Wide to allow mixed messages, not monotonous. Long-lasting by not being dependent on a limited timeframe context (campaigns usually cover several years).
•
To have a distinctive look and feel that clearly differentiates Cyprus as a tourism destination from the competition.
•
To have capacity to grow and evolve. It must work throughout the years and grow along with Cyprus’ new brand communication.
•
To be big enough to be adapted to various media and into various related cool ideas.
•
To be unifying, fertile and global. Unifying by being bold enough to translate equally well across all media providing strong, unified selling messages, not simply capable of carrying the same tag line; fertile by being able to inspire many different messages; global by not being just related to local cultural or social aspects.
•
To capture the essence of Cyprus’ brand and to be able to protect the same values.
•
To set the tone of the communication. Table 204. Some good examples of Big Ideas
Not in the tourism sector Just do it. Nike Happiness. Coca Cola Impossible is nothing. Adidas I 'm loving it. McDonalds Made of sport. Asics BMW. Like to drive? (Spain)
In the tourism sector There is nothing like Australia I love NY Incredible India Passion for life (Spain) Amazing Thailand Turkey Unlimited 100% Pure (New Zealand)
Figure 218. Examples of India and New Zealand big ideas •
Incredible India
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â&#x20AC;˘
578
100% New Zealand
Source: Source: NTOs official websites
Action 2. Design the new brand visual The National Tourism Authority will entrust the design of the new brand visual to an international branding agency or to a reputed local graphic artist. Taking the importance of the brand into consideration, and in order to get professional results, it is advisable to invite a few selected specialised companies to tender, rather than using an open public tender. Figure 219. Some leading international branding agencies Etc.
Action 3. Test the proposals of brand visual and get the official approval The 5 proposals of brand visual elaborated by the awarded company will be tested before the final decision is made. Basic criteria for the selection should be: simplicity, memorability, and aesthetics. A survey to evaluate the 5 selected proposals will be carried out among the new National Tourism Authority representatives, key private sector stakeholders in Cyprus and the markets (including tour operators, travel agencies, media, etc.), consumers from key target markets and a group of representatives of the local community. The results will be used to decide the final baseline / brand visual for Cyprus.
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Figure 220. Examples of strong tourism brand visuals and baselines
Source: NTOs official websites
2.3
Work stream 3. Perform an integrated 360ยบ brand communication system Action 1. Implement a strong launching of the new brand visual Once an agreement has been reached and the visuals and handbook are ready, the new NTA should organise a public event to present the new brand to the national tourism industry and relevant public organisations. Press releases and social media postings should be used to communicate the new brand to the travel trade and the potential tourists in the target markets. Tour operators should be given the opportunity to request the new Brand Handbook together with some specific guidelines about how they can use the new brand in their websites and promotional materials. Additionally, produce a Cyprus Tourism Brand Handbook, aimed at providing clear guidelines for the consistent use of the new national tourism brand by different teams (NTA, regional offices, private sector, travel trade, outsourced advertising agencies and designers, etc.) in a variety of supports. It will be designed for digital distribution, although in the launching phase it will be useful to print some copies of a summary to be distributed to tourism stakeholders in Cyprus and to the travel trade and media (workshops, trade shows, etc.). Most of this action will be executed by the Media Relations Agency that the National Tourism Authority should contract as a key part of this new Branding Plan.
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Figure 221. International examples of destination brand handbooks Destination Canada
Source: http://en.destinationcanada.com/sites/defaul t/files/pdf/brandToolkit/ctc_brand_guidelines_ 3.0_en_lowres.pdf
Western Australia
Source: https://www.yumpu.com/en/document/view/ 27124253/the-experience-extraordinary-brandhandbook-tourism-western-
Action 2. Launch Media Relations Special Programme In general terms, international media coverage of Cyprus is rather low, and being a small destination it does not often produce big global headlines in other areas. The PR/ communication strategy defines tools and tactics on how the interest in travel can be stimulated through the publications of articles in online and off-line media. It is advisable that the new National Tourism Authority identifies a long-term partner (media Relations Agency) capable of producing and supervising sustained Media Relations activities in the global markets. Some of suggested tactics are: â&#x20AC;˘
Inspirational content in 3rd party channels. In the last years, international travel magazines and guide books have developed strong online channels. Using those to place inspirational content about Cyprus will help to gain visibility when potential tourists are looking for destinations to visit.
â&#x20AC;˘
Collaborate with influencers. A revision of current Cyprus prescribers in the source markets should be carried out together with a search for new potential prescribers (it is important to search beyond sun and beach and mass tourism operators and beyond traditional travel agents). The target customer characteristics and the desired communication approach in each source market should be taken into account.
â&#x20AC;˘
Take advantage of the bloggers power. Together with online publications, travel blogs have become one of the main sources travellers refer to when deciding their leisure holidays.
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•
Give some exclusivity to powerful media. Keep in mind that publications are dealing with more competition than ever. A mass press release is not likely to generate a coveted feature in a national newspaper or a slot on the morning show.
•
Use public relations to target internal publics in Cyprus (tourism industry and population at large). Work with local media to report good news and publish stories around the tourism activity as part of building the industry’s reputation and connect with the local communities.
•
User generated content (co-creation). It is recommended to steadily rise the share of web content, especially on Facebook and other social media, but also on the destination website. The NTA Marketing Department should shift from content generator to stimulating and monitoring contents generated by other parties (mainly the tourism industry and tourists). Examples to foster the generation of contents by third parties are calls for content under specific labels such as “Sunday morning in Cyprus”, or organising online contests about different topics, interests, and places, or providing opportunities for tourists to share photos online (big attractive signs with the name of the attraction, place, etc., are favourite spots for tourists to take photos that they will share to show where they are).
Action 3. Develop “Branded Content” For the media relations programme, and any other promotional communication, it is paramount to generate good stories and content that talk about the attributes of Cyprus and the benefits of travelling there for each of the target audiences. With this in mind, the NTA must work with professional content developers with the mission of producing specific types of content aligned with the strategic priorities. This content should be adapted to different media channels and end-users (mass media, specialised media, travel media, bloggers, instagramers, travel trade, etc.). Images are key in our days. Consumers’ attention is changing and online media are getting more visual than ever. For that reason, Cyprus will need a good set of pictures of the highest quality to raise the interest of media, the trade, and consumers. Altogether, for the brand and each of the experiences, Cyprus will need to produce around 100 to 150 images, 50 of the highest quality (i.e. they could go on an advert) and the rest of a reasonable good quality. To do so, it will be necessary to hire a good photographer specialised in promotion g tourism destinations. A shooting list should be prepared ensuring that key topics will be covered (destinations, products, activities, etc.) along with an itinerary planned accordingly. The image bank should be carefully managed and new images should be added every year (set apart budget to hire a good professional and plan to include local people and tourists). Additionally, new images can be sourced from good local photographers, journalists, tourism industry, etc. Although they may not be of the best quality for advertising, they can be useful to cover specific places, annual celebrations, etc.). In any case, it is extremely important to respect copyright and authorised uses. The images should be kept in high resolution format for printed media and in lower resolution to be used in online media (this is to ensure quick download of web pages). An exceptional example of branded content marketing in tourism is the campaign launched by My Switzerland featuring their most famous and funny couple of granddads.
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Figure 222. Example of branded content campaign Switzerland: More than just mountains
Source:https://www.youtube.com/watch?v=U D0qCPAY2oU
Grand Tour of Switzerland
Source:https://www.youtube.com/watch?v=kH Q4l6PU4DY
Action 4. Launch targeted online advertising campaigns Considering that printed advertising is very expensive it should be only used in carefully selected media, preferably as part of larger campaigns or to reach very special interest niches through specialised media. On the other hand, the Internet offers the opportunity to carry out very targeted campaigns at reasonable cost. Internet is also a very good platform to communicate concepts and messages. Cyprus should look for innovative advertising ideas, with a viral effect element that will multiply the effectiveness of a small investment. An interesting advertising option is to generate ‘advertorials’: a mash up of ‘advertising’ and ‘editorial’) referring to advertising that uses a narrative editorial format. Advertorials provide the opportunity to communicate the brand values using stories combined with powerful photos to target specific market segments, motivations, and interests.
Action 5. Perform co-op branding actions It will be very hard for Cyprus alone to spread the Cyprus brand and its attributes to the world. Thus, alliances with industry partners (transport carriers, travel trade, media brands, etc.) that have the same interest in promoting Cyprus should be facilitated by the new NTA. Cyprus has an important task in identifying the most suitable travel and non-travel brands to engage in partnerships to promote the Cyprus brand. Partnerships with transport carriers, OTAs, tour operators and media brands can give place to cooperative programmes that allow the Cypriot industry to engage in communication and sales actions in foreign markets. A public-private marketing cooperation widespread formula in the industry consists of the National Tourism Organisation (NTO) matching the amount put forward by the private company and/or reaching up to 50% of the total investment required to execute the action. The NTO ensures consistency of actions by setting the rules of the game and approving all actions.
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Co-op programmes, besides spreading the brand attributes, include opportunities, create a direct call to action, drive traffic to their web site, engage in media planning and buying programmes, expand their media and travel trade networks, and other initiatives to make international marketing efforts more effective. An excellent example of co-op branding action is what Tourism Ireland does with different airline brands (see figure below.). Figure 223. Examples of Co-op marketing actions between Tourism Ireland & airline companies Tourism Ireland partners with Aer Lingus to grow tourist numbers to the West of Irelandâ&#x20AC;Ś
Source: Ireland.com
â&#x20AC;Śas well as the Spanish airline Vueling to promote Belfast destination.
Source: Vueling.com
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584
Work stream 4. Monitor the brand implementation and its performance Action 1. Appoint a Brand Manager with clear responsibilities and functions The Brand Manager will be in charge of Cyprus’ brand strategy management, ensuring its correct implementation, as well as consistency of all initiatives with the positioning, the set of images and perceptions, and the brand’s ‘Big Idea’. He/she will be the brand guardian, developer, and communicator in the domestic and overseas markets. The Brand Manager should be someone with expertise in brand management and branding architecture who easily identifies communication opportunities. It is essential that the Brand Manager is supported and empowered by the National Tourism Authority executives. The Brand Manager will: •
Grow the brand and ensure continuous improvement of Cyprus’ brand power.
•
Oversee, monitor and revise Cyprus’ brand identity development and its correct implementation.
•
Maintain Cyprus’ brand integrity (i.e. associated images and perceptions).
•
Protect the baseline and brand visual.
•
Endorse any necessary changes to keep Cyprus brand fresh and innovative.
•
Monitor the brand’s impact on the target.
•
Act as key contact point on all brand-related issues.
Action 2. Activate a National Brand Committee The ‘Brand Committee’ will be composed by representatives of the National Tourism Authority, as well as external brand/marketing professionals, who will support the Brand Manager and provide oversight.
Action 3. Audit periodically the Cyprus’ brand performance Perform a brand equity evaluation according to Young & Rubicam Brand Asset Valuator (awareness, esteem, differentiation, relevance). THR recommends to execute yearly brand audits in each of the strategic key markets.
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Action Plan Implementation
3.1
Action plan to achieve the targets
585
An important element for the success of the plan is to engage and involve the key stakeholders. Table 205. Stakeholders role in this plan
National Tourism Authority The ‘Brand Committee’
Top responsibility for implementing the plan, coordinating the stakeholders involved, and working together with the contracted partners. Will monitor the process of establishing a new branding strategy through key implementation steps.
Informed
X
X
Tourism industry Regional tourism offices The NTA offices abroad
They will provide valuable inputs to build the new brand, and in the implementation of the 360º branding communication actions.
Contracted partners
They will work closely with the National Tourism Authority providing their expertise in brand design and communication.
X
Selected media, journalists, bloggers, etc.
They are key partners in the implementation of 360º branding communication.
X
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Consulted
Description
Accountable
Stakeholder
Responsible
Role in this plan
X X
X
X
X
X
X
X
X
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Table 206. Action Plan, Budget and Planning Work stream / Action Work stream 1. Implement the branding system
PrioRisk rity
Budget for four years Total (.000 €)
17
2.200
978
Budget per year 18 19
978
244
20
-
1.1 Achieve a general agreement on the proposed brand identity and its positioning 1.2 Approve a tourism brand architecture encompassing product and regional brands and labels Work stream 2. Align the new tourist brand visual and baseline with the Strategy
2.500
278
1.111
1.111
-
5.680
473
1.893
1.893
1.420
1.200
-
436
436
327
11.580
1.729
2.1 Commission and implement Cyprus’ ‘Big Idea’ 2.2 Commission the design of the new brand visual and baseline 2.3 Test the proposals of baseline / brand visual and get the official approval Work stream 3. Develop an integrated 360º brand communication system 3.1 Implement a strong launching of the new brand 3.2 Launch a Media Relations Special Programme 3.3 Develop branded content 3.4 Launch targeted online advertising campaigns 3.5 Perform co-op branding actions Work stream 4. Monitor the brand implementation and its performance 4.1 Appoint a Brand Manager with clear responsibilities and functions 4.2 Create the ‘Brand Committee’ 4.3 Audit periodically the Cyprus brand performance Total
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4.419 3.685
1.747
Timetable 17
Years 18 19
•• •
20
Period 21-25 26-30
• ••• •• • • •••• •• •• •• •• •• ••• • • • • •• • •
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E. Seasonality Reduction 1.
Introduction 1.1
2.
3.
Purpose, plan to close the gaps and benefits
Action Plan Content 2.1
Create the PPS Product Club and a PPS Label System
2.2
Develop attractive products for the PPS
2.3
Develop a specific PPS communication strategy
2.4
Develop and implement a specific PPS sales system
2.5
Prepare and implement the Winter Season strategy
Action Plan Implementation 3.1
Actions plan to achieve the targets
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Introduction
1.1
Purpose, plan to close the gaps and benefits
a.
588
Purpose and main objective of this Plan The purpose of this separate action plan is to expand Cyprus’ value proposition and offering with the objective of increasing tourism arrivals during the Pre and Post months of the peak season as well as during the winter season. It is important to highlight that although the objective is achievable, reducing tourism seasonality will require a joint and sustained effort from the tourism authorities and the tourism industry. In order to foster results, it is advisable to work in two phases:
b.
•
First, extending Cyprus’ peak season (July and August) into the Pre and Post months (MayJune and September-October) working with the travel trade and the airline companies.
•
Second, focusing on activities to increase the demand in the Winter Season (JanuaryApril, November, and December).
Gaps identified in the current situation Seasonality of the demand is one of the main key issues Cyprus needs to tackle in order to continue growing a profitable and sustainable tourism sector. Currently there are pronounced fluctuations in visitor arrivals from month to month, with a significant peak of demand in July and August that register high occupancy rates often resulting in room shortages. This highly seasonal pattern is mainly caused by an excessive dependence on the Sun & Sea segment, and resulting in the following negative impacts: •
Overuse of infrastructure and equipment in summer and underutilisation during the winter, which affects business profitability and employment stability.
•
Overexploitation of attractions and saturation of tourism areas.
•
Peaks of demand of water, electricity and other utilities that put pressure on the infrastructure and the natural resources.
•
Insufficient air capacity during off-season.
•
Negative impacts on the image of the destination.
It is critical for the profitability of high added value accommodation (hotels) that off-season occupancy improves, allowing for higher profits and long lasting jobs. As a reference, the Canary Islands faced a similar situation in the past and the effort along more than 30 years to position the islands as an all-year-round destination has modified the seasonal pattern of the demand. This can be appreciated in the following figure.
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Figure 224. Tourism arrivals 2015 Cyprus vs. Canary Islands
Source: Frontur 2015 and CYSTAT 2015
c.
Measures and Targets (KPI) •
Measure: Share of tourism revenues generated in period Nov-Apr.
•
Target (KPI): 28% by 2020, 34% by 2025, and 40% by 2030.
Setting the objective Although Cyprus and Malta share most of its strategic assets, Malta currently has a better competitive performance than Cyprus in terms of seasonality. However, based on the analysis (Chapter 3), THR believes that Cyprus is more attractive than Malta, as its weather is better and the tourism offer is more attractive and varied. Thus, Cyprus has the potential to reduce the seasonality and overcome Malta attracting a higher percentage of tourists in the low season. Figure 225. Cyprus’ positioning objective for the low season in the competitive set
Canary Islands
53%
35%
Cyprus Balearic Islands
22%
Objective = 40%
Malta
14%
Therefore, the target set by THR for Cyprus is to have, at least, a share of arrivals in the low season 5 percentage points higher than Malta by 2030, receiving 40% of the total annual arrivals during the period November – April.
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590
Plan to close the gaps The essence of the Plan The central element of the strategy for reducing seasonality is to adapt tourist services to the PPS and to develop a powerful offer of PPS experiences. It is important to consider what concrete experiences have to be developed and for which generating market. However, these will be meaningless if there is no commitment to the central element of the strategy just described. And this is where, in our opinion, the emphasis should be. This plan will be deployed in 2 phases â&#x20AC;˘
2017-2023 concentrating the efforts in the Pre and Post Season (PPS) months.
â&#x20AC;˘
2024-2030 focusing on increasing demand in the Winter Season months.
Difference between PPS Plan and Winter Plan The implementation of the Seasonality Alleviation Plan is a very complex task and for this reason we advise to work in two stages. In the first, all efforts are concentrated on the PPS. In the second, the action is broadened to the rest of the year. But, basically, these are two stages of the same Plan. The main steps in each case will be to develop specific value propositions and offerings for the period, transform them into marketable products, communicate the products to the targets and make them available through commercial channels. The main work streams and activities are described in the following pages and summarised in the figure below: Figure 226. Plan for Seasonality Reduction (11actions)
e.
Benefits resulting from a successful plan implementation If this plan is implemented efficiently in the following 14 years, Cyprus will become an all yearround destination in 2030, reaching a good balance of tourism income across all 12 months of the year.
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Contribution of measures to alleviating seasonality Below we show how the proposed actions contribute to the reduction of seasonality: Group of actions Create the PPS Product Club and the PPS Label System
Develop attractive product for PPS Develop a specific PPS communication strategy Implement a specific PPS sales system Implement the winter season strategy
How it will contribute to alleviating the seasonality? • Promoting value chain cooperation to create more value in PPS so that Cyprus can attract more demand for this period of the year. • Validating the destinations and services really adapted to the requirements of the PPS market to give security to potential customers. • Increasing the Value Proposition and the tourist attraction of Cyprus in PPS. • Generating PPS demand by making potential customers aware of the benefits of travelling to Cyprus in mid and low season. • Making it easy to purchase a holiday in Cyprus in PPS.
• Expand the PPS value proposition to Winter season.
2.
Action Plan Content
2.1
Work stream 1. Create the PPS Product Club and a PPS Label System Action 1. Create the Pre and Post Season Product Club The objective of the Club is to bring stakeholders together and foster collaboration to develop and market the PPS products. This Club is a collaborative mechanism among key players involved in the PPS program. It is made up of entrepreneurs, organisations, and destinations. This Club has nothing to do with the product & geomarket segments strategy. It is dedicated to better connect the different elements of the value chain to create a competitive offer in PPS first and winter later. The PPS Product Club should be composed of destinations and tourism companies interested in developing and selling PPS offerings. Their commitment and contribution will be needed to reach the common objective of attracting and retaining visitors off the peak season. For the Club to be successfully developed it will be necessary to perform the following tasks: •
Organise information sessions countrywide, targeting public and private sector representatives, with the objective of introducing the initiative and creating interest around the opportunities and benefits of developing PPS offerings.
•
In those sessions, members of the PPS Club will be identified. In any case, it is important to ensure that the Club has representatives of companies along the whole supply chain such as specific hotels (branded and non-branded), restaurants, activity operators, main national operators, DMCs operating in PPS, etc.
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•
The PPS Club will be organised by Regional Chapters. The presidents of each Regional Chapter will constitute the National PPS Committee. The NTA will provide technical support and coordination.
•
An operational framework for the Club will be defined by the National Committee outlining the minimum requirements to be fulfilled by members. These can be fine-tuned in a later stage based on the needs and suggestions of the Regional Chapters.
•
It is important that Club members receive special benefits that should be advertised from the beginning, although they may evolve along time (i.e. being featured in the official tourism portal, participation in specially targeted workshops, PR coverage, etc.).
Action 2. Design and implement a PPS Label System PPS labels will identify destinations and tourism services/activities offering special value during the PPS. The creation of labels for the PPS products will help the tourism industry to develop innovative proposals to be communicated under an attractive umbrella. The label name, together with its graphic image (logo/seal), will facilitate communication and marketing and will contribute to the desired positioning. It is advisable to start with labels for ‘PPS Destinations’ that will help to bring together the local stakeholders and generate value along the supply chain. The labels should be based on the travel motivations and segments prioritised in the strategy (i.e. Best time for Golf in Cyprus, Best time for Wellness in Cyprus, etc.). The objective is to make the places more lively and interesting in the PPS and winter months, offering reasons to travel there and options for tourists to spend their time and not to get bored. PPS destinations should be members of the Product Club and will require leadership from the local tourism authorities. PPS Destinations: It is a "label" to designate those destinations that meet the criteria to be considered during PPS. These criteria, which have to be developed by the NTA, must be oriented to guarantee to the market that the destination will be reasonably operative in PPS and that the tourists will be able to enjoy a comfortable and memorable stay. For example: they must have more than 50% of the offer (hotels, restaurants, shops, excursions, etc.) opened in PPS; should offer a minimum of 10 unique experiences specially designed for the PPS; etc. Who can be a PPS Destination? Access to the "PPS Destination" label starts from the Destination. It is the destination that must first create its own Club PPS and it must decide if it wants to bet on the PPS strategy or not. If so, the Club informs the NTA of its desire to be part of the program and it begins the admission process. Obviously, before all this, the NTA will have designed the details of the program content and will have informed the destinations and their corresponding players of its benefits and how to become part of it. THR does not indicate which destinations should be in PPS. It recommends a method for those destinations that wish to join and benefit from the Plan.
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PPS Services: A label that designates hotels, restaurants, shops, etc. which meet the criteria to be considered PPS services. The NTA will develop the criteria in collaboration with the PPS Club. For example: A signed commitment to operate throughout the PPS season; Heating or fireplace to ensure adequate temperature, information on PPS activities and experiences, etc. Note: Different categories of labels are not expected. There is only 1 label that applies to PPS destinations and services. Note: Who can be a PPS Service? Those establishments that meet the set criteria are formally accepted by the (local)PPS Club.
Requirement
Benefit
Table 207. Benefits to be offered by ‘PPS Destinations’ and basic requirements Special prices In PPS, the prices of tourism services in Cyprus are lower than in peak season months for air travel, accommodation, eating and moving around. Special packages (lower prices and additional advantages)
Uncrowded destinations In PPS months, Cyprus offers a variety of unique places for tourists to enjoy and discover without the summer crowds.
Diversity of tourist attractions Interesting attractions are open and accessible by local transport during PPS for tourists to visit and explore.
60-70% of the tourism attractions and related services operational in the PPS months
Best time for special activities During PPS Cyprus offers a variety of activities targeting different segments and interests (adventure sports, cycling, gastronomy etc.) At least 5 to 7 special experiences developed that do not depend on the weather.
The tourism services joining the Product Club in each destination will be able to display the PPS label and get the associated benefits. In addition to the destination labels, special labels for tourism services could be created to identify companies working countrywide or providing cross-cutting services such as incoming operators (i.e. Best time for Cyprus operators). Incentives THR does not recommend economic subsidies or incentives, but some fiscal advantages. People should sign up for the PPS Plan for the following reasons: •
The Government and the NTA are being taken seriously.
•
The plan is good and makes sense.
•
The mechanisms of stakeholder participation are adequate.
•
The benefits that the Plan can provide are clearly perceived.
•
The tax benefits associated with participation in the Plan are attractive.
•
There is strong leadership around the Plan.
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Institutional framework The effective operation of the PPS Plan requires the following in terms of institutional framework: A dedicated team within the NTA (Minimum 3-5 people reporting to a Director General or equivalent). This could be called PPS Unit.
•
PPS local clubs.
Work stream 2. Develop attractive products for the PPS Action1. Identify and prioritise product/ segments with PPS potential An effort is needed in collaboration with the Product Club members to identify motivational and demographic segments that may be interested in the PPS offering and to come up with interesting product concepts/themes. In line with the two phases already suggested, it will be necessary to combine work at two levels: •
Extend the Sun & Sea season. The Sun & Sea product value proposition should cover the Pre and Post season of the peak months (July and August) including different options to relax by the sea in PPS months. For instance, enhance hotels facilities in order to offer comfort to spend time indoors (i.e. provide seating areas with good views and wi-fi, live music, special spa services, yoga sessions, wine tasting and special menus/events in restaurants), and to adapt opening and closing hours for attractions, shopping, and leisure activities.
•
Expand the product portfolio by identifying and developing other products that are likely to attract visitors during shoulder months. For example, Itineraries & Culture, Nature, Golf and Special Interest tourism have potential for broadening Cyprus’ PPS appeal. Some recommendations regarding product potential by source market are presented in the table below, based on the expert opinion of the CTO offices abroad.
3 3 3
3 3 3 3
1 3 2 1 1
3 3 3 3
3
1 1 2
2
2
1 1
2 2
Note: 1-Top; 2-Medium; 3- Low
Source: CTO Offices Abroad questionnaire
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3 3
3
2 2 1 1 2 1 1 1 1 2 1
3 3 2
2 2 1
3
2
2 2
3 1 1 1 3
2 2
3 3 3 1 3 2 2 3 3 1
Weddings
3 3 3
Religious
2 2 2
Golf
1 1 1
Wellness & Medical
3 2
Sport stages
Sailing & Yachting
2 2 2 3 2
Adventure
2
MICE
1 1 1 1 1 2 1 2 1 1 2
City breaks
2 1 3
Nature
Belgium France Germany Italy Netherlands Poland Russia Nordics Switzerland UK Ukraine
Culture & Itineraries
Country
Wine & Gastronomy
Table 208. Product potential to generate PPS demand from selected source markets Sun & Sea
2.2
•
2 3 1
3 3 3
2 1 2 3 2 2 2
3 2 3 3
2
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According with the CTO offices, in general terms, Culture & Itineraries, Nature, and Sports; including Golf, have the greatest potential. In the UK, Poland, Russia, and Ukraine there is potential to generate demand for Meetings, Incentives, and Conferences (MICE). MICE tourism is one of the opportunities to manage seasonality as meetings tend to take place outside the peak season. Special offerings should be developed to encourage MICE travellers to travel with companions and extend their stay including add-on leisure activities. However, to fully take advantage of the meetings market, Cyprus needs a venue that could cater major events offering top-level services. The following figure provides an example from Playa de Palma in Mallorca Island of how to present the portfolio diversification strategy to break seasonality. Figure 227. Occupation rates projected with Playa de Palmaâ&#x20AC;&#x2122;s product /segment portfolio diversification strategy
Source: Based on data provided by Playa de Palmaâ&#x20AC;&#x2122;s tourism plan.
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A similar exercise as Playa de Palma for matching products during the different seasons of the year is proposed for Cyprus in the figure below. Figure 228. Occupation rates projected with Cyprus’ priority product /segments
Action 2. Develop marketable PPS experiences In order to effectively reach the market, the opportunities and concepts identified in the previous action must be turned into marketable products. Those experiences should be created pointing out Cyprus’ Pre-Post Season points of difference, unique activities and resources. Examples of new PPS experiences and packages to be developed are “Gastronomic delights from the sea”, “Walk the coast” and “Sunset wellness retreat”. On the other hand, some PPS experiences could be based on those developed in the national Cyprus’ system, adapting the concept to off-season (for example, experiences focused on themes like culture, gastronomy, shopping and nightlife that do not depend on weather conditions). The Product Club should be responsible to foster collaboration among its members in order to come up with innovative experiences and packages. In turn, the NTA should provide technical advice and ensure that the Product Club members stay motivated. The technical advice could be provided by NTA staff but it may be necessary to hire external experts at the outset to provide creativity in developing the “story” behind each experience that we want the visitor to remember and share. In any case, the final transformation of the concepts into marketable packages will exclusively depend on the private sector. As an example, the Larnaca Tourism Board has developed series of activities to be experienced off-season.
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Figure 229. Larnaca off-season tours and activities
Source: Larnaca Tourism Board
Action 3. Support the organisation of PPS events Events are used by many destinations as seasonal breakers and Cyprus should have an annual calendar of events to be broadly publicised (online and offline, to potential tourists and visitors in Cyprus), including existing and new events. Some relevant events are already held in Cyprus during PPS and should only be enhanced to make them more attractive to visitors. For example, plan introductory sessions to cultural celebrations (in hotels or other locations), include special activities for visitors such as joining the local dancers or artists before or after the performance, etc.
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Table 209. Some off-season events and festivals held in Cyprus Month January February / March May September
September
September / October
Event / Festival Ski season Troodos for a day in the snow. Carnival Feasts and fancy-dress parties and parades. The Anthestiria Festival A celebration for spring and flowers parade. Ayia Napa Festival Lively event featuring traditional Cypriot music and dances, theatre, and concerts. Pafos Aphrodite Opera Festival Worldwide known cast performances in front of the Pafos Medieval Castle. KYPRIA Festival Performances of distinguished artists from Cyprus and around the world including ballet, theatre, arts, cinema, opera, and music.
New events should be organised to fill gaps in the existing calendar and to bring life to different locations. Attracting large international events such as sailing races or other sports events often have a high cost for destinations, while they have little control over the events that are managed by private companies and may be moved somewhere else. However, there are opportunities to organise annual events with potential to attract hundreds or thousands of people with similar interests (collectors, hobbies, sports, etc.) that can be easily operated with the existing infrastructure and facilities. For example, Cyprus Kayak Week, Cyprus Seafood Festival or Cyprus Triathlon, Marathon (or other cross country running events), as well as charity and/or events around a cause such as environmental protection. Those events may start with a low number of visitors but with a sustained effort they will consolidate along time, becoming more important in terms of demand generation. On the other hand, as they target specific segments and niches, they can be reached through associations, specialised online portals, etc., making relatively easy to get short-term results. The events should be financed with a combination of public and private funds (grants, sponsors, service providers, etc.) and some of them can also generate income through the sale of registration fees, sale of merchandising, sale of food and drinks, etc. In any case, to get and maintain the support from the tourism industry, and to justify public investments and attract sponsors, it is advisable to measure the economic impact of the events and establish priorities for financial support according to their contribution to the PPS initiative objectives. Some criteria to measure the impact of PPS events could be related to: •
International, regional, or local image of the event.
•
Estimated number of visitors/tourists during the event.
•
Involvement of private and public sector supporting the event.
•
Income generated directly and indirectly from the event and other benefits that it will bring to the destination.
•
Proven or demonstrated ability to manage the event.
•
Generation of media exposure of the event, increasing buzz generated on visiting off-season.
•
Etc.
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An agreement with a university could be a viable way to ensure that economic impact studies are carried out in a systematic way following the same methodology. Recommended policy for Events and Festivals THR is very supportive to holding events and festivals as an excellent complement to the Meetings towards generating demand for the PPS, which can be connected with sports, religion, music, education, etc. Nevertheless, it recommends to adopt the following policy: •
The Events and Festivals policy should be fully geared towards attracting demand during the pre and post season and not during high season.
•
For this policy to provide tangible benefits, over a 10-year period Cyprus must develop a menu of no less than 30 events and festivals per year.
•
To this end, Cyprus must create a specialised Events and Festivals unit in collaboration with other government departments, with civil society organisations, universities, municipalities, etc.
•
This unit can be integrated into the Convention Bureau, which would then be called Convention, Events and Festivals Bureau. Should this be the case, it should have two independent and specialised teams.
•
Convention, Events and Festivals Bureau will have to have a very good digital marketing team since this should be the main focus of its Marketing strategy.
A critical part of the Events and Festivals policy is the recruitment of partners who will be responsible for organising, marketing and managing events that will benefit from a certain collaboration and support from the Convention, Events and Festivals Bureau.
2.3
Work stream 3. Develop a specific PPS communication strategy Action 1. Communicate PPS advantages through PR and targeted advertising With well-designed specific Pre-Post Season messages under the PPS labels, the PPS campaign will be based on communicating the characteristics and unique benefits of PPS holidays in Cyprus. The specific actions to be developed will be aligned with the 360º communication system (please refer to the Cyprus Brand Separate Action Plan on Chapter 10). A selection of high-profile offline and online communication channels should be defined with the communication agency. In addition, it is highly recommended to generate advertorials (paid articles) focusing on Cyprus’ PPS offer. A special media relations programme should be launched including publicity in travel magazines as well as social media actions and special blogger trips aimed at generating buzz in the online channels. The communication/marketing mix should be adapted for each priority source market in relation with its PPS potential. As the following figure shows, Russia and UK consumer perception of Cyprus as an all-season destination is higher than in the Nordic Countries.
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Figure 230. Consumers perception of Cyprus as an all-season destination Total
26%
UK
42%
29%
Sweden
18% 47%
11%
13%
41%
Russia
25%
45%
Norway
14%
Germany
0%
10%
Completely
30% Somewhat
40%
15%
50%
Not particularly
9%
60%
70%
Not at all
1% 3%
20%
52%
20%
11%
18%
5%
48%
29%
1%
15%
32%
25%
France
4%
36% 29%
12%
3%
80%
2%
9%
2%
9%
90%
100%
Don't know
Source: Based on brand adoption survey
Action 2. Develop an attractive website to market the PPS offering The PPS website will be deployed within the Visit Cyprus portal but it should also be possible to reach it directly using its own URL (internet address). For example, besttimeforcyprus.com. The website will have 2 ultimate goals: •
Display the PPS’s offerings and providing general information to the customer about the PPS advantages and options.
•
Become a selling tool to distribute and sell the PPS products and services of the PPS club members as is it explained later on.
The website will be managed in collaboration between the NTA, the regional tourism authorities and the private sector. It should be attractive and user-friendly, as well as “responsive” -developed to facilitate proper display in all type of devices: PCs, smart phones, and tablets. The contents should be continuously refreshed and presented in an attractive and appealing manner to potential customers. Generating traffic to the website is a key success factor, so different SEO, SEM, social media, and content strategies need to be performed to reach the potential demand for the PPS offerings.
2.4
Work stream 4. Develop and implement a specific PPS sales system Action 1. Provide training for PPS Product Club members To support the tourism industry in the development and marketing of PPS experiences and packages, special training will be provided. The aim will be to reach higher ratios of success in achieving agreements between Cypriot tourism companies and international distributors and to foster online sales. Some specific objectives will be to introduce and discuss:
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•
The PPS project
•
The PPS impact on their sales
•
The online platform
•
The aim, layout, functioning, advantages, etc. of the PPS online tools created to this purpose
Training should combine classroom training, workshops, and individual sessions. Classroom training will introduce general concepts, present international examples, and provide insights about markets/segments and on how to work with the commercial channels. Special focus will be given to online marketing skills and tools and the use of the platform. Workshops will provide opportunities for members of the product club to get together and jointly come up with ideas and solutions to develop and manage the new offerings. Individual technical assistance sessions may be necessary to support specific efforts by private companies (for example, to provide advice to hotels wishing to introduce improvements in facilities and processes in the PPS or to develop and promote their own events). The NTA should collaborate with the Product Club to prioritise needs and organise the trainings and technical assistance.
Action 2. Develop a “push” attitude towards the travel trade and airlines The National Tourism Authority, with the support of the offices abroad, will seek collaboration agreements with selected airlines and tour operators in the source markets. Most airlines and operators have experience in joint promotion activities with destinations and can provide examples. In any case, it is important to stay focused and ensure that all planned collaborative actions will be aimed at increasing international arrivals in Cyprus during Pre-Post season. For airline companies, the collaboration agreements will be focused on 3 main objectives: •
Maintain current air routes and increase their load factors.
•
Increase the weekly frequency or reschedule the flight’s timetable.
•
Create direct routes between the PPS target cities and main Cyprus airports.
In exchange, airline companies would get benefits such as: being featured in the National Tourism Authority communication actions in priority source markets, preferential time schedules for certain routes, lower airport charges, tax advantages (i.e. airport taxes, fuel taxes, landing and parking taxes), etc. Regarding travel trade partners, collaboration agreements will be focused on: •
Increasing the market share of Cyprus’ PPS offers in the key distributors with highest penetration rates in the market.
•
Enhancing the presence of Cyprus PPS products in the online platforms, both general and specialised.
In exchange, the trade will benefit from co-operational communication campaigns, commercial alliances for promotional events organised in Cyprus as a privileged collaborator and communication campaigns in the source market, amongst other.
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Action 3. Foster direct online sale of PPS products The website dedicated to inform about the PPS products –linked with the Visit Cyprus portalwill also offer the option to sell attractive PPS proposals to end- customers who will be able to book and buy online. The software of the platform will provide tools to easily create and publish products and services, including reservation, and purchasing systems through which the private suppliers will be able to distribute their offer. However, to make the sales system succeed, the private sector needs to become closely involved and collaborate as operators will have to load content and availability, and will have to follow up bookings. Technical support and leadership will be needed at the outset and in the mid-term as it may take some time to see significant results. The role of the National Tourism Authority Marketing Department here will consist in setting up the platform, engaging and training the PPS Club members. The Marketing Department could totally finance the development or purchase of the booking software at the outset, although the running costs can be met through a contribution from the sales agreed with the partners and/or a PPS club membership fee. The platform should offer the private sector an alternative to the high commissions paid to other reservation platforms available in the market. Thus, it is recommended to charge between 8-12% per transaction, against the up to 20-30% commission usually paid in other distribution channels.
2.5
Work stream 5. Prepare and implement the Winter Season strategy This work stream focuses on implementing the second part of the Seasonality Reduction Plan, aimed at enlarging the customer base along the winter season months (January-March, November, and December).
Action 1. Prepare and test the Winter Season strategy in one cluster Once the effort to increase demand in the PPS months has been deployed, the stakeholders are mobilised and procedures are in place, it will be time to implement the second part of the Seasonality Reduction Plan focusing in the winter season months (January-March, November, and December). It will start with a pilot test in a selected strategic cluster following the same approach and guidelines spelled out for the PPS. The difference in this case is that the development of new products will rather focus on the diversification of the product portfolio with products and experiences targeting motivations and interests that may attract new demand in the winter months. According to our experience, the products/experiences, which should be added to the rest of PPS products/experiences in order to generate demand during winter, are the following: •
Themed mega swimming-pools covered by domes generating tropical micro-climates inside.
•
Education programmes on topics of interest on “successful aging”: healthy dietetic, brain exercises and activities, great cultural topics, etc.
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•
Musical experiences that benefit dance, movement, and interaction.
•
Special privileges for the majority of visits and excursions (typical breakfast in Kurion, Heritage card that allows free access to most heritages sites, etc.)
•
“Christmas in Cyprus” programme in which rituals and celebrations common of these holidays take place, etc.
•
Organisation of 5 events of great size and complexity, before and after Christmas.
•
Etc.
Action 2. Implement the tested Winter Season initiative on all clusters with potential Once the Winter Season actions have been tested in one cluster, roll-out implementation in other clusters. The roll-out effort will be deployed along the 2024-2030 period to complete the implementation. THR recommends that, until at least 2025, there be only two destinations in Cyprus that focus heavily on the winter season (many more may focus on the PPS) in order to achieve a critical mass of open services and economies of scale in operations. One of them should be located in the large area served by the airport of Pafos and the other in the one by Larnaca. When these two destinations are consolidated, Cyprus can proceed to roll out the “winter”. As in the case of the PPS, it will be the destinations that must submit their candidacy to the NTA.
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Action Plan Implementation
3.1
Action plan to achieve the targets
604
Table 210. Stakeholders role in this plan
National Tourism Authority Local Tourism Industry
It will lead the implementation, coordinating the stakeholdersâ&#x20AC;&#x2122; participation, and monitoring the execution. Cyprus tourism attractions, services and hospitality industry should remain operative during PPS months.
X
X
Airline companies Tour operators and travel agents
Their involvement in the plan is essential to increase Cyprus capacity in the PPS months.
X
They will be key partners of this plan, including the PPS specific portfolio and proposals in their offer.
X
NTA offices abroad
They will support the negotiations with the travel trade and the airlines in their source market. They will be responsible for implementing the PPS Club and PPS Label system on their regions.
Regional tourism offices
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X
X
Informed
Consulted
Description
Accountable
Stakeholder
Responsible
Role in this plan
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Table 211. Action Plan, Budget, and Planning PrioRisk rity
Budget for four years
Work stream / Action
Total (.000 €)
Work stream 1. Create a PPS Product Club and a PPS label system 1.1 Create the PPS Product Club
1.920
17
Budget per year 18 19
20
853
853
213
-
1.710
190
760
760
-
2.510
-
502
1.004
1.004
2.310
-
-
990
1.320
2.990
748
748
748
748
11.440
1.791
2.863
3.715
3.072
1.2 Design a PPS label system
Work stream 2. Develop attractive products for the PPS 2.1 Identify and prioritise product/segments with PPS potential 2.2 Develop experiences
marketable
PPS
2.3 Support the organisation of PPS events Work stream 3. Develop a specific PPS communication strategy 3.1 Communicate advantages through PR targeted advertising
PPS and
3.2 Develop an attractive website to market the PPS offerings Work stream 4. Develop and implement a specific PPS sales system 4.1 Provide training Product Club members
for
PPS
4.2 Develop a “push” attitude towards the travel trade and airlines 4.3 Foster direct online sales of PPS products Work stream 5. Prepare and implement the Winter Season strategy 5.1 Prepare and test the Winter Season strategy in one cluster 5.2 Implement the tested Winter Season initiative on all clusters with potential Total
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Timetable 17
Years 18 19
20
Period 21-25 26-30
••• •• •• ••• • •• •• ••• ••• • •• • •• •• •• • • •• •• • •
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F. Integrated Spatial Tourism Development Plans for Major Tourism Areas
Part I.
Current situation, guiding principles, and general action plan
Part II.
Recommendations for Integrated spatial development by areas
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Part I. Current situation, guiding principles, and general action plan 1.
2.
3.
4.
Current Situation 1.1
Introduction
1.2
Current situation
Action Plan Content 2.1
Planning Concepts
2.2
Guiding principles to follow
2.3
Urban environment and landscaping
2.4
National Tourism Development Master Planning
2.5
Regulatory Framework
2.6
New Real Estate policy
2.7
Accompanying measures
Recommendations on growth models 3.1
Actions plan to achieve the targets
3.2
Tourism development pipeline
3.3
Recommended growth model for Cyprus
Action Plan proposed 4.1
Action plan and priorities
4.2
Setting priorities to achieve the objective
4.3
Stakeholders
4.4
Budget
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Current Situation
1.1
Introduction
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This plan specifies recommendations and guiding principles to ensure a successful implementation of the premium destination strategy. The strategy requires to develop comprehensive integrated spatial development plans for all major tourism areas with the purpose, not only to develop new products, services, and accommodation facilities but also to reposition and upgrade the existing products and assets.
a.
Objectives This plan aims to provide a basis for the future tourism development plan, that will be implemented during the period 2017 – 2030. The recommendations herein seek to create a framework for the integrated special development plans that will support the strategy, by attracting and accommodating more, and higher yielding tourists to Cyprus. The first of the plan’s objectives is to define a basis for a future tourism development master planning effort that is easily implementable by those delegated with ownership of the plan. The second is to explain the recommended growth strategy. This involves a specification of how much (volume), where, how and at what speed tourism growth can and should be achieved in the 2017 – 2030 period. The third, and very important, objective is to consider the integration and alignment of tourism planning and development with governmental strategy in the areas of infrastructure, agriculture, environment, and employment.
b.
Main components The plan herein focuses on 6 main components: •
Consolidating future tourism development in resorts, clusters, and tourism zones of national interest (TZNIs);
•
Enhancing the market position of existing clusters through upgrading and refurbishment, as well as new development;
•
Defining a residential real estate policy that places controls on development but increases tourism investment attractiveness;
•
Optimising infrastructure and improving the urban environment, including the visual aesthetics in all tourism areas of the island;
•
Complementing tourist clusters with better tourism services;
•
Recommending legislative and regulatory updates to improve the planning and development framework.
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609
Major tourism areas Cyprus has a great diversity of tourism attractions spread across the territory. Besides the wellknown coastal regions, inland areas of Cyprus have potential to attract tourists and diversify the products segments offered. THR has analysed the tourist attractions of the country dividing them into 4 main regions and areas of interest for tourism, highlighted in the figure below: Figure 231. Cyprus tourism regions
c1.
Eastern region Paralimni Paralimni is known for its high-quality water and sandy beaches, the best known of which is Fig Tree Bay. Paralimni is also known as a family oriented destination, and over the years it has grown into a sizeable modern tourist cluster, with many high capacity hotels, hotel apartments, restaurants, pubs/bars, and associated facilities. The main attractions are Cape Greco, one of the most beautiful natural places on the country, and Protaras also known as one of the most popular diving destinations, in Cyprus and the Eastern Mediterranean. Ayia Napa Ayia Napa is one of Cyprusâ&#x20AC;&#x2122;s most popular, and famous, tourist cluster. With 14 â&#x20AC;&#x2DC;Blue Flagâ&#x20AC;&#x2122; beaches - the most famous being Nissi Beach - it is a heaven for beach and water sports enthusiasts, particularly younger tourists. Whilst it caters for tourists of all ages and tastes, its primary reputation is for beach parties and nightlife. The cluster contains more than 80 bars and 12 clubs, some of which feature headlining UK and international acts. Activity in the resorts and on the beaches, is augmented by the adjacent Cape Greco headland, which attracts visitors for sightseeing, cliff jumping, bike riding and a variety of other activities.
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Larnaca Larnaca is the third largest city in Cyprus. Its key tourism assets are Foeticides’ Promenade, the Church of Saint Lazarus, Hila Sultan Tekke, Kamares Aqueduct, the medieval fort, and the Salt Lake. Larnaca is home to the country's main airport, Larnaca International Airport. It also has an important seaport and a marina (the subject of redevelopment analysis and planning)
c2.
Western region Limassol Limassol (City & Suburbs) is the second largest urban area in Cyprus, and its de-facto ‘commercial capital’, and its major sea port since 1974. Despite its industrial drivers, tourism is an important sector for the city. In recent years, Limassol has experienced a construction boom fuelled primarily by the tourism sector, and the development of the new marina, one of the country’s largest projects for many years. The government has also been pro-active in the city, investing in infrastructures to improve the quality of life of residents and tourists. Pafos Pafos is well known for the remains of the Roman Governor's Palace with its fine mosaics. The city is included in the official UNESCO World Heritage List. Tourists to Pafos, who comprise primarily families and couples looking for sun and beach holidays, can arrive directly to the city thanks to Pafos International Airport, the country's second-largest airport. Pafos has been selected as a European Capital of Culture for 2017 and this is expected to give a boost to tourism in the city. Polis Polis is a small town at the North-West end of the island, at the centre of Chrysochous Bay, and on the edge of the Akamas Peninsula. Polis is served by the port of Latchi, a year-round attraction, reputed for its taverns, water sports facilities, and boat rides to Akamas. Another advantage of Polis is its proximity to Akamas Peninsula, an area of outstanding natural beauty and home to attraction such as the Baths of Aphrodite, Lara Bay, and the Avakas Gorge.
c3.
Mountains & Lowlands region Troodos Due to its altitude, the mountain is covered in snow during winter and is a popular resort for skiers during the skiing months. During summer, tourists and locals alike visit the area, all keen to take a break from the heat at sea level, and to walk through the forests on one of the nature trails, or enjoy the waterfalls and surrounding views. The mountains are understood to be unique in their geology and for their wealth of flora and fauna, containing as many as 750 different species of plants, and many species of wildlife of interest.
c4.
Nicosia Nicosia has been the capital of Cyprus since the 10th century. The city has established itself as the island's financial capital and international business centre. In 2012, Nicosia was the 5th richest city in the world in relative purchasing power. The city has a long history; however, the current political situation is a challenge that limits its leisure tourism potential in many ways. The inland geographical location also limits its potential on an island whose main tourist attractions are its climate and beaches.
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611
Current situation The approach taken to achieve the objectives began with familiarisation visits to see the current situation first hand. Visits also identified currently un- or underdeveloped areas that hold future tourism development potential. These visits were combined with valuable meetings with public and private sectors stakeholders and a review of the regulatory framework. Compiling detailed geographic data further enabled an understanding of the land, the different areas, the infrastructure, and the spatial relationship between locations. Analysed alongside official tourist statistics, these data provided a basis upon which optimal future development has been specified.68 Regulated planning in Cyprus is based around the Town and Country Planning Law first approved in 1972, but not enacted until 1990. Although there have been several amendments, the law has never been the subject of a full update. Together, The Streets and Buildings Regulation Law and The Town and Country Planning Law define the development and building control system in Cyprus for all types of development. Development in all areas is carried out through the implementation of Development Plans, currently a three-tier hierarchical structure - The Island Plan is on the highest tier, with Local Plans and Area Schemes at lower tiers, and the Statement of Policy for the Countryside for parts of the island’s territory not covered by any other development plan. THR research has revealed that the process involved in obtaining permission is not as efficient as it could be and should be, with the result that positive development has sometimes been obstructed, and other developments have produced negative benefits for the tourism economy.
1.2.1 Planning and development framework a.
Tourism development zones Based around the provisions of the Statement of Policy for the Countryside, the government has 41 designated ‘Tourism Zones’ (amounting to 5,319 hectares) - areas in which tourism development is primarily permissible (subject to all other statutory criteria being met). In some cases, the permissible development in these zones is incentivised by the ‘Planning Incentives Scheme’ – a scheme agreed by the Council of Ministers Decision No. 75.172, dated 29.05.2013, and updated 28.05.2014, 03.03.2015 and 29.07.2015. Most of the tourism development zones are around the coastline. This has allowed, and encouraged, developers to build their projects in ‘frontline’ coastal locations, with the result that there has been excessive ‘linear’ development in some areas. This pattern of development is unsustainable and is one of many outstanding planning and development issues that the government should address during the implementation of the current plan.
THR acknowledges and appreciates the cooperation and assistance provided by various officers in the Ministry of Interior, Department of Lands and Surveys, and the Department of Town Planning and Housing. Without their help, an appropriate degree of accuracy would not have been possible. 68
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612
Development density The density at which development is permitted is a key factor in creating tourist facilities that are both sustainable and profitable, and, for tourists, create the appropriate levels and balance of activity, experience, and tranquillity. The tourism development plans should prioritise higher density cities (equally applicable to tourism resorts and clusters) as they are more sustainable than low-density ones, and a lot of urban planning theory, particularly in North America, the UK, Australia, and New Zealand has been developed on the premise of raising urban densities. Cyprus should therefore establish development density ranges, limited by the World Tourism Organisation (UNWTO) recommendation that planning and capacity standards in resorts should go from no less than 20 and more than 100 beds per hectare, apart from urban type resorts that could increase to 200 – 1.000 beds per hectare.
c.
Permissible development density in Cyprus The Local Plans and the Policy Statement for the Countryside specify permissible building coefficients (development density), and plot coverage (footprint). However, there is not a single framework applicable to the whole island as different provisions exist depending on the location, and the type and scale of development proposed. This strongly contributes to create unbalanced tourism development and should be properly addressed. The starting point for permissible development density under the Policy Statement is understood to begin at a ratio of 0,20:1 for tourist accommodation, and an additional 0,05:1 for a ‘tourism enrichment project’, with coverage (footprint) of not more than 0,15:1. Such developments must be planned on plots of at least 100.000 square metres, and the total number of tourist beds must not exceed 1.500. The Planning Incentives Scheme increases the maximum building coefficient for Integrated Tourist Complexes by 30%, regardless of whether a Local Plan or the Policy Statement applies. Additionally, if all the development’s energy requirements are to be met by renewable energy resources, then the maximum building coefficient can be increased by a further 5%. So effectively, this means that the maximum building coefficient ranges from 0,325:1 – 0,337:1. Similar enhanced provisions are available for ‘Integrated Developments of Large and Composite Uses’ (where tourism facilities may only be one component part of a development). This can result in the maximum building coefficient allowed to range from 0,60:1 – 0,95:1. The diverse and complex range of building coefficients that may be enforced on each project, depending on its content, location, and which plans or policies are applicable to it, causes major confusion for industry stakeholders. They perceive the current system as overly complicated and it should be simplified and standardised to encourage new development.
d.
Land The lack of land available, especially suitable for tourist development in strategic locations, is a fundamental need of the plan. Land ownership and occupation in Cyprus is complex, with various ownerships and controls in place, which include state owned land, Protected Areas / National Parks. Sovereign Base Areas (SBAs) and privately-owned land.
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Compensation programs should be considered to promote land acquisition for tourism development in locations where a premium product has great potential to be developed. Recommendations on how to address this issue are an important part of this plan.
e.
Environment Tourism attractiveness is reliant not only on the quality of physical tourism assets and tourism experiences, but also on the quality of the natural environment. Cyprus has a variety of environmental issues that need to be managed, many of which have an impact on tourism planning and development. These are climate change; air quality and air pollution, the availability of water resources and energy power to cope with existing and projected demand, and waste management for both locals and tourists. The government has already defined responses to these challenges, which will have a positive impact. The European Union has established carbon footprint reduction targets for 2020 and encourages the adoption of a sustainable planning. The integrated tourism development plans and subsequent masterplans for each major tourism area can have a positive impact on the island’s environmental credentials.
f.
Natura 2000 Cyprus has designated 40 Sites of Community Interest (SCI) and 30 Special Protected Areas (SPA) for inclusion in the Natura 2000 Network. This has enabled it to implement the European Union’s Habitat Directive 92/43/EC and the Birds Directive 2009/147/EC. New tourism development will undoubtedly consider the existing protected areas to avoid adding demand and stress to these areas. New tourism developments should incorporate environmental assessments to avoid encroaching on these protected areas. However, an efficient management of Natura 2000 sites will help to integrate them into the tourism product offer and become a distinctive asset for nature and rural tourists. The Green Sun Vacations will benefit from a well-cared environment with outstanding conditions.
1.2.2 Tourism urban development and landscape The landscape and urban environment in Cyprus is inconsistent. In some parts of the island it is evident that some effort has been made to arrange streets and roads; in other areas, an initial effort may have been made at first but it has not been managed properly and has since deteriorated. Regular maintenance of the urban environment is key to ensure that tourists and locals have a great perception of the Cypriot towns and villages. In the worst cases, there is clear evidence of what can only be described as visual pollution, and it tends to intensify. Some observations derived from THR’s visits that should primarily be addressed are: •
Sides and central reservations of roads – Cyprus has good quality and functional roads. A more intensive landscaping would add significant aesthetic appeal for the many tourists who use the road network. Tourists should be able to identify the Cypriot landscape along the road with native vegetation. Roundabouts and intersections could be decorated with seasonal flowers and local shrubs;
•
Large Format Promotional Signage – Whilst acknowledging that product vendors, particularly in the real estate sector, have a commercial need to promote their developments, the volume of billboards and signage in Cyprus is high, and varies in sizes and styles. It is recommended that over a period of time, the number of available
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advertising space is reduced, and the size and style of such panels is standardised. Directions to the main destinations and landmarks should be clearly indicated in Greek and English to allow tourists to navigate the system easily; •
Street Furniture – Giving their location, pieces of street furniture (particularly seats and litter bins) are susceptible to being damaged and degraded if there is no proper supervision, acquiring an overall un-kept appearance. Regular replacement with some modernisation of styles and materials would make a positive contribution. The use of recycled/recyclable materials from local manufacturers and designers will strengthen a local visual identity;
•
Promotional Signage in Clusters and Resorts – Tourism clusters can be aesthetically enhanced and respected more by customers when there is a more standardised approach and a more unified palette of colours used. A visit to the leading tourism clusters reveals a wide array of styles and colours, including extensive use of neon, none of which makes a positive contribution to defining a premium market positioning;
•
Maintenance of Permissible Signage – The volume, and poor maintenance, of signage can create ‘visual noise’ (chaos). This is evident in several locations around the island. It is recommended that closer monitoring is carried out by a relevant authority. Local authorities should create inventories of all existing signage and establish criteria to allow them to be placed only in designated spaces in the tourism areas;
•
Master Planning – Greater emphasis should be placed on the design and specification of landscape and urban environment for all projects. Urban sprawl and scattered tourism developments generate high infrastructure construction and maintenance costs. The future development should be done under a framework that incentivises concentration and sustainability.
1.2.3 Tourism accommodation At the end of 2015, based on CTO statistics, Cyprus had a total supply of 43.144 licensed tourist accommodation keys (rooms). A relatively high number of unlicensed keys also exist, numbering an approximate 5.000 ‘hotel’ category keys, plus an unspecified/unknown number of other accommodation type keys. Based on existing accommodation classification, and according to international standards, THR proposes a reclassification of the following typologies in order to comply with current tourism demands: Table 212. Tourism accommodation typologies Typology
Grading
1. Hotels & Apartments
Hotel
2. Inns (1+2 stars)
3. Special typologies
lodging
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3,4,5, and 5+ stars international criteria 1,2 stars, based on international criteria 3 levels, criteria to be developed
Specifications Hotels & Hotel Apartments Assumes capacity of 1,85 beds/key (average)
Current 1-2 star hotels that will no longer be considered “hotel”. Assumes capacity of 1,85 beds/key (average) Tourist villages, apartments, Mansions, Villas, motor homes, rural farms, etc. Assumes capacity of 3 beds/key (average)
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Typology
Grading
615
Specifications
4. Guest Houses, B&B
3 levels, criteria to be developed
Guest houses offer a dining service
5. Campsites, glamping
3 levels, criteria to be developed
Accepts some motor homes and bungalows
Assumes capacity of 1,85 beds/key (average)
Assumes capacity of 3 beds/parcel
Reflecting the upgrade to the premium destination strategy, the categories of some types of accommodation keys will vary to focus on higher quality and services. Table 213. Re-categorisation of Tourist Accommodation CTO Categories 2015 Not previously included by CTO
variance
New Categories Hotels - 5* Grand Luxury
Hotels - 5*
=
Hotels - 5*
Hotels - 4*
=
Hotels - 4
Hotels - 3*
=
Hotels - 3*
Hotels - 2*
Inns - Comfort
Hotels - 1*
Inns – Economy (Basic)
Hotel Apartments - A Class
Hotels - 4
Hotel Apartments - B Class
Hotels - 3*
Hotel Apartments - C Class
Hotels - 3*
Tourist Villages – A Class
Special Lodging
Tourist Villages – B Class
Special Lodging
Tourist Villas
Special Lodging
Tourist Apartments
Special Lodging
Furnished Apartments
Special Lodging
Traditional Buildings - Hotels
Guesthouses
Traditional Buildings – Hotel Apts
Guesthouses
Hotels without *
Guesthouses
Guesthouses
=
Guesthouses
Campsites
=
Campsites
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a.
616
Existing licensed supply in Cyprus Based on the published statistics and the reclassification recommended, existing tourism accommodation keys are distributed as follows: Table 214. Cyprus: Existing Tourist Accommodation 2015 Licensed Tourism Accommodation Keys Cyprus Hotels / Hotel Apartments 35.702 5* 6.251 (of which 166 5*GL) 4* 16.332 3* 13.119 Inns (former 1 & 2 star hotels) 2.486 Comfort (2-star) 1.960 Basic (Economy) 1-star 526 Special Lodging (Self Catering) 3.768 Guest Houses 859 Campsites 329 Total Keys 2015 – Licensed 43.144 (1) Market Positioning 3,7 Occupancy (gross %) 43% Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns.
By areas, the breakdown of existing accommodation is as follows: Table 215. Cyprus: Existing Tourist Accommodation 2015 – by Area Licensed Tourism Accommodation Keys Total Ammochostos 17.828 - Ayia Napa 9.327 - Paralimni 8.501 Larnaca 3.154 - City & Suburbs 2.891 - Mazotos & Coastal Area 263 Limassol 6.035 - City & Suburbs 5.549 - Pissouri – Avdimou 486 Pafos 13.432 - City & Suburbs 11.978 - Polis 1.563 - Akamas 71 Troodos Mountains 1.146 Nicosia 1.549 Total Keys 2015 – Licensed 43.144 Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2015 by area and type of establishment.
b.
Unlicensed accommodation supply Cyprus also has many unlicensed keys, which are understood to number 5.000 hotel and hotel apartment keys of varying classification. As these keys are not currently included in the official Updated version 23.03.2017
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statistics, they have been regarded as being in the â&#x20AC;&#x2DC;development pipelineâ&#x20AC;&#x2122;, and included in the total supply of keys required in 2030. At the next stage of the planning process, it will be necessary to make a detailed analysis of the locations and classification of the unlicensed keys (such as villas and apartments) so that they can be accurately added to the supply statistics in the relevant categories.
c.
Evolution of keys by district In the last 5 years, the number of available beds has decreased by 3%. Larnaca and Limassol are districts that have significantly decreased the number of beds by 7% and 13%. Only Nicosia experienced an increase during the period.
Ammochostos Paralimni Ayia Napa Larnaca Limassol Pafos & Polis Nicosia Hill Resorts Total
Table 216. Accommodation evolution by district (beds) 2011 2012 2013 2014 34.893 34.556 35.055 35.029 14.914 14.567 14.709 14.683 19.979 19.989 20.346 20.346 6.367 6.176 5.972 6.057 13.193 12.984 13.032 11.419 27.837 28.116 27.866 28.388 2.467 2.576 2.860 2.860 2.325 2.337 2.317 2.252 87.082 86.745 87.102 86.005
2015 34.892 14.702 20.190 5.896 11.419 27.332 2.866 2.124 84.529
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2011, 2012, 2013, 2014 & 2015 by area and type of establishment.
The available beds in Hotels with stars have increased by 2%; most of the categories have added new beds in all categories, however the biggest increase (6%) has been in 3-stars and the biggest drop (10%) in 1-star. Hotel Apartments/Tourists Villages have decreased by 7% with a reduction in almost all categories. Thus, there has not been a change in the market positioning that has remained stable at 3,7. A premium demand strategy will only be achieved by increasing the market positioning with new hotel units and upgrades. Table 217. Accommodation evolution by typology (beds) Hotels with Stars - 5-star Hotel - 4-star Hotel - 3-star Hotel - 2-star Hotel - 1-star Hotel Hotel Apt./Tourist Villages - Deluxe Apartment - A-class Apartment - B-class Apartment - C-class Apartment - Tourist Village Others
2011 52.486 11.464 21.091 15.254 3.592 1.085 24.906 114 9.274 7.430 1.288 6.800 9.690
2012 52.463 11.464 21.279 14.930 3.739 1.051 24.472 114 9.230 7.108 1.220 6.800 9.810
2013 53.675 11.464 21.629 15.861 3.691 1.030 23.950 0 8.880 6.984 1.274 6.812 9.477
2014 54.239 11.964 21.719 15.902 3.677 977 23.722 0 8.872 6.764 1.274 6.812 8.044
2015 53.633 11.562 21.342 16.128 3.626 975 23.142 0 8.872 6.764 1.378 6.128 7.754
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2011, 2012, 2013, 2014 & 2015 by area and type of establishment. Updated version 23.03.2017
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618
Existing licensed supply in Ammochostos Table 218. Ammochostos: Existing Tourist Accommodation 2015 Licensed Tourism Ammochostos (2) Ayia Napa Paralimni Accommodation Keys Hotels / Hotel Apartments 15.644 8.031 7.613 - 5*
1.346
920
426
- 4*
7.121
2.773
4.348
- 3*
7.177
4.338
2.839
Inns (former 1 & 2 star hotels)
518
463
55
- Comfort (2-star)
493
438
55
- Basic (Economy) 1-star
25
24
0
1.661
830
830
6
3
3
17.828
9.327
8.501
41,3%
21,6%
19,7%
3,6 51%
3,5 51%
3,7 51%
Special Catering)
Lodging
(Self
Guest Houses Total Keys 2015 - Licensed National Share district/cluster Market Positioning (1) Occupancy (gross %)
by
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns (2) Paralimni and Ayia Napa distribution for 2015 assumes that the distribution has remained constant since 2012 (the last year in which Paralimni and Ayia Napa data was published separately).
e.
Existing licensed supply in Larnaca Table 219. Larnaca: Existing Tourist Accommodation 2015 Licensed Tourism Larnaca (2) Larnaca City Accommodation Keys Hotels / Hotel Apartments 2.356 2.140
Mazotos 215
- 5*
209
209
0
- 4*
1.339
1.205
134
- 3*
808
727
81
Inns (former 1 & 2 star hotels)
479
431
48
- Comfort (2-star)
455
409
46
- Basic (Economy) 1-star
24
22
2
53
53
0
266
266
0
3.154
2.891
263
7,3%
6,7%
0,6%
3,4 39%
3,5 39%
3,3
Special Catering)
Lodging
(Self
Guest Houses Total Keys 2015 - Licensed National Share district/cluster Market Positioning (1) Occupancy (gross %)
by
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns (2) A research has been done to identify existing hotels in Mazotos to be deducted from Larnaca data. Updated version 23.03.2017
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619
Existing licensed supply in Limassol Table 220. Limassol: Existing Tourist Accommodation 2015 Licensed Tourism Limassol (2) Limassol City Accommodation Keys Hotels / Hotel Apartments 5.480 5.021
Pissouri 459
- 5*
1.836
1.741
95
- 4*
1.708
1.537
171
- 3*
1.937
1.744
193
Inns (former 1 & 2 star hotels)
268
241
27
- Comfort (2-star)
225
202
23
- Basic (Economy) 1-star
44
39
4
Special Lodging
221
221
0
Guest Houses Total Keys 2015 - Licensed National Share district/cluster Market Positioning (1) Occupancy (gross %)
by
65
65
0
6.035
5.549
486
14,0%
12,9%
1,1%
3,9 33%
3,9 33%
3,7
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns (2) A research has been done to identify existing hotels in Pissouri to be deducted from Limassol data.
g.
Existing licensed supply in Pafos Table 221. Pafos: Existing Tourist Accommodation 2015 Licensed Tourism Pafos (2) Pafos Town Polis Accommodation Keys Hotels / Hotel Apartments 10.721 9.697 984 - 5* Grand Luxury
Kathikas 40
166
0
166
0
- 5*
2.376
2.376
0
0
- 4*
5.712
5.141
571
0
- 3*
2.467
2.180
247
40
Inns (former 1 & 2 star hotels)
390
351
16
23
- Comfort (2-star)
227
204
0
23
- Basic (Economy) 1-star
163
147
16
0
1.830
1.464
366
0
162
122
32
8
329 13.432
164 11.798
165 1.563
0 71
31,1%
27,3%
3,6%
0,2%
3,8 43%
3,9 43%
3,0 43%
2,6
Special Lodging Guest Houses Campsites Total Keys 2015 - Licensed National Share by district/cluster Market Positioning (1) Occupancy (gross %)
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns (2) A research has been done to identify existing hotels in Polis and Akamas to be deducted from Pafos.
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h.
620
Existing licensed supply in the Mountains Table 222. Troodos mountains: existing tourist accommodation 2015 Licensed Tourism Accommodation Keys Hotels / Hotel Apartments
Troodos mountains 454
- 5*
0
- 4*
150
- 3*
304
Inns (former 1 & 2 star hotels)
342
- Comfort (2-star)
188
- Basic (Economy) 1-star
154
Special Lodging (Self Catering) Guest Houses
4 346
Total Keys 2015 â&#x20AC;&#x201C; Licensed National Share by district/cluster Market Positioning (1) Occupancy (gross %)
1.146 2,7% 2,6 17%
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31 st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns
i.
Existing licensed supply in Nicosia Table 223. Nicosia: Existing Tourist Accommodation 2015 Licensed Tourism Accommodation Keys
Nicosia
Hotels / Hotel Apartments
1.046
- 5*
318
- 4*
302
- 3*
426
Inns (former 1 & 2 star hotels)
489
- Comfort (2-star)
372
- Basic (Economy) 1-star
117
Special Lodging (Self Catering)
0
Guest Houses
14
Total Keys 2015 - Licensed National Share by district/cluster Market Positioning (1) Occupancy (gross %)
1.549 3,6% 3,2 26%
Source: Cyprus Tourism Organisation (CTO), Units and beds in operation at 31st December 2015 by area and type of establishment. (1) Market positioning calculated from weighting stars from Hotels/Hotel Apartments & Inns
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1.2.4 Infrastructure Cyprus has generally good infrastructure throughout the island, and has invested heavily over the years in trying to ensure that the needs of both residents and tourists are met. Strands of the National Reform Programme 2015 for Smart, Sustainable and Inclusive Growth identify further enhancements that are needed and will be implemented. These will all benefit tourism development as much as other sectors of the economy. Figure 232. Main infrastructure installations
Source: Elaborated from geographic data provided by Government of Cyprus
a.
Electricity The Electricity Authority of Cyprus (EAC) generates power exclusively on imported fuels, mainly crude oil. Currently, the EAC has three power stations with a total installed capacity of 1.478 MW. These are situated at Vasilikos, Dhekelia, and Moni as illustrated in the map. The Government already incentivises power generated from renewable resources (RES). These measures should become an integral planning requirement of future tourist development because of the benefits to the islandâ&#x20AC;&#x2122;s targets for reducing energy consumption from traditional sources and reducing emissions.
b.
Gas Cyprus does not currently have a distribution network of natural gas. It is understood that exploration of the Aphrodite Gas Field has proven positive and this may become an alternative fuel source at some time in the future.
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c.
622
Water A large proportion of Cyprus’s water supply comes from desalination. The island’s fifth desalination plant, which has the capacity to produce up to 40.000 cubic metres of desalinated potable water daily, opened in August 2013. Along with the upgrading of existing plants carried out previously, the new plant has brought production capacity up to 220.000 cubic metres per day (8,1 million cubic metres per annum), and met the requirements of the relevant EU directive on good quality potable water. Cyprus also has a supply of conventional water, although insufficient to meet the needs of the island. The island has over 100 dams, 56 of which are included in the Register of the International Committee on Large Dams (ICOLD), of which Cyprus has been a member since 1969. The total capacity of all the dams is approx. 327,5 million cubic metres of water. In 2013, tourism accounted for approximately 5% of Cyprus’s potable water demand 69. The projected increase in the number of tourists by 2030 will see potable water demand more than double within the next 20 years. The calculation of accurate demand estimates will be needed at the next stage of the development planning process. Cyprus has also placed increasingly greater emphasis on water recycling, and based on a 2012 study entitled ‘Water Reuse in Cyprus’70, has set an ambitious target to increase the volume of treated wastewater to 85 Mm3 per annum by 2025. This water is used primarily for irrigation purposes, some of which are tourist facilities such as golf courses and landscaped garden areas. The planning and development of large tourist resorts makes the recycling and use of treated wastewater a very practical and beneficial aspect of development, and should, where possible, be made a requirement of the development planning process.
d.
Solid Waste Cyprus produces one of the highest levels of solid waste per citizen in the EU at 626 kg/year compared to the 475kg/year EU average. The government is very aware of its EU compliance obligations and a new waste management plan was built/under construction during 2015. Part of the solution lies in increasing the amount of recycling, and it is assumed that such measures are integrated into the waste management plan. To date, it appears that Cyprus has been unable to make significant progress in this regard. Data published by Green Dot Cyprus shows that the volume of recycled materials has remained stable since 2010. For the benefit of the tourism development plan, developers should be required to take some responsibility for this by ensuring that they have site-specific waste management plans in place, and that the need for and benefits of managing waste, and recycling, are conveyed to both tourists and industry service providers. Government, at national and local level, need to ensure that it provides the necessary services and facilities so that both the resident and tourist population can play a prominent part in managing the waste situation.
Source: Republic of Cyprus – Water Development Department The accredited authors of the study into water reuse in Cyprus are Iacovos Papaiacovou and Constantia Achileos, MSc (Sewerage Board of Limassol Amathus); Ioanna Ioannidou, MSc (Larnaca Sewerage and Drainage Board); Alexia Panayi, MBA (Water Development Department); Christian Kazner, Dr. Ing. (University of Technology Sydney); and Rita Hochstrat (University of Applied Sciences Northwestern Switzerland) 69 70
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623
Communications High-speed communications are an essential part of everyday life for many people around the world. Tourists nowadays demand the same high speed and reliability whilst on holiday or travelling as they do at any other time. According to Internet World Stats (IWS), as of December 2014, Cyprus had 804.306 Internet users, representing 95,0% of the population. This is a notable increase from 2012 when the number of users was believed to be 694.223 (61,0% of the population). The availability of high-speed, reliable Internet needs to be ensured for all tourism developments in all parts of the island. At this moment, it is understood that access and reliability is lagging in rural areas, but that this is also being addressed as part of the National Reform Programme 2015.
2.
Recommendations and guiding principles on planning and development 50 years+ of global tourism growth has proven that unplanned, and chaotic planning and development leads destinations into stagnation, and ultimately into decline. This increases the potential risks to the natural environment and cultural heritage, as well as unnecessarily increasing economic costs. Well-planned, orderly, and controlled development can optimise the benefits, and minimise the potential adverse effects. The strategy has identified current weaknesses and reasons for low performance of tourism in Cyprus. In order to overcome the current situation, the integrated development plans that will be implemented from now on should focus on three key development guidelines. They will optimise the process and avoid the potential negative consequences of disparate growth. Thus, Cyprus will become a competitive destination maximising its strengths and achieving a successful premium demand strategy. Figure 233. Key Development Guidelines
Three Key Development Guidelines
Planning Framework & Development Principles
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Hospitality Development
Mixed Use Resort Development
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624
Planning concepts The planning framework that Cyprus must adopt for tourism development aspiring to ensure long-term benefits, and sustainability, is comprised of 5 concepts. These concepts are all closely related - as tourism sites and attractions will be attached to clusters as well as to resorts and touristic zones of national interest, where the clusters will be connected to each other through itineraries. Figure 234. Five Planning Concepts
A brief description of each planning framework element is provided below. Figure 235. Relationship of Planning Concepts
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Figure 236. Graphical explanation of the interrelation of planning concepts
a.
Tourism sites and attractions Cyprus should place tourism sites and attractions as the core of its integrated development planning. Activities and tourism experiences should be developed around historic, natural and or cultural elements or events (e.g. natural scenery, flora and fauna, historical sites, heritage, festivals, sports events, etc.) Attractions are classified as: •
“Endowed” (natural, heritage, etc.) and;
•
“Man-made” (festivals, events, entertainment, shopping, etc.)
Tourism Development Masterplans should enhance tourism sites, small areas composed of one or more tourist attractions, as they will become the main factor that will draw visitors to a specific cluster. These sites should be marketed as ‘places to visit’ and they provide the base for the design of experiential products, and are therefore vital to satisfying the travel needs of tourists.
b.
Resorts Cyprus should adopt the resorts as master planned spaces of a medium-boutique size offering a combination of hotels, leisure facilities and various other tourism related services. In an area, several resorts can be combined and share common supporting infrastructures and public services. Most of the global growth of the tourism offer currently takes place in the form of resorts and Cyprus should adhere to it. The word resort is widely used and it often has different meanings. The resort is an area for tourism and leisure that is characterised by 7 attributes: •
It is an attractive location that counts on resources and natural, historical, cultural, etc. tourism attractions. These revolve around a clear concept that gives them character.
•
It is designed so that clients can enjoy a variety of activities, experiences, and leisure services (shopping, restaurants, entertainment, etc.)
•
The resort has an element akin to a town centre which serves as the focus point of the resort and that people visit often.
•
It offers a relative variety of accommodation types and categories. It responds to a Master Plan that points to the use of land, each items location, urban ratios, transport circulation, aesthetic rules, landscaping, etc.
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•
It is managed by an "authority" (Resort Management Agency) that entirely manages the essential elements for the resorts proper functioning: maintenance, security, housekeeping, branding, marketing, activities and experience's management, quality controls, etc.
•
Increasingly, mixed-used resorts are put together. These include first and second residences, commercial offer, professional spaces, etc.
In regards to the above-explained definition we would like to highlight three points: •
Size and Master Plan. The resort has a certain size (normally more than 300 keys up to 20.000) and responds to a Master Plan. A little hotel that owns a tennis court is not a resort; It is a hotel
•
Diverse leisure offer. A resort is a leisure space that offers attractions, services, experiences, and holiday accommodation. Very often, resorts are of mixed-use (first and second residences, professional spaces, etc.)
•
Central Management. A resort is subject to an authority that manages it: repairs, quality, scheduling, experiences, marketing, etc.
A boutique resort is a small resort, usually with less than 800 keys. The advantage is that they are not "mega-resorts" (Cancun, Varadero, etc.). The disadvantage is that its small size makes it difficult, financially speaking, for the resort to have a wide variety of activities, experiences, and associated equipment available. In this sense, boutique resorts bring more value than large resorts thanks to their "non-massification", but they contribute less value to the result of a smaller diversity of activities and experiences. The latter, however, can be alleviated by developing clusters of boutique resorts that share a large part of the experiential offer that they couldn’t afford by standing alone. This is the model THR recommends, especially for the Touristic Zones of National Interest (TZNI).
c.
Tourism Zones of National Interest (TZNI) THR recommends that one Tourism Zone of National Interest (TZNI) is created in Cyprus. A primary location is proposed as well as several smaller alternatives. Tourism Zones of National Interest (TZNIs) are areas (200 – 2.000 hectares) comprising various resorts that share key infrastructure and equipment (access roads, main power, water, and communications supply). These areas form tourism destinations in themselves and usually have more than 6.000 keys. The area will contain medium and boutique size resorts integrated with the existing urban areas. TZNIs benefit from important legal, economic, and financial benefits within a regulatory framework specific to the location. Important note regards the degree to which Resorts and TZNIs will contribute to the alleviation of seasonality There is only one way for Cyprus to reduce its seasonality: to offer, in the Pre and Post season, more value to more types of tourists. From this perspective, a resort (let alone a TZNI -Touristic Zone of National Interest-, which is in fact a cluster of coordinated resorts) has much more capability to generate value than individual hotels. Indeed: •
CVP. A resort offers a wide variety of facilities, equipment, activities, and experiences capable of attracting types of customers other than the sun and beach segment: sports facilities, wellness centre, meeting facilities, etc.
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•
Marketing. Due to their size and volume of business, resorts may have bigger marketing departments and budgets that are, in principle, more effective than those of an individual hotel when it comes to attracting pre and post season demand.
•
The new "Shared Ownership" formulas such as "Fractionals" or "Destination Clubs" are promoting greater use of "hot beds" throughout the year.
Lastly, a TZNI composed by 4-8 resorts, represents a high value added proposition for the market due to its diversity of infrastructures, facilities, services, activities, and experiences, which are far superior to what an independent hotel has to offer. And this diverse offer is more capable of attracting tourists during Pre and Post season.
d.
Clusters The integrated development plan proposes to focus most of future Cyprus tourism development in selected clusters, based on consideration of their touristic attractiveness, and current and future competitiveness. Clusters are touristic areas that contain a varied and attractive portfolio of accommodation, tourism experiences, supporting services, infrastructure, and equipment. They benefit from integrated management and efficient operation. Each cluster has a designated ‘tourism centre’ - the focal point that concentrates many tourism services and facilities. In many cases, the tourism centre (town centre) is an existing village or town. The tourism centre is the gathering point and ‘base camp’ for excursions and activities around the area. From a tourism planning perspective, concentration (clustering) is more sustainable, and preferable to dispersion. Generally, a ratio of 80/20 in favour of concentration is realistic and appropriate, and can be applied in Cyprus.
e.
Itineraries Itineraries in Cyprus should have a central theme (history, nature, heritage, wine, sport etc.) and help destinations to increase the number of visitors, bringing attractions towards a common goal and extending the length of visitors’ stays. A tourist itinerary (or circuit) is defined as a route connecting clusters and sites. It connects various attractions in different areas, cities, or villages, within a fair proximity, so that tourists can cover them in a sequence.
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628
Guiding principles to follow Tourism development planning in Cyprus needs to be formulated on a set of principles that guide the different strategic and planning decisions. These are categorised into: •
General Principles;
•
Coastal Development Principles;
•
Rural Development Principles;
•
Other Planning Considerations.
All the groups of principles have been considered in the integrated development plan, with detailed explanation as required.
a.
General principles The general principles are intended to guide the strategy and development plan, to be used by decision-makers at the highest levels of government and tourism.
b.
•
Recognise the need for action;
•
Support the elements of tourism that require special care;
•
Establish binding development objectives;
•
Retain tight control over protected lands - follow a pro-active policy towards its management and use;
•
Strengthen agriculture and forestry through tourism, and accept them as partners in the tourism development process;
•
Maintain and preserve cultural traditions;
•
Integrate the knowledge of tourism industry stakeholders into the decision-making and management system.
Coastal development principles As an island, Cyprus has established itself as destination that utilises its coastal resources and favourable climate to optimise its attractiveness to tourists. It has established itself as, primarily, a sun and beach tourism destination. Coastal tourism development presents both challenges and opportunities. The coast is a dynamic place and its dynamism makes it susceptible to stresses and changes in many ways. Many of these are climatic and environmental, but social and economic changes also bring stresses to coastal areas. The development plan follows the principles for Coastal Development recommended by Urban Land Institute (ULI)71. These principles have been based on the concept of shared values – protecting habitat while preserving public open space and maintaining access for everyone. •
Enhance value by protecting and conserving natural systems.
•
Identify natural hazards and reduce vulnerability.
The Urban Land Institute (ULI), founded in 1936 and with more than 38,000 members, is a non-profit research and education organisation with offices in Washington, D.C., Hong Kong, and London. Its stated mission is "to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide". ULI advocates progressive development, conducting research, and education in topics such as sustainability, smart growth, compact development, place making, and workforce housing. 71
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c.
•
Apply comprehensive assessments to the region and site.
•
Lower risk by exceeding standards for siting and construction.
•
Adopt successful practices from dynamic coastal conditions.
•
Use market-based Incentives to encourage appropriate development.
•
Address social and economic equity concerns.
•
Balance the public’s right of access and use with private property rights.
•
Protect fragile water resources on the coast.
•
Commit to stewardship that will sustain coastal areas.
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Rural development principles Not all the new tourism development will be coastal as Government, and industry stakeholders, have expressed a desire to see that Cyprus’s tourism of the future is not perceived, and operated, as solely sun and beach, and THR is in total agreement with this. The island can offer interesting opportunities inland, especially in the mountains and lowlands. When connections are established with agriculture, viniculture, and rural life the scope of opportunity is enhanced. Rural development requires a slightly different approach, but one that still takes the fundamentals of sustainable planning into account. The following six guiding principles are recommended for the development of rural tourism.
d.
•
The development and promotion of tourist enjoyment of rural areas should be primarily aimed at those activities that draw on the countryside itself, i.e. its beauty, culture, history, wildlife, and agriculture.
•
Tourism development should assist conservation by bring new uses to historic buildings, supplementing the income of farmers and aiding reclamation of derelict or redundant land.
•
The planning, design, siting, and management of new tourist development should be in keeping with the landscape, and wherever possible should strive to enhance it.
•
Tourism development should support the rural economy whilst encouraging a wider geographical and temporal spread to avoid honeypot problems of damage through over-use and congestion.
•
Those who benefit from rural tourism should contribute to the conservation and enhancement of the countryside.
•
The tourist industry itself should seek to develop the public’s concern for the countryside, and understanding of environmental issues generally.
Other planning guidelines In addition to the principles specified in the above two sections, there are several other planning and development considerations that should be taken into account. •
Development planning (particularly of leisure and sporting activities, food & beverage outlets, and services) should consider and plan for the needs of the local and regional population as well as tourists. New developments should endeavour to encourage the local population to establish and operate new businesses, and to make use of the communal-type facilities and services;
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630
The pedestrian should be considered ahead of the vehicle user by: - ensuring that the design of internal resort roads does not encourage use by vehicles (other than the limited needs of service and emergency vehicles); - ensuring that adequate provision is made for vehicle parking, and providing internal transport systems that make using peripheral parking areas highly practical; - ensuring that development is sufficiently compacted so that the constant need for using motor vehicles is negated, and or that efficient public transport is readily available;
2.3
•
Green areas within resorts and clusters should embrace the traditions of Cypriot agriculture and incorporate food growing areas into soft landscape planning;
•
Signage (wayfinding & informational), particularly in rural areas, should be of a traditional design, with the use of neon being forbidden or strictly limited;
•
Furniture used on terraces, balconies and in other public/semi-public spaces should be consistent in style and materials, and in compliance with a pre-defined specification for individual locations;
•
Awnings, canopies, umbrellas, and other similar soft furnishings should be consistent in style and material, and in compliance with a specified palette of pre-defined colours for individual locations;
•
All developments should embrace the latest technology and innovation by providing its customers with services such as free Wi-Fi throughout, and battery charging points for PEDs (personal electronic devices).
Urban environment and landscaping The value, perceived and actual, of landscaping and the urban environment is unquestionable, and many research studies have been undertaken to analyse and measure it in different types of situations – tourist and urban, and all around the globe. The type of conclusions derived from various studies include:
a.
•
People of all social classes appreciates the landscape and urban environment;
•
Green space helps decrease air conditioning costs: According to the California Energy Commission, planting the correct trees, shrubs, vines, and groundcover can make buildings both warmer in winter and cooler in summer. The right type of tree is said to reduce summer cooling costs by 20 to 40%;72
•
The cooling effect of an average size lawn is said to equal to about 9 tons of air conditioning;
•
High quality landscaping increases real estate values - Consumers value a landscaped home more than 10% higher than its base price.73
Landscaping and tourism Cyprus must rely on quality landscaping as it enhances a tourist’s experience. Successful resort landscaping can be achieved with a five-component strategy as outlined below. •
72 73
Have a plan - It is important to consider how the resort (or cluster) communicates its brand to residents and visitors. If colours are an important part of the corporate image, thought
California Energy Commission; http://www.consumerenergycenter.org/home/outside Smart Money Magazine, March 3, 2003 issue
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must be given to what colours will best compliment it. The environment is also important and this is of significance given the climatic conditions of Cyprus. The answers to these questions will help establish a framework for how to best achieve the landscaping goals. Cost analysis and the implementation approach can then follow, as well as performance measures to make sure that the landscape plan remains on track and can continuously meet guest expectations. •
The balancing act - One of the things that make hotels and resorts great is that the guest experience can change with the seasons. Much like the personality of the resort, its landscape is seasonal and needs to adjust to changes throughout the year. To that end, it is important to develop a balanced landscape strategy to ensure that the grounds never appear to be in a state of seasonal transition. Minimise the impact of seasonal transitions by taking a gradual approach to change, and by continuously improving landscape maintenance practices.
•
Outdoor attractions – In Cyprus and other warm climates, it is very common for guests to stroll around a resort’s grounds. Many of the best hotels and resorts are paying special attention to how outdoor amenities such as gazebos, illuminated walkways and wellmanicured paths can enhance their guest experience. A special feature in a landscape, such as a butterfly garden, a sculpture garden or meditation space, or even a wedding garden, can become an attraction and greatly enhance a guest's relaxation experience.
•
Water features - Water is a dynamic element that can also greatly enhance the guest experience. Outdoors, water can be controlled to create a serene and peaceful environment. The sounds of water can be used to tune out background noises such as that generated by vehicles. Used in a lobby, water moving at a fast tempo can create a sense of excitement.
•
Assembling the right team - Outsourcing is quite often the best approach to enhancing the landscape. A suitably experienced landscape architect should be the first professional commissioned, and in conjunction with the cluster or resort management this team can develop a scheme that will achieve a cluster/resort’s objectives In the longer term, the execution of landscape maintenance should be given as much importance as other internal and external management functions. Strategically, the landscape will influence the guest's feeling about the resort over time. Financially these will have both long-term and short-term benefit, therefore implementing a comprehensive landscape program is a worthwhile investment.
The principles referred to are equally applicable to hotel owners, resort/destination management companies, tourism authorities and Government. The objective of this tourism development plan is not to specify a fully detailed set of criteria for landscape and urban environment enhancement, or in what areas. A rendering of the urban environment is provided in the following ‘before’ and ‘after’ photos and sketch enhancements. The photographs were taken by THR in April 2016 of Zygi Marina, the Road to Pissouri Bay and Omodos.
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Figure 237. Proposed urban environment enhancements Before
2.4
After
National Tourism Development Master Planning Cyprus should develop several Tourism Development Master Plans as a holistic, integrated approach to the planning and development of a tourism resort, TZNI or cluster. It is a detailed set of documents that cumulatively establishes a framework for the development and operation of a tourism asset, or a group of assets. The main contents that should be included in the Terms of Reference are: •
Market, Economic, Political & Social Analysis (national and specific to the location involved);
•
Business Models - for the different types of assets to be developed;
•
Development Program - specifying the number, scale, and scope of all features to be developed within the land area available;
•
Land Use, circulation, and Landscape Plans;
•
Infrastructure Network Plans;
•
Environmental Considerations;
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•
Architectural Drawings (at concept/preliminary level of detail) for respective assets;
•
Financial Feasibility Study;
•
Investment Plan - Identification and definition of opportunities and packages to be offered;
•
Branding, Sales & Marketing Plan;
•
Operational Management Strategy;
•
Implementation Program
A TDMP is NOT a design planning exercise carried out solely by planners and architects. TDMPs need a multi-disciplinary team of people to elaborate them, including Economists, Planners, Architects, Engineers, Marketers, and Financial/Investment Planners. A TDMP is required for all potential tourism development areas, irrespective of whether a Local Plan exists, or is being prepared. Local Plans should be used to supplement the details contained within the TDMPs and vice versa.
a.
TDMPs for Protected National Parks/Natural Areas This document refers to the need to create an ‘optimal level of tourism experience so that the natural environment can display its greatest assets for the benefit of tourism experience’. It is therefore recommended that, in addition to the TDMPs needed for the major tourism areas, separate TDMPs should be elaborated for the National Parks of Akamas, Troodos Mountains and Cape Greco. This supplementary effort should be carried out concurrently. These plans will be different to those referred to in the previous section, but are equally important to overall tourism development in Cyprus. They need to be focused, primarily, on the provision of facilities needed to satisfy the basic requirements of tourists, and most importantly, define the regulations that will strictly control what can and cannot be done in the best interests of the natural environment, and therefore create high levels of tourist value. Upon completion of this aspect of planning and development effort, the government should consider increasing the extent of the protected areas, and strengthening their level of protection. THR’s experience is that, in vulnerable areas, when opportunity exists for developers, development limits can be stretched and sometimes abused. When there is a firm refusal, and an area is strongly protected, the potential for undesirable development demands and abuse is diminished and ideally, negated.
b.
Designated Tourism Development Zones As highlighted previously, the zones designated for tourism development have partially contributed to an excessive historical amount of linear coastal development that should not be allowed to continue. Their existence implies that most tourism development will be permissible provided it complies with all other statutory and regulatory development criteria. The integrated tourism planning and development effort to 2030 should take control and precedence over these zones so that new, and upgrade development, can be properly organised. This may require redefining the boundaries of some tourism zones, and removing others completely.
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634
Land availability Land can be a contentious issue, particularly in small countries, and on islands, where limited availability places a premium on the value and status of ownership, well over and above financial value. There is limited availability of state owned land in major, and preferred, tourism development locations, so a large proportion of the development areas proposed in this document are situated on private land. The government therefore must establish a robust policy to manage this issue in an equitable manner, so that it never becomes problematic and delays or limits the tourism planning and development effort. Several potential compensatory scenarios could exist and therefore many potential solutions will be required: The main scenarios are likely to be: Scenario A • The private landowner who already has permission for a tourist development - (that they may have had for some time), but finds that the land is very close to, but outside, the tourist development area proposed in the tourist development plan (resort or tourism zone of national interest (TZNI)), and is therefore precluded from carrying out their proposed development. Scenario B • The private landowner who already has permission for a tourist development - on land that is inside the new tourism development area, but whose original development concept is different to what is now proposed and is incongruous with the proposed tourism development. Scenario C • The private landowner whose land is inside the earmarked tourism development area but not zoned for tourism development – but is within an area specified in the tourism development plan, with the owner having no desire or capability to become a tourism investor/developer. The recommendations to the government to handle Scenario A are as follows: A1 Government purchases the land from the existing owner at a rate that reflects the current value of the land, with development permission in its current location, and re-sells the land to another investor/developer. A2 Government initiates a ‘compulsory purchase’ program (at fair market values) and then sells to other investors/developers. A3 Government incentivises and assists private investors/developers to purchase land from the existing private landowner. A4 Government initiates a ‘land swap’ program whereby the existing landowner’s holding is ‘swapped’ with land of a similar size and value in the proposed resort/TZNI area, and the landowner becomes a shareholder in the resort company. This would not entitle the landowner to have the right to develop a similar project on the portion of land that he owns.
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The recommendations to government to handle Scenario B are as follows: B1. Government purchases the land from the existing owner as per A1. B2. Government initiates a ‘compulsory purchase’ program as per A2 B3 Government offers the landowner the opportunity to become a shareholder in the new resort/TZNI development company in its earliest stage. This can provide the landowner with more than one return on investment scenarios – the first being when the resort/TZNI site has been commercialised with the necessary enabling infrastructure its value will have been enhanced significantly, and an exit will be possible when individual plots within the area are sold to third parties - the second option is for the landowner to retain their share and benefit from the dividends that will be paid to shareholders from future profits. B4. The landowner is given an entitlement to extend his holding – and become a full participant in the new resort/TZNI in accordance with the tourism development master plan for the respective project. The recommendations to government to handle Scenario C are as follows: C1. Government purchases the land from the existing owner based on its existing zone / sector value. It is acknowledged that some enhancement may be required to persuade some owners. C2. Government initiates a ‘compulsory purchase’ program as per A2 and B2. C3. Government initiates a ‘land swap’ program whereby the existing landowner’s holding is ‘swapped’ with land in an alternative location, or equal zonal status. This may involve ‘enhancing’ (in terms of size or location) the alternative land given to landowners.
2.5 a.
Regulatory Framework Planning and development regulatory framework The regulatory framework that administers, processes, and controls planning and development in Cyprus has resulted in several serious issues that detract from the country’s investment credibility, and give the impression that little or no genuine control exists. It is therefore strongly recommended that the existing laws and regulations relating to planning and development are reviewed and redrafted to bring them up to date as per the needs of tourism, and other economic sectors. The legal and regulatory review should also include designated tourism development zones. Management of tourist resorts, TZNIs and clusters Cyprus’s existing tourism clusters, and the growth plans prescribed in this document, need to be very well organised and managed. Planning and developing the right tourism products in the right locations is only one part of attaining a tourism vision, and achieving commercial success for the sector at all levels. Tourists have become ever more demanding, and their demands and expectations need to be properly managed. This involves a wide variety of sophisticated tools and strategies.
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It is recommended that tourism clusters, and the specified new TZNI, should each have a dedicated management organisation to manage all its business affairs. For the purposes of this plan they are referred to as Cluster Management Organisations (CMOs). Their ultimate legal status will depend on what best suits local requirements and obligations; therefore, this function could be integrated within existing Regional Tourism Boards that are already managing tourism in each district. Addressing visual pollution & regulatory infringements Many references to the urban environment, and visual pollution, have been made in different sections of the supplementary development plan document. It is strongly recommended that visual pollution is one of the first issues to be addressed.
b.
Update of legal and regulatory framework It is strongly recommended that the existing laws and regulations relating to planning and development are reviewed and redrafted to bring them up to date as per the needs of tourism, and other economic sectors. The regulatory framework that administers, processes, and controls planning and development in Cyprus has resulted in many serious issues that detract from the country’s investment credibility, and give the impression that little or no genuine control exists. At best, it can be said that current legislation and regulations have loopholes that developers have found ways to exploit to the detriment of the country and of development integrity. At worst, the framework is dysfunctional. Issues such as a very high number of unlicensed tourist accommodation units, and the number of real estate assets without title deeds all point to the fact that, whatever the level and cause of the problems, there are problems. Failure to address such problems will work against the tourism planning and development strategy, and may even exacerbate existing problems. Review and redraft the planning and development legal and regulatory framework This process needs to be far reaching, and swift, so that an updated framework can be applied to the TDMPs referred to previously. The main areas that need to be addressed are: •
Development densities – defining a more standardised set of ratios/coefficients that are nationally consistent;
•
Process – The time required to obtain statutory permission for a development should be minimised to make it more attractive to developers/investors. The time value of the cost of the process should be considered. A ‘fast track’ process may even be required to stimulate tourism development and generate positive interaction from developers and investors;
•
Feasibility – It has become apparent that permission for a development, maybe even a large project, can be granted irrespective of whether the project is financially feasible. The result is that some projects may never be developed or projects that are not feasible will be built but fail in the longer term.
•
Control and accountability – It has also become apparent that some planning and development is managed at a national level, and the rest is managed at local municipality levels. The result is that the national planning authority is not familiar with all projects. This prompts the further need to establish a Central Planning Unit fully aware of all tourism planning and development at any moment in time. Without this type of approach, it will be impossible to properly manage the development elements of the tourism strategy.
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Realising the above, may also dictate some changes to Local Plans, Area Plans, and the Policy Statement for the Countryside. Define special conditions to be applied to tourism development projects For a sustainable development of the tourism sector, this must make a positive contribution to sustainability in Cyprus. All tourism development projects should be obligated to include sustainability measures in their development and operational plans. These should include as a minimum the usage of renewable energy sources (RES), the implementation of a strict solid waste management policy that includes maximising the volume of recycling, the encouragement of the usage of alternative means of transport, the usage of recycled water for irrigation of all soft landscapes, the installation of energy efficient lighting systems and integrate local products into architecture and landscaping. Review and redefine existing designated tourism development zones The national tourism planning effort must take precedence over all other tourism development. The existing designated tourism development zones will complicate the situation if kept in force as they are, and may make it more difficult to control tourism development both of the desired and undesired kind. As highlighted previously, the zones designated for tourism development have partially contributed to an excessive historical amount of linear coastal development that should not be allowed to continue. Their existence implies that most tourism development will be permissible provided it complies with all other statutory and regulatory development criteria. The integrated tourism planning and development effort to 2030 should take control and precedence over these zones so that new, and upgrade development, can be organised. This may require redefining the boundaries of some tourism zones, and removing others.
2.6
New Real Estate policy Residential real estate will become an integral element of the Cyprus tourism sector, particularly for foreigners (as second home buyers) who feel an affinity for the ambience, activity and experience offered by the destination. Tourist real estate is a more profitable real estate class than hospitality and services, and for this reason many investors/developers have a need to choose this class ahead of others to be able to make their investments sufficiently profitable.
a.
Real Estate in a planning framework Real estate (primary and second home) is an integral component of mixed-use resorts. As a more profitable asset class than hospitality and services, real estate can be the main investment attraction for many developers. For this reason, when mixed-use resorts are planned, and their portfolio of investment packages defined, the promoting company usually combines real estate with other less profitable assets, and imposes strict requirements on the phasing of real estate development to ensure that the entire resort develops with a balance of assets at all stages, and at an acceptable speed.
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Residential Real Estate development strategy The tourism development plan recommends a real estate policy that involves: •
Residential villas, townhouses, and apartments, in mixed-use resorts, sold as primary or second homes (holiday homes).
•
Serviced residences/units.
Serviced residences/units concept A serviced apartment or villa is a real estate property, located within walking distance of a hotel, whose owner / investor owner uses it a few days a year (20-60) and for the rest of the year the delivery to the hotel so that Is managed according to a scheme similar to the following: •
The transfer to the hotel for it to operate as a normal KEY (although 50-300 meters from the hotel): cleaning, room service, etc.
•
The hotel will offer to the serviced unit the same menu of services that it offers to the normal rooms of the hotel: cleaning, room service, etc.
•
Both the owner and the customers who rent the serviced unit are entitled to use all the facilities of the hotel: bars and restaurants, swimming pool, wellness centre, concierge service, laundry, etc.
•
The hotel will be responsible for repairs and maintenance of the serviced unit
•
The hotel will keep a percentage of the rent generated by the serviced unit (40-60%) and will deliver the rest to the owner.
Usually this rent is used by the landlord to pay part of the cost of his vacation (other than accommodation on his property that he obviously does not pay) and / or to pay local taxes and maintenance of the property.
Successful destinations This is a formula very used in great tourist destinations of: USA and Canada, Mexico, Caribbean, UK, Spain, etc. The key to the success of this formula is that the owner, during his vacation, does not have to do ANY TYPE OF WORK in the apartment or villa. Procedural issues & relevant owner-hotel agreements They have a relative complexity, but can be classified as follows: •
The properties must comply with the standards established by the hotel company that operates them.
•
More and more countries require the serviced units’ operator to be a reputed operator to ensure high levels of service, maintenance, and status. Groups like Mandarin, Kempinsky, Marriott, etc. Are large operators of serviced units and even collaborate in their sale to investors (30% commission).
•
Between the owner and the operator, a very detailed contract is signed which establishes, in detail, the rights, and obligations of both parties.
•
The critical points of the agreement usually contain the following: -
Rent that the operator agrees to get. Duration of the contract of operation Maintenance system conditions Hotel areas and services that can be accessed by the owner System of accountability to the owner by the operator
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Serviced unit & residences multipliers The strategy is based on a multiplier of the number of tourist accommodation keys developed in different types of clusters / tourism areas. This is illustrated below: Table 224. Serviced Unit & Residences Multipliers Tourist Accommodation Type Hotels and Hotel Apartments Resorts Urban Rural
Serviced Unit
Residential Unit
per developed key
1,00
2,00
0,50
1,00
0,25
0,50
per developed key
0,25
0,50
0,12
0,25
0,00
0,00
per developed key
0,25
0,50
0,00
0,00
0,00
0,00
per developed key
0,25
0,50
0,00
0,00
0,00
0,00
per developed key
0,25
0,50
0,00
0,00
0,00
0,00
Inns Resorts Urban Rural
Guest Houses Resorts Urban Rural
Campsites incl. Glamps Resorts Urban Rural
Special Lodging Resorts Urban Rural
As an example of the multiplier strategy, a developer who invests in the development of 150 hotel accommodation keys in a resort will be entitled to develop an additional 150 serviced unit keys. However, the total number of required serviced unitsâ&#x20AC;&#x2122; keys will be lower, considering that the calculations to obtain the total number of serviced units to be built considers a double occupancy rate of 2,2 for apartments and 3,1 for villas, and the fact that they will not be available to use during 60 days per year.
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The benefits The benefits of this approach to the Government of Cyprus are numerous and varied. Some examples are:
2.7
•
Real estate development is consolidated into tourist resorts, and not fragmented around the island;
•
Residences for sale as primary or second homes can only be built if investment is made into tourist accommodation development;
•
Real estate will be planned and designed in accordance with the master plans of the respective areas – thereby ensuring higher standards;
•
The rate at which tourist accommodation keys are required will impact on the rate at which associated real estate can be developed, therefore the build-up of surplus unsold stock is potentially eradicated.
Accompanying measures To achieve the previous actions, Cyprus Government and National Tourism Authorities need the following accompanying measures:
2.8
•
Setting up a Centralised Tourism Planning Organisation (CTPO): Tourism planning, on a national basis, will be the responsibility of the CTPO. This specially created organisation will also be responsible for monitoring tourism development growth, advising the government, and informing industry stakeholders accordingly.
•
Developing Regional Tourism Development Masterplans (TDMP): A TDMP is a holistic, integrated approach that establishes a framework for the development and operation of tourist resorts, TZNIs and clusters.
•
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 CTPO.
•
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.
Infrastructure/equipment requirements
a.
Utilities
a1.
Infrastructure/equipment needs The table below states the average consumption by the typical tourist that will be used to assess additional demand to be covered, because of the projected increase in tourist arrivals. Domestic tourism will not be considered to generate any additional utilities demand as their consumption patterns will be the same as when staying in their own home.
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Table 225. Utility Service Consumption by Typical Tourist Potable Water Litres / day
Waste Water % of Potable
Electricity kWh / day
Solid Waste Kg / day
200
80%
13,70
1,30
International
Source: EuroStat & Global Sources
Sizing of new infrastructures, at a national level should take both into account the annual demand of overnights as well as the peak demand. The maximum daily demand should be satisfied every day during the summer season. The projected increase in the number of tourist arrivals will put additional demands on utility services. Table 226. Estimated utilities demand from International tourists between 2015 and 2030 Tourists 2015 2020 2025 2030
a2.
2.659.406 2.992.129 3.721.454 4.631.817
Overnights
Potable Water
Waste Water
Electricity
Solid Waste
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
12.550 26.609 32.750 45.087
2.510.000 5.321.730 6.550.019 9.017.358
12.550 26.609 32.750 45.087
2.008.000 4.257.384 5.240.016 7.213.886
10.040 21.287 26.200 36.069
171.918 364.502 448.631 617.627
860 1.823 2.243 3.088
16.332 34.628 42.620 58.675
82 173 213 293
Investment required THR is aware that Cyprus is suffering from high-demand during the peak season; therefore, the increase of tourists by 2030 will contribute to increase the demand and infrastructures should be dimensioned accordingly in the framework of a National Economic and Infrastructure Development plan that lies out of the scope of current project. The proposed growth model establishes a different distribution of tourism arrivals throughout the country, therefore the planning departments of the ministries, departments, and agencies involved will have to coordinate and integrate the additional demand in the corresponding plans to develop additional capacity for utilities. Table 227. Utilities, responsible and planning framework Utility
Ministry/Department/Agency involved
Energy
Ministry of Energy
Water
Ministry of Agriculture, Natural Resources, and Environment – Water development Department
Waste Water Solid Waste Telecommunications
Sewerage Boards (Nicosia, Pafos, Larnaca, Limassol, etc.) Ministry of Agriculture, Natural Resources, and Environment Cyprus Telecommunications Authority
Planning framework • National Energy Efficiency Action Plan • •
Strategic Water Development Plan River Basin Management Plan
•
Local plans
•
National Waste Management Plan
•
National plans
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Table 228. Distribution of demand from International tourists in 2015 and 2030 Ammochostos Ayia Napa Paralimni Larnaca City & Suburbs Mazotos & Coast Limassol City & Suburbs Pissouri Omodos Pafos City & Suburbs Polis Akamas Troodos Mountains Nicosia
Share of arrivals 2015 31% 18% 13% 10% 10% 12% 12% 37% 36% 1% 4% 5%
Share of arrivals 20130 32% 17% 15% 10% 8% 2% 24% 11% 11% 2% 28% 23% 4% 1% 3% 3%
As a result of the proposed distribution, the locations of future utility plants and sub-stations should be studied in order to ensure an efficient use of existing and future financial resources. A more detailed plan of the tourism demand would remain in the scope of a Tourism Development Master Plan to be conducted for each region. New resort developments as well as accommodation facilities have associated an infrastructural budget per key that comprises from one side utilities and from the other public services. So that, for each new key to be built, its associated infrastructural requirements are considered. It covers the costs of deploying the network of utilities within the resort and the accommodation facilities as well as the contribution the developer has to make to the utility service provided to build additional lines/pipes and sub-stations to connect the property to the general network according to the demand requirements. The breakdown of the projected investment for the new utilities required is as follows: Table 229. Investment in new utilities 2017-2030 (Mill. Euro) Concept 1.Clusters & TZNIs infrastructure 1.2. Utilities
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
148
246
296
296
986
30%
2.2. Utilities
345
575
690
690
2.300
0%
Total (1+2)
493
821
986
986
3.286
9%
2. Resort infrastructure
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
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Concept 1.Clusters & TZNIs infrastructure 1.2. Utilities
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
643
% Public1
34
57
69
69
230
30%
2.2. Utilities
80
134
161
161
536
0%
Total (1+2)
114
191
230
230
766
9%
2. Resort infrastructure
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
The breakdown has been detailed by region in the following part of the present plan to provide an estimate of the associated costs based on the distribution of future demand and additional accommodation units to be built
b.
Infrastructure
b1.
Infrastructure/equipment needs For tourism to develop in Cyprus, new infrastructure and equipment will be required in order to be competitive in the future. Cyprus will face several challenges to ensure infrastructure service provision, as each touristic area will have different infrastructure requirements. The risk of having a limited capacity to fund and maintain core infrastructure creates the threat that without proper maintenance, infrastructure assets will have a short life and considerable investment will end up being required to re-build them. The current plan specifies, at a high level, the needs of transportation infrastructure as well as tourism services, and potential improvements to the built environment.
b2.
Investment required The investment for infrastructures and equipment is dimensioned considering a need for additional infrastructures and the improvement and upgrading of existing ones. Table 231. Investment in new infrastructures, 2017-2030 (Mill. Euro) Concept 1.Clusters & TZNIs infrastructure 1.1 Transportation & Services
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
246
411
493
493
1.643
25%
2.1. Transportation & Services
197
329
394
394
1.314
0%
Total (1+2)
443
740
887
887
2.957
14%
2. Resort infrastructure
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
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Table 232. Investment to improve current infrastructure,2017-2030 (Million Euro) Concept 1.Clusters & TZNIs infrastructure 1.1 Transportation & Services
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
57
96
115
115
383
25%
46
77
92
92
306
0%
2. Resort infrastructure 2.1. Transportation & Services Total (1+2)
103
173
207
207
689
14%
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
The investment for new public services such as hospitals, security, etc. is dimensioned considering a need for additional services and the improvement and upgrading of existing ones. Table 233. Investment in new public services 2017-2030 (Mill. Euro) Concept 1.Clusters & TZNIs infrastructure
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
1.3. Public services
49
82
99
99
329
80%
Total (1+2)
49
82
99
99
329
80%
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
Table 234. Investment to improve current public services 2017-2030 (Million Euro) Concept 1.Clusters & TZNIs infrastructure
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
1.3. Public services
11
19
23
23
77
80%
Total (1+2)
11
19
23
23
77
80%
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
c.
Air infrastructure
c1.
Infrastructure/equipment needs Air capacity is crucial for the island economy, particularly because it relies heavily on international trade, global business, and tourism. â&#x20AC;˘
Larnaca airport terminal building was inaugurated in November 2009 and covers an area of 100.000 m2, which has the capacity in serving 7.5 million passengers per year.
â&#x20AC;˘
Pafos airport new terminal building was inaugurated in November 2008 and covers an area of 20.000 m2s, which has the capacity in serving 2.7 million passengers per year.
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645
Investment required Existing airports in Larnaca and Pafos have enough capacity to handle increased demand as the strategy intends to increase significantly demand in pre and post season, compared to the increase on the peak season.
d.
Road infrastructure
d1.
Infrastructure/equipment needs Cyprus has a dense road-network. The density of motorways in Cyprus (28km/1000km²) is twice as high as the EU-25 average and the highest among the new member states.
d2.
•
Paralimni and Ayia Napa are well connected to the rest of the island through the motorway system. Although their location at the end of the island provides few alternatives to create itineraries except from going along the coastline.
•
The suggested potential location at McKenzie Beach is adjacent to the existing road network, and therefore there should be no road investment implications on the government.
•
The suggested location at Salt Lake has an existing access road that will need to be upgraded to a modern specification single carriageway. The cost of this road upgrade will be subject to negotiation and agreement between government and the respective investor(s)/developer(s).
•
The cities of Larnaca, Limassol, Nicosia, and Pafos, have an extensive road network, and therefore it is not considered that any new road investment will be necessary to accommodate new tourist accommodation or tourism services development.
•
Pafos is connected to the motorway network, therefore it will benefit from the extension of the motorway until Polis contributing to reduce travel times.
•
Polis is the only tourist area that has not a direct motorway to access it. The A7 motorway is planned to be performed as a PPP project and will significantly reduce the number of accidents and congestion in the current primary road. The new infrastructure will represent a high investment due to the complexity of the construction works, as it will include several tunnels and bridges. THR does not see that tourism should be the contributor to the construction and has not considered its cost in the Spatial Development Plan.
•
The development in Pissouri area has a road network that is adequate for the current level of use by residents and tourists. The new tourism development will demand that some new roads are built, and existing roads are upgraded. It is estimated that approximately 7 kilometres of new and or upgraded road development will be required.
•
At a national level, THR has found that a motorway connecting Limassol and Platres is currently in a preliminary design, if it finally goes forward, it will help to reduce the travel time from Omodos to the coastal motorways.
•
No major additional new, or upgrades to existing road network in the Mountain areas are foreseen. However, they should be considered and planned in the context of a specific urban and tourism planning for the area.
Investment required The suggested potential coastal locations are all adjacent to the existing road network, and therefore there should be no road investment implications on the government. The lower range road requirements of specific developments cannot be identified until master planning
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of the respective areas has been carried out. All other more ‘internal’ roads should be the development responsibility of the respective investors/developers.
e.
Tourism services
e1.
Infrastructure/equipment needs The tourism services are key to provide an attractive environment for tourists. THR has assessed in all destinations based on first-hand experience the efforts to be done to improve and enhance the services in order to attract a Premium demand. The following items should be the focus of attention.
e2.
•
Accommodation: the current positioning is oriented to World Average or Standard tourism demand, if Cyprus aims to attract Premium demand; in some areas, hotels are old and require upgrading.
•
Retail: tourists demand a diverse range of retail outlets, offering not only local and traditional products but also attractive pedestrian areas with international brands. The quality of hotels is good but services offered outside the hotels are at a lower level.
•
Leisure: Tourists and Tour operators demand a diversified offer that includes a variety of product levels and alternatives.
•
Public Transport: the existence of an effective and efficient public transport for tourists to move along the cities and the island can contribute to alleviate congestion in touristic centres and reduce dependency of private cars.
•
Experiential System: Cyprus already attracts sufficient visitor volume from Sun & Beach Tourism and this should remain a priority to maintain competitiveness. However, there is a need to offer a more traditional tourist experience. Future attractiveness of Cyprus as a destination will depend of the development of a strong experiential system in major tourism areas
•
Gastronomy: Cyprus has a latent potential to develop gastronomy. Several areas have local products to be enhanced and promoted as unique experiences.
•
Tourist Information, Interpretation Centres, Tour Guides & Attractions Personnel: Major tourism attraction sites require a powerful tourism experience that can only be provided through modern and renowned interpretation centres that provide valuable information and allow to develop edutainment opportunities.
•
Destination Management Companies: Local tourism enterprises and businesses are currently under-pricing their products and reducing product quality. This also creates a sustainability issue as profits are shrinking. There is a need to create a strong and competitive product.
Investment required A more detailed plan of the tourism services to be developed would remain in the scope of a Tourism Development Master Plan to be conducted for each region.
f.
Improvements to the built environment
f1.
Infrastructure/equipment needs The urban environment in all destinations has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Effort needed graded from 1 (less) to 5 (more
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•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning, which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
Investment required A more detailed plan of the needs to improve the built environment would remain in the scope of a Tourism Development Master Plan to be conducted for each region.
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Recommendations on growth model
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Projections
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The formulation of the integrated development plan has been based on growth and location. The growth projection modelling has determined that tourism in Cyprus can grow to 6.214 million tourists by 2030 following the premium destination strategy. Table 235. Cyprus: Projected Growth in Tourism Arrivals to 2030 Purpose of Visit
2020
2025
2030
International tourists
3.132.201
3.895.736
4.848.804
- Pleasure
2.560.536
3.227.784
4.062.143
- Business
163.511
206.120
259.401
- VFR
268.082
287.549
310.274
- Day visitors
140.072
174.282
216.987
1.092.565
1.274.495
1.365.611
Domestic tourists Total tourists
4.224.766
5.170.231
6.214.415
The projected growth dictates that the supply of accommodation keys also needs to grow. On a national level, the number of keys needs to increase to 77.094. The table below illustrates a proposed breakdown by type and quality level to enhance the market position of each location, and also at national level. Table 236. Cyprus: Projected Tourist Accommodation 2030 Licensed Tourism Accommodation Keys
Cyprus
a. Hotels / Hotel Apartments (1)
55.777
- 5* Grand Luxury
6.361
- 5*
19.007
- 4*
19.618
- 3*
10.791
b. Inns (previously 1 & 2 star hotels) - Comfort (2-star) - Basic (Economy) 1-star
3.075 2.552 523
c. Special Lodging (Self Catering)
4.196
d. Guest Houses
3.267
e. Campsites
982
f. Serviced Units
9.797
Total Keys â&#x20AC;&#x201C; Licensed (a+b+c+d+e)
77.094
Market Positioning
4,3
Occupancy
63%
Note
(1):
Includes unlicensed keys (5.000 keys)
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This additional development must be sustainable, therefore very important questions need to be answered, such as: â&#x20AC;˘
How to grow;
â&#x20AC;˘
Where to grow;
â&#x20AC;˘
At what speed to grow.
How to grow tourism supply involves both accommodation keys, and products and services that will provide tourists with activities and experiences. The plan started with detailed analysis of the existing supply of tourist accommodation in Cyprus, followed by the factors influencing and facilitating projected growth, and concluded with defining the most effective ways in which the planning and development environment can be improved to make it attractive to investors/developers, to stakeholders already in the industry, and therefore ultimately to the end user (tourists).
a.
Tourist accommodation New tourist accommodation is strongly recommended to be focused on developing most of the new supply in mixed-use resorts, and by refurbishing and upgrading existing assets. New mixed-use resorts should be within existing tourist clusters or part of a new Tourism Zone of National Interest (TZNI). Asset enhancement will make a great impact on elevating market position when they are in the existing clusters. However, it is probable that there may be owners who wish to avail of the opportunities presented by the plan whose assets are in other areas. To elevate the market positioning of the clusters in Cyprus this will involve developing a greater number of higher quality facilities and to incentivise the upgrade of non-attractive lower quality facilities that could benefit from an increase of tourist arrivals.
b.
Services, activities, and experiences As by composition mixed-use resorts provide the perfect stage for a wide variety of activities and experience that optimise the customer value proposition, they will be the main development approach for tourism accommodation. Added to the existing supply of services, activities, and experiences, (and those in the development pipeline), Cyprus will be able to move towards a product offer that is much more diverse than the current one, which is, or at least it is perceived to be, primarily focused on sun and beach.
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Tourism development pipeline Numerous development projects exist at different stages of planning and construction. Some of these have been in the pipeline for some years and stalled for a variety of reasons, the main one being the island’s financial crisis of 2012 – 2013. For several years, Cyprus has pursued a strategic plan to develop major tourism products that can offer significant economic benefits to both tourism, and the Cypriot economy. Research undertaken by THR has revealed that some of these are now being re-activated, and the ever-improving economic and financial situation suggests that others may be brought back to life soon. Cyprus Investment Promotion Agency has numerous projects related to the tourism sector and the real estate. The emergence of these already-planned projects has an impact on the spatial development plan to 2030. THR has therefore assembled as much information as it has been possible to obtain and has incorporated the existing pipeline in the spatial development plan. These are namely the development of marinas, golf courses, casino resort, medical and health/wellness centres.
a.
Marinas Some sizeable marina developments are in construction, planning or governmental consideration stages. The respective projects, and their key components are stated below: The construction of Limassol Marina began prior to the financial crisis, and opened in July 2014. It withstood any pressures arising from the financial crisis, and has managed to achieve a reasonably high volume of real estate and marina berth sales. Real estate units that are currently on sale are scheduled for completion, and delivery, in March 2019. During the first half of 2016, it has emerged that other proposed projects are now to come to fruition, probably within the timeframe of this tourism development plan. Table 237. Marinas projected in Cyprus Marina Name
Project Location
1
Limassol Marina Cybarco Developments
Limassol
2
Paralimni Marina PMV Maritime Holdings Ltd
Ayios Nicolaos, Paralimni
3
Ayia Napa Marina MM Makronissos Marina Ltd
Makronissos, Ayia Napa
4
Larnaca Port & Marina Project Promoters; Government of Cyprus
Larnaca
5
Poseidon Grand Marina, Pafos
Potima Bay, Pafos
Source: Government of Cyprus, Online Media
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Key Components 650 Berths 74 Villas - 211 Apartments Retail and F&B Outlets 300 Berths No other info known 350 Berths, 220 Dry Dock Berths 29 Villas - 190 Apartments Event Centre – Beach Club Retail and F&B Outlets +/- 600 Berths (20–25 Super Yachts) Cruise Ship Berth (300m) Cargo and Dry Dock Storage Residential, Hospitality and Commercial Real Estate. 700+ Berths & 222 Dry Dock Berths 186 Residential RE Units Commercial Centre 82 key Tourist Village with Spa
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During THR’s meetings with tourism industry stakeholders, it was suggested by some that the leisure marina business could take advantage of a potential boating triangle between Cyprus, Lebanon, and Israel. Without in-depth analysis, THR is unable to confirm or reject this hypothesis. However, opinion received from marina experts has suggested that this should not be relied upon. The more likely scenario is therefore that Cyprus will primarily need to rely on Cypriot owned boats, and boats owned by foreign nationals moored in Cyprus intended for use in Cypriot waters. Government should therefore be aware of the advantages and limitations of its marina industry, and closely monitor marina performance to ensure that this product category achieves its goals and is a true catalyst to future quality tourism development. It should also actively promote sailing as a tourist activity and work to grow domestic participation. This also has potential health benefits, which provide their own economic benefits to Cyprus economy.
b.
Golf Courses The development of golf courses was another ‘effective way of improving the quality of Cyprus’s tourism product’. Hence, the revised version of the ‘Strategic Plan for Tourism 2000 – 2010 (renamed the Strategic Plan for Tourism 2003 – 2010)’, prepared by the Cyprus Tourism Organisation (CTO), recommended the development of 14 golf courses. The policy for the development of golf courses, Decision No. 61.614, was agreed by the Council of Ministers and dated 16/02/2005.Cyprus currently has 4 golf courses in operation namely Aphrodite Hills, Elea Estate, Mintis Hills (formerly Tsada), and Venus Rock (formerly Secret Valley). The total number of golf courses, based on information provided to THR by the Ministry of Interior is stated in the table below. Table 238. Golf courses projected in Cyprus Developer / Project
Location
Status
1
Med Golf Properties Ltd
Larnaca
Planning
2
Lanitis Farms Ltd
Limassol
Planning
3
Eagle Pine Golf Resorts
Avdimou, Limassol
Planning
4
Vicerio Holdings Ltd & others
Avdimou, Limassol
Planning
5
Lakkos Toy Frangou Ltd & others
Kouklia, Pafos
Planning
6
Venus Rock Estates Ltd
Kouklia, Pafos
Planning
7
Cyprus Limni Resorts & Golf Courses Ltd
Limni Bay, Polis
Planning
8
Cyprus Limni Resorts & Golf Courses Ltd
Limni Bay, Polis
Planning
9
Venus Rock
Kouklia, Pafos
Operating
10
Mintis Hills
Tsada, Pafos
Operating
11
Aphrodite Hills
Kouklia, Pafos
Operating
12
Elia Estate
Pafos
Operating
13
Ayia Napa Forest Golf Ltd
Ayia Napa
Planning
14
Universal Life
Vasa, Larnaca
Planning
Source: Ministry of Interior, Dept. of Town Planning
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Figure 238. Existing and proposed Golf courses
Source: Elaborated from geographic data provided by Government of Cyprus Note: The golf courses grouped in the circle could be considered as a golf cluster.
Further information provided has revealed:
c.
•
Golf courses nos. 9 and 10 are in existence, and have been granted planning permission for upgrades using the Planning Incentives Scheme;
•
Golf courses nos. 1, 2, 4, 6, 7 and 8 have all been granted planning permission but have not yet been constructed;
•
Planning Applications for golf courses nos. 3, 5 and 14 have been submitted and are understood to be currently under consideration.
•
Golf course no. 13, has been granted the lease of government forestry land in the Ayia Napa area but no planning application has been submitted yet.
Casino Resort The development of a dedicated casino resort was proposed some years ago, the realisation of this development is getting ever closer. The Law to Regulate the Establishment, Operation, Function, Control and Supervision of a Casino and Related Matters of 2015 (the “Law”) came into effect on 21st July 2015, providing for the operation and regulation of a casino and casino games in the casino, to establish the Republic of Cyprus National Gaming and Casino Supervision Commission (“the Commission”), to provide for its functions and powers and for matters connected therewith and to authorise and regulate an Integrated Casino Resort (“ICR”) in the Republic of Cyprus. The short-listed bidders (Bloomberry Resorts Corporation, Melco – Hard Rock Resort Cyprus Consortium, and Naga Corp Ltd.) were announced on Tuesday 15th March 2016. Reportedly,
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Hard Rock was looking at developing in Limassol, Bloomberry in Pafos and Nagacorp in Larnaca. It is understood that in early June 2016 the Government granted a three-month extension to the submission date for final bids. Therefore, as of today, no decision has been made yet. When final bids are submitted, both the casino location, and important matters like the number of hotel keys associated with the project will become apparent. For the reasons stated above, whilst the existence of the project as a development pipeline item is acknowledged, THR has not been able to make an allowance for the potential number of keys that it may add to the total supply of tourist accommodation.
d.
Medical and Health/Wellness Centres Cyprus is credited as being one of the first entrants into the European medical tourism sector, and some years ago, the country established a national initiative to promote medical tourism. In fact, since 9.500 BC visitors came to Cyprus to be treated by Cypriot Doctors. Apollodoros of Kition was famous for recommending radish seeds in water as a remedy against poisoning. Synesis the Cypriot (4th BC) was mentioned by Aristotle as a ‘famous doctor’, and so was Apollonios of Kition (1st century BC) who was also known as the Cypriot Hippocrates. The current situation relating to health care / health tourism in Cyprus can be summarised as follows:
e.
•
In recent years, the Cyprus healthcare system is said to have ‘improved tremendously’, and currently is something that both the administration and the practitioners are proud of;
•
There are 6 public hospitals and more than 80 private hospitals and clinics; This represents about 2.500 beds and 2.250 doctors; and about 720 dentists;
•
The Cyprus Government is placing a lot of emphasis in promoting Cyprus as a health care destination with a current annual expenditure on health of over Euro 700 million representing 6% of Gross National Product.
•
The Wellness sector (in simplistic terms the sector between Spas and Medical Tourism) is a fast-growing sector, and one that is easier to enter and operate than the medical one. The potential for this sector in Cyprus should be analysed in detail, and the development of wellness centres should be considered as an integral element of future new resorts, or added to existing assets as a way of upgrading and enhancing their customer value proposition.
Pipeline accommodation development projects As of the date of this document only a limited number of new accommodation keys are known to be in the final stages of planning or construction. THR acknowledges that there may be others that it is not aware of. At the next stage of the tourism planning process, in-depth analysis of the number, scale and type of pipeline projects needs to be carried out to ensure that the appropriate number, and mix, of accommodation keys and other services, is accurately programmed for the respective areas. The number of proposed accommodation keys known to be in the pipelines have been deducted from the total number of new accommodation keys needed (as have the unlicensed keys yet to be regularised referred to previously). Updated version 23.03.2017
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Recommended growth model for Cyprus Selecting the right locations in which to grow tourism is crucial if new development is going to be sustainable, and help the country to achieve its tourism vision for 2030. For the purposes of this plan, the island has been divided into 4 regions: Eastern, Western, Mountains, and Nicosia and a brand has been proposed for each one. Figure 239. Proposed tourism planning divisions and clusters
In each region, appropriate areas have been identified. They have been selected for: •
location;
•
attributes;
•
availability of undeveloped land;
•
infrastructure;
•
potential investment attractiveness, and;
•
the positive contribution that they can make to a sustainable national tourism development plan.
a.
Criteria for Selecting Development Locations
a1.
General The following criteria were considered when selecting the proposed development locations. •
Locational Accessibility – taking existing road networks into account;
•
Infrastructure – whether existing infrastructure (and utility services) available and with possible upgrade and or minor addition can meet the requirements of new development;
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•
Compatibility / Enhancement – whether new development in the location complement / enhance the existing facilities and services;
•
Development Pipeline – whether there are ‘pipeline’ projects that can benefit from other surrounding projects of vice versa;
•
Tourist Appeal – whether the location is attractive to tourists (nature, history, culture, activity, special interest etc.);
•
Local Community – whether the local resident community would benefit from new development within the boundaries of their community (employment, business opportunities, tourist expenditure);
•
Environmental – whether development is likely to be permissible and whether it be carried out without inflicting any environmental damage on the locality.
Rationale for Selecting Specific Locations The table below lists the development locations and the rationale behind their development selection: Paralimni (Protaras / Pernera) Key Selection Reasons •
Good access to existing road networks.
•
Paralimni Marina in development pipeline.
•
Blue Flag beaches.
•
New, higher quality development can elevate the quality of the cluster, and incentivise future asset upgrades.
•
Agia Trias harbour is authentic Cypriot and undeveloped.
•
Numerous activity (water sports) and natural assets (Cape Greco) within easy reach.
•
In designated ‘tourism development zone’.
Agia Napa Key Selection Reasons •
Good access to existing road networks.
•
Agia Napa Marina and associated real estate in development pipeline.
•
Access to Makronissos Beach and Water World.
•
Blue Flag beaches.
•
New, high quality development can elevate the quality of the cluster overall, and incentivise future asset upgrades.
•
Numerous activity (water sports) and natural assets (Cape Greco) within easy reach.
•
In designated ‘tourism development zone’.
Larnaca City & Suburbs Key Selection Reasons •
Proximity to Larnaca International Airport.
•
Good access to existing road networks.
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•
Redevelopment of Port and Marina in the pipeline.
•
McKenzie beach location utilises a ‘brownfield’ site.
•
The Salt Lake offers a uniqueness for a very sensitively developed sporting and health development.
Larnaca Coastal Key Selection Reasons •
Proximity to Larnaca International Airport.
•
Good access to existing road networks.
•
Opportunity to consolidate future development rather than following a fragmented pattern that currently exists.
•
Creates new employment opportunities in a largely agricultural area.
Pissouri – Avdimou Key Selection Reasons •
Proximity to Larnaca and or Pafos International Airports.
•
Excellent access to existing road networks.
•
Opportunity to enlarge and consolidate a location that has already begun developing.
•
Excellent beach at Avdimou.
Omodos Key Selection Reasons (1) •
A high degree of authenticity - in architectural and cultural terms.
•
In the heart of Cyprus’s wine-growing region with an existing winery in the village.
•
Experience of tourism in the village.
•
Sufficiently accessible by road from Limassol or Pafos – adequate quality road bypassing the village.
Omodos has been selected as a conceptual example of what THR intends to do in the touristic areas. The Tourism Development Plan that must be developed as soon as possible, will set the particular goals to achieve. (1)
Pafos City and Rural Key Selection Reasons •
Adjacency to Pafos International Airport and A6 highway.
•
Poseidon Grand Marina in the development pipeline.
•
Adjacency to Akamas Peninsula.
•
Blue Flag quality beaches.
Kathikas Key Selection Reasons •
Central in the Akamas Peninsula.
•
Cypriot authenticity.
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Experience of tourism in the village.
The village is easily accessible off the main road. Once the development criteria to ensure a sustainable spatial planning are established, the following stage is to allocate the additional keys to develop to each proposed area. Three models have been considered for this purpose.
b.
Alternative growth models To establish the criteria to allocate the new keys, it is important to understand how the keys are distributed along the island (the offer) and how they are occupied during the year (the demand). Table 239. Share of keys and arrivals 2015
Ammochostos Ayia Napa Paralimni Larnaca City & Suburbs Mazotos & Coastal Area Limassol City & Suburbs Pissouri – Avdimou Pafos City & Suburbs Polis Akamas Troodos Mountains Nicosia
Share of keys 2015 Offer 41% 22% 20% 7% 7% 14% 14% 31% 27% 4% 3% 4%
Share of arrivals 2015 Demand 31% 18% 13% 10% 10% 12% 12% 37% 36% 1% 4% 5%
Source: CYSTAT, Tourist arrivals 2015; CTO, Units, and beds in operation at 31 st December 2015 by area and type of establishment
The integrated spatial development plan assumes that the future demand and offer will be aligned. To ensure profitability of the new keys to be built (i.e. avoiding oversupply), the dimensioning of the offer considers the distribution of the demand among the different clusters assuming similar occupancy rates throughout the year. Three alternative approaches have been considered to allocate the keys: •
Maintain current split: assumes all areas will grow at the same rate and keys required will increase proportionally everywhere. This option carries the risk of strengthening tourism demand in clusters that are currently suffering from a high demand, therefore are currently near saturation. At the same time, this approach based on expanding current accommodation supply does not allow to foresee new clusters to be developed.
•
Follow last years’ trends: is based on the evolution of the historical data of tourism demand for the different clusters. When demand is being projected accordingly and considering possible ranges, the next years’ demand will keep increasing in the most attractive clusters and decrease in the lesser ones. This alternative is like the previous one in so far as it considers the last years’ trend and does not allow for new clusters to be developed.
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658
Assess each cluster individually: the integrated spatial development plan has the purpose of developing new touristic areas, targeting rural areas, diversifying the tourist centres, and concentrating development in specific areas. This approach considers the existing distribution of keys, but introduces external factors such as available land limitations, potential new areas for development, demand constraints, tourism saturation, existing infrastructures, etc. An individual assessment is done to allocate the new keys to develop considering current available keys, and the proposed new keys distribution from the previous alternatives.
The final integrated spatial development strategy to allocate the new keys to develop is based on an overall assessment of the demand and a case by case review to establish if a cluster has more potential/capacity to host the projected demand or other clusters have a highest chance to increase significantly more and compensate the demand. The following decisions have been taken to redistribute the new keys from the projections: •
Ammochostos has potential to grow, although the gap between Ayia Napa and Paralimni could be reduced. Less than 2.500 new keys are proposed for each cluster.
•
The growth in Larnaca district could be split among Larnaca City and Suburbs and the Mazotos and Coastal area.
•
THR has identified in Limassol a potential area for the development of a TZNI in Pissouri with a maximum of 10.000 keys, which is around 11,5% of the total keys.
•
Pafos currently has the highest number of keys, so it is proposed that the increase is done in Limassol district, particularly in the Pissouri area, to avoid saturation and to balance the new keys.
•
New rural development areas are proposed in Akamas, Omodos and the Troodos mountains and will have a maximum of 1.000 keys each.
•
The new keys to develop in the Troodos Mountains must be sustainable, therefore they are not expected to increase significantly.
•
Nicosia as the capital city will certainly increase the number of tourists but will not become a major tourism destination except for business purpose.
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Table 240. Alternative approaches to allocate
Ammochostos Ayia Napa Paralimni Larnaca City & Suburbs Mazotos & Coast Limassol City & Suburbs Pissouri Omodos Pafos City & Suburbs Polis Akamas Troodos Mountains Nicosia
c.
Share of arrivals 2015 31% 18% 13% 10% 10% 12% 12% 37% 36% 1% 4% 5%
Scenario 1: Current split 31% 18% 13% 10% 10% 12% 12% 37% 36% 1% 4% 5%
Scenario 2: Scenario 3 Trend evolution Wise distribution 32% 32% 19% 17% 13% 15% 10% 10% 10% 8% 2% 12% 24% 12% 11% 11% 2% 37% 28% 36% 23% 1% 4% 1% 4% 3% 5% 3%
Unlicensed accommodation supply Unlicensed accommodation is an important issue in the tourism sector. Privately owned tourist apartments and villas are rented to tourists without license and commercialise through internet-based platforms. When planning future development, it is important to acknowledge current existing offer and how will demand evolve. Government should create a census of existing unlicensed accommodation and develop a regulatory framework to license them. THR recommends the following: •
Create a mandatory register of legal accommodation units in Cyprus
•
Inform that the non-inclusion of an accommodation unit in this register will be penalised with a fine up to 20.000€ or with the closing of operations for two years.
•
Proceed to identify the non-licensed accommodation systematically by one or more of the following means: - Permanent scanning in Internet. It consists in searching for accommodation offers in Internet and checking whether they correspond to licensed keys or not. To do so we recommend outsourcing remunerated services partially according to the detected unlicensed units. - Set a network of 100 inspectors who, in pairs, inspect physically the buildings of the main touristic areas during the high season. This service can also be object of outsourcing. - Compel tourists in July and August (every 3 years) to show at the airport of departure a proof document of the accommodation used in which the service provider is clearly specified. - Invite the licensed offer to report, under a promise of total confidentiality, the nonlicensed offer engaging in unfair competition.
•
Publish in the main media of the island a list of the first 100 unlicensed accommodation as well as the penalties or bans imposed to each one.
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•
Create a website where the temporary license can be obtained (pending a proper inspection) in 5 minutes and make the registration payment (temporary) in the Registry of Tourist Accommodation.
•
Inform tourists (perhaps by delivering a note at the immigration checkpoint) that accommodating in an accommodation unit without license is penalised with 1.000€, and remind them to demand an invoice to show upon departure.
Policy to tackle the “Shared economy” It will be necessary to find an acceptable commitment to market freedom and competition on equal terms (or at least reasonably similar). This means to accept the apartments and bedroom rentals through AirBnB and similar, under the following conditions: •
Restricted to owners with a maximum of 4 bedrooms or 2 apartments.
•
The owners with more of 2 apartments should be registered in Cyprus as an apartment operator and should pay taxes applied to companies’ profits. Alternatively, they can entrust their apartments to a registered operator to manage them and pay the corresponding taxes.
•
All units should meet the minimum safety and hygiene requirements, in line with what is required in hotels (with some technical nuances).
•
All units should obtain the operation licence to operate in Cyprus.
•
Room and apartment owners that operate without license will be fined with dissuasive penalties. For example, the equivalent of one year of income or 20.000€ (amount to be defined by the NTA).
Based on available statistics from CYSTAT with the distribution of stays per the typologies of accommodation used, the 54% of tourists in 2014 stayed in Hotel and 20,5% stayed in other licensed hospitality accommodation, while the rest stayed with friends, in their own residence or in unlicensed units. Table 241. International overnight stays distribution per accommodation type (2014) Tourists arrivals Hotel
Share of Average Overnight tourists stay Stays
Share of stays
1.318.269
54,0%
7,7
10.150.672
39%
Other accommodation (Licensed)
500.454
20,5%
8,9
4.454.041
17%
Other non-licensed
144.033
5,9%
15,2
2.189.303
8%
a. Total Commercial
1.962.756
80%
8,6
16.794.015
65%
Visit Friends and Relatives
302.714
12,4%
15,4
4.661.790
18%
Owned Residences
156.239
6,4%
24,4
3.812.239
15%
Other un-paid accommodation
19.530
0,8%
31,2
609.333
2%
b. Total Non-commercial
478.483
20%
19,0
9.083.362
35%
Total (a+b)
2.441.239
Source: Adapted from CYSTAT Tourism stats (2014)
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10,6
25.881.284
CYPRUS TOURISM STRATEGY
661
The projections developed by THR estimate that the share of overnights in licensed tourism accommodation that will be requiring additional keys to be developed will increase up to 64% from current 56% considering: •
Current unlicensed accommodation is expected to grow at a similar pace as the international tourism demand. For the calculations of the projected capacity to be developed, only current demand in licensed accommodation will be considered. The Cyprus Tourism Strategy to implement until 2030 should be accompanied with regulations aiming to reduce the supply of unlicensed beds, so ultimately unlicensed demand will consequently be transferred to licensed accommodation. However, the process to estimate the existing units proved to be quite difficult (i.e. the figures could range from 30% to 50% of current available accommodation) and its future evolution hardly predictable, so it has been taken out from the projection.
•
We assume that the number of VFR will increase by 20% by considering the concurrence of two factors: the increase of VFR and the reduction of stays in friends and relative's houses in favour of tourist accommodation, as per international trends.
•
The increase of tourists in owned residences is due to the additional 35.000 real estate units expecting that 95% are to be purchased by foreigners (and used by 4,2 persons).
•
Non-paid accommodation is expected to grow by 50%. Table 242. Evolution of share and overnight stays distribution per accommodation type Share of Share of tourists 2014 tourists 2030
Share of stays 2014
Share of stays 2030
Hotel
54,0%
59,1%
39%
45%
Other accommodation (Licensed)
20,5%
22,4%
17%
19%
Other non-licensed
5,9%
6,5%
8%
10%
Total Commercial
80%
88%
65%
75%
Visit Friends and Relatives
12,4%
6,5%
18%
11%
Owned Residences
6,4%
5,1%
15%
13%
Other un-paid accommodation
0,8%
0,5%
2%
2%
Total Non-commercial.
20%
12%
35%
25%
Measures to be taken from the Government should be oriented to promote licensing and encourage refurbishment to provide a premium experience for tourists.
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d.
662
Land required for tourism development In Cyprus, the starting point for permissible development density under the Policy Statement is understood to establish a building footprint ratio (or built area ratio) as the built area over total land used, of 20% for tourist accommodation, and an additional 5% for a ‘tourism enrichment project’. The assumptions proposed by THR are below the maximum density defined for tourism projects, but aligned with current planning. The World Tourism Organisation (UNWTO) recommends that planning and capacity standards in resorts go from no less than 20 and more than 100 beds per hectare (or 10 to 50 keys per hectare), apart from urban type resorts that could increase to 200 – 1.000 beds per hectare (or 100 to 500 keys per hectare). The built areas per keys and the building footprint over total land should be subject to a deeper analysis to be conducted during the development of the individual tourism development master plans for each tourism area, and in accordance with prevailing local urban planning policies. In order to estimate the total area for the new keys for tourism development, THR has defined the following criteria: Table 243. Building specifications for tourism development In Resorts In Cities In Rural
Height Ground floor + 2,5 levels Ground floor + 5,0 levels Ground floor + 1,5 levels
Building footprint 5% 10% 5%
Density < 25 keys/Hectare < 100 keys/Hectare < 25 keys/Hectare
The assigned built area per key is specified as follows: Table 244. Area per key Area per key
Reasoning
Hotels
60 m2
Based on international standards, a 5-star key requires up to 70 m2 and lower categories between 50 and 60m2 depending on the rating
Inns
40 m2
Lower compared to hotels from 3 to 5 stars
Camps
20 m2
Equivalent to 2 parking spaces
Special lodging
50 m2
In line with a hotel area
Guest houses
30 m2
Lower than Inns and even lower than Hotels
Apartments
90 m2
Average size - range 65 to 120 m2
Townhouse1
120 m2
Average size - range 90 to 250 m2
Villa1
200 m2
Average size - range 150 to 400 m2
Note 1: THR considers that from the keys for villas, 50% will be townhouses and 50% villas.
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Table 245. Total land required for tourism development A
Keys A. Hospitality Accommodation Hotels (keys) 15.074 In Resorts (GF+2,5) 7.797 In Cities (GF+5) 5.198 In Rural (GF+1,5) 2.079 Inns (keys) 589 In Resorts (GF+2,5) 52 In Cities (GF+5) 407 In Rural (GF+1,5) 130 Camps&Glamps 653 (parcel) In Resorts (GF) 227 In Rural (GF) 426 Special lodging (keys) 428 In Resorts (GF+2,5) 109 In Cities (GF+5) 137 In Rural (GF+1,5) 182 Guest Houses / BB 2.408 (keys) In Resorts (GF+1,5) 401 In Cities (GF+1,5) 1.756 In Rural (GF+1,5) 251
B
AxB
Built Area per key (m2)
Total Built Surface (m2)
AxB C
C
D
Number Building of floors Building footprint/ (includes Foot print Total Land ground) (m2) (%)
AxB CxD Total Land Needed in Hectare (Ha.)
60 60 60 60 40 40 40 40
904.438 467.813 311.875 124.750 23.566 2.083 16.275 5.208
4,36 3,50 6,00 3,50 5,23 3,50 6,00 3,50
221.283 133.661 51.979 35.643 4.796 595 2.712 1.488
7% 5% 10% 5% 8% 5% 10% 5%
390,6 267,3 52,0 71,3 6,9 1,2 2,7 3,0
20 20 20 50 50 50 50
13.068 4.545 8.522 21.413 5.467 6.834 9.112
1,00 1,00 1,00 3,87 3,50 6,00 2,50
13.068 4.545 8.522 6.346 1.562 1.139 3.645
5% 5% 5% 7% 5% 10% 5%
26,1 9,1 17,0 11,6 3,1 1,1 7,3
30 30 30 30
72.251 12.042 52.683 7.526
2,50 2,50 2,50 2,50
28.900 4.817 21.073 3.010
16.855
57
959.947
3,92
245.102
9% 5% 10% 5% 6%
36,7 9,6 21,1 6,0 434,4
B. Serviced Units Apartments (keys) Type 1 (GF+5) Type 2 (GF+2,5) Villas (keys) Townhouses (GF+1) Villas (GF+1)
6.860 2.058 4.802 2.937 1.468 1.468
90 90 90 160 120 200
617.412 185.224 432.188 469.904 176.214 293.690
4,25 6,00 3,50 2,50 2,50 2,50
154.353 30.871 123.482 187.962 70.486 117.476
TOTAL Serviced Units (B)
9.797
111
1.087.316
3,18
342.315
7% 10% 5% 8% 10% 5% 6%
277,8 30,9 247,0 305,4 70,5 235,0 583,3
C. Real Estate (C) Apartments (keys) Type 1 (GF+5) Type 2 (GF+2,5) Villas (keys) Townhouses (GF+1) Villas (GF+1)
15.630 4.689 10.941 6.699 3.349 3.349
90 90 90 160 120 200
1.406.691 422.007 984.684 1.071.764 401.912 669.853
4,25 6,00 3,50 2,50 2,50 2,50
330.986 70.335 281.338 428.706 160.765 267.941
TOTAL Real Estate (C)
22.328
111
2.478.455
3,26
759.692
7% 10% 5% 8% 10% 5% 7%
509,2 70,3 562,7 571,6 160,8 535,9 1.080,8
Development (A+B+C)
51.279
90
4.600.507
3,34 1.376.399
6%
2.136,0
TOTAL Hospitality (A)
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THR has estimated the land required to develop the new accommodation keys in Cyprus. The density is between 20 and 30 keys/hectare which is on the low-very low density range with 24,0 keys per hectare. The built surface, the buildings footprint and the total land needed is: Table 246. Distribution of required land between resorts, cities, and rural areas
In Resorts In Cities In Rural TOTAL Development (A+B+C)
Total Built Building Foot Total Land Surface (m2) print (m2) Needed (ha) 3.045.494 934.357 1.482,1 1.233.864 338.421 471,8 321.149 103.620 182,1 4.600.507 1.376.399 2.136,0
Distribution (%) 69% 22% 9% 100%
The Republic of Cyprus has a total surface of 8.997 km2, therefore, the total area required for tourism development will be 0,237%, as less than 10% will be built, tourism accommodation buildings will represent only 0,0104% of total country’s surface. THR has identified that there are several golf courses planned and/or with permission granted. In case they all become a reality in the coming years, additional land will be required. •
Scenario 1: in which 10 golf courses are built considering an average size of 50 hectares each, excluding the residential part, these lands should be added to the total land needed.
•
Scenario 2: in which 5 additional golf courses are built considering the same characteristics. Table 247. Additional land requirements for golf courses Total Built Surface (m2)
As weight As weight on the Total Land on the Republic of Needed Republic of Cyprus (%) (ha) Cyprus (%)
Building Foot print (m2)
In Resorts
3.045.494
934.357
0,0104%
1.482,1
0,165%
In Cities
1.233.864
338.421
0,0038%
471,8
0,052%
In Rural
321.149
103.620
0,0012%
182,1
0,020%
4.600.507
1.376.399
0,0153%
2.136,0
0,237%
-
-
-
500,0
0,056%
5.415.232
1.692.900
0,0153%
2.636,0
0,293%
-
-
-
250,0
0,028%
5.415.232
1.692.900
0,0153%
2.886,5
0,321%
Sub-total (A+B+C+D) S1. 10 golf courses Sub-total (A+B+C+D+S1) S2. +5 additional golfs TOTAL (A+B+C+D+S1+S2)
Note. The Republic of Cyprus has a total surface of 8.997 km2.
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4.
Action plan proposed
4.1
Action plan and priorities
665
The approach taken to prescribe what needs to be done to progress a sustainable tourism planning and development model for the period to 2030, has identified 6 priorities. •
New development must be consolidated - primarily in new mixed-use resorts.
•
Increasing the supply of tourist accommodation and services should not be solely reliant on new development. Upgrading and refurbishing some existing assets can contribute to enhancing the market position of the clusters.
•
The urban environment, including landscaping, and the ‘visual pollution’ created by a variety of issues, must be tackled rigorously.
•
Land ownership, protection of lands, and designation of zones in which tourism development should be undertaken, plus the legal framework surrounding planning and development, all point to the need for the government to lead the national tourism planning effort;
•
The feasibility of new projects must be evaluated as an integral part of the tourism planning and development effort.
•
Last, but certainly not least, real estate is an important, integral part of tourism development. There is a need for a national real estate policy that is wholly aligned to tourism to try and clean up the current situation and mitigate against such events recurring in future years.
The figure below shows the roadmap for the next 14 years, considering the key milestones to be achieved in each period regarding: •
Direct jobs generated.
•
Impact of tourism on National GDP.
•
Number of international tourist arrivals (business and pleasure trips).
•
New tourist accommodation keys developed.
•
Mixed-Use Resorts developed.
•
Tourism Zones of National Interest developed.
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Figure 240. Long term milestones 2017-2030 New tourism governance framework launched
11.000+ new hospitality keys operational 1st Top Experience launched
4 Top Experiences launched
2017-2020 Signature Experience Program (SEP) launched
22.000+ new hospitality keys operational 8 Top Experiences launched
2021-2025
15,000 new direct employments activated 1st TZNIs launched
33.000+ new hospitality keys operational
2026-2030
19.000 new direct employments activated
26.000 new direct employments activated
Key milestones
The following roadmap show the milestones for the next 4 years (2017-20). They are drawn from the 7 outcomes of the Integrated spatial development plan with the aim of providing a general overview of the critical moments along the plan implementation. Figure 241. First 4-year milestones 2017-20
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4.2
667
Setting priorities to achieve the objective For Cyprus to perform a successful tourism development master planning effort, we need to make sure that:
a
•
Future tourism development is consolidated in tourist areas, resorts and TZNIs;
•
A new residential real estate policy is implemented that places controls on development but increases tourism investment attractiveness;
•
The planning and development legal and regulatory framework is updated.
Future tourism development is consolidated in tourist areas, resorts, and tourism zones of national interest (TZNIs). To achieve this, Cyprus Government and National Tourism Authorities need to do the following:
b
•
Define tourism development plan concepts based on three key development guidelines: planning framework and development guidelines, hospitality development and mixeduse resort development.
•
Propose tourist areas and recommend core development guidelines.
•
Estimate tourism growth for each tourist area that is identified.
•
Identify improvements that can be made to tourism services, infrastructure, utilities, and the urban environment for each tourist area identified.
A new residential real estate policy is implemented that places controls on development but increases tourism investment attractiveness. To achieve this, Cyprus Government and National Tourism Authorities need to do the following:
c
•
Integrate residential real estate as a key component of the plan
•
Provide recommendations on real estate development policy, involving residential units and serviced residences for mixed-use resorts.
The legal and regulatory framework is updated to improve the planning and development framework. To achieve this, Cyprus Government and National Tourism Authorities need to do the following: •
Review and redraft the planning and development legal and regulatory framework
•
Define special conditions to be applied to tourism development projects
•
Review and redefine existing designated tourism development zones
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668
Stakeholders The implementation of the tourism integrated development plan in the several clusters requires the cooperation and collaboration of a variety of parties. From the National Tourism Authority, downwards to existing tourism owners and operators, and the local resident population, it is imperative that the plan is progressed and implemented in an inclusive manner. Only in this way it will provide the desired benefits. Table 248.Main stakeholders and their roles Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning, and Housing Ministry of Interior, Dept. of Lands, and Surveys Ministry of Agriculture, Rural Development, and Environment Ministry of Finance Regional & Local Government Authorities of Cyprus Statistical Service of Cyprus (CYSTAT) Government Legal Team / Advisors Cyprus Investment Promotion Agency (TourInvest) Cyprus Hotel Association Cyprus Hoteliers Association Royal Institute of Chartered Surveyors in Cyprus (RICS) Cyprus Real Estate Agents Association Cyprus Land and Building Developers Association
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Informed
X X
X X
X X
X
X
X
X
X
X X
X X
X
X
X X X X
CYPRUS TOURISM STRATEGY
4.4
669
Budget The implementation of the plan has two main purposes that will require significant investment that will be considered the hard investment related to the plan: •
Develop new tourism offer: hard investment in tourist accommodation, infrastructure, tourism products, etc.
•
Improve the existing tourism offer: hard investment in tourist accommodation, infrastructure, existing tourism products etc.
The breakdown of the projected investment by types of hard investment that will be related to the integrated spatial development plan is as follow: Table 249. The four types of hard investment 2017-2030 (Million Euro) Concept
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
106
160
174
158
597
63%
c. Infrastructure & Utilities
986
1.643
1.972
1.972
6.572
15%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
526
802
1.278
2.406
5.012
0%
e. Real Estate (including hotel serviced units)
756
1.224
1.623
2.174
5.776
0%
Note: The numbers have been rounded up, so slight differences may be found.
The hard investment will be requiring a soft investment as civil servant and other employees’ salaries that will oversee the planning, implementation, and monitoring phases of the plan. The table below shows the breakdown of budget by phase over the next 4 years: Table 250.Soft investment related to the implementation Specific plans Planning Activities
2017 2018 2019 2020 Cost (.000 €) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 796
Implementation & Monitoring Activities
12.173
TOTAL
13.089
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1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
CYPRUS TOURISM STRATEGY
670
Part II. Recommendations for integrated spatial development by areas 1.
Introduction: 13 major areas and its product vocation
2.
Eastern Region
3.
4.
5.
2.1
Paralimni
2.2
Ayia Napa
2.3
Larnaca
2.4
Coastal Larnaca
Western Region 3.1
Limassol City and Suburbs
3.2
Pissouri â&#x20AC;&#x201C; Avdimou
3.3
Omodos
3.4
Pafos City and Suburbs
3.5
Kathikas
3.6
Polis and Limni Bay
Mountains and Lowlands region 4.1
Troodos
4.2
Marathasa Valley
Nicosia 5.1
Nicosia
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1.
671
Introduction: 13 major areas and its product vocation The identified areas should be developed as follows:
Eastern Region 1. Paralimni (Protaras – Pernera) – as the most sought after family tourism cluster in Cyprus, with a customer value proposition (CVP) to provide a tourism cluster offering the best family sun and beach experience in Cyprus, complemented by adjacency to nature and exceptional marine. The main tourist activities and experiences should provide:
Sun & Sea
MultiGenerational Activity
Sailing / Boating
Water sports
Diving
The estimated number of tourist accommodation keys by 2030 would be between 10.408 and 12.720. Locations that can facilitate this development growth and enhancement have been identified in the supplementary report. 2. Ayia Napa - should aspire to be regarded as one of Europe’s top 3 beach and nightclubbing holiday destinations, with a customer value proposition (CVP), offering the best beach and marine experience in Cyprus for Young Adults, complemented by international standard beach clubs and nightlife. The main tourist activities and experiences should provide:
Sun &
Young Adult
Sailing /
Sea
Entertainment
Boating
Water sports
Diving
The estimated number of tourist accommodation keys by 2030 would be between 11.795 and 14.417. Locations that can facilitate this development growth and enhancement are specified in the supplementary report. The forthcoming development of Ayia Napa Marina is at the heart of this growth and repositioning. 3. Larnaca (city & suburbs) - will be more than Cyprus’s primary air and sea access point by providing tourists with the essence of Cyprus from the moment of arrival, with a CVP offering an urban tourism cluster providing sun, beach and activity to all ages and tastes, combined with unique nature and an historical flavour. The main tourist activities and experiences should provide:
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Sun &
MultiGenerational
Sea
Sailing / Boating
Activity
Water sports
672
Nature
The estimated number of tourist accommodation keys by 2030 would be between 5.724 and 6.996. Locations that can facilitate development growth and enhancement in this area have also been identified in the supplementary report. The city is in a potentially unique position of being considered as one of the potential locations for the new casino resort. 4. Larnaca (Mazotos & coastal) - will establish itself as leading alternative new location for sun and beach holidays. Its CVP will be as a new tourism cluster offering 21st century sun, beach, and leisure experience for the whole family. The main tourist activities and experiences will provide:
Sun &
MultiGenerational
Sea
Sailing / Boating
Activity
Water sports
Multi-Sports
The estimated number of tourist accommodation keys by 2030 would be between 1.562 and 1.909. This location could also provide the opportunity to create a Tourism Zone of National Interest (TZNI).
Western Region 5. Limassol (city & suburbs) â&#x20AC;&#x201C; will reinforce its position as the leading combined tourism and commercial centre of Cyprus. It will deliver value to its tourists, primarily adults and older children, with its sun, beach, and marine-focused experiences. The main tourist activities and experiences will provide:
Sun & Sea
Events
Sailing / Boating
Water sports
The estimated number of tourist accommodation keys by 2030 would be between 7.632 and 9.328. The strong likelihood of Limassol being the preferred location for the new casino resort will provide most, it not all, of the growth that the city will require.
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6. Limassol (Pissouri - Avdimou) - will be one of Europe leading fully inclusive ‘resorts’ (and possibly Cyprus’s TZNI). Its CVP will be a tourist and residential community offering a diverse and inclusive sun, beach, leisure, and sporting experience in a single location. The main tourist activities and experiences will provide:
Sun &
Multi-Generational
Sea
Activity
Golf
Water sports
Cypriot Food & Wine
The estimated number of tourist accommodation keys by 2030 would be between 7.979 and 9.753 if this area is to become Cyprus’s tourism zone of national interest (TZNI). 7. Omodos – is a village with a distinctive charm and ambience. It will be a key location that defines Cyprus as a destination offering rural tourism equally as desirable as its coastal tourism. Its CVP will provide a tourism cluster (village) that portrays authentic Cypriot life, highlighting many features previously undiscovered by Cyprus tourists – namely its viniculture, nature, natural produce, traditional music, and dance. The main tourist activities and experiences will provide:
Viniculture
Nature
Cypriot Gastronomy
Traditional Music & Dance
The estimated number of tourist accommodation keys by 2030 would be between 1.040 and 1.272. Locations that can facilitate development growth and enhancement in this area have been identified in the supplementary report. 8. Pafos (city & suburbs) - will be a year-round tourism cluster, offering a great diversity of tourist experiences. Its CVP will be as a tourism cluster offering a multi-generational tourism product focused on sun and beach in summer month, and active and passive leisure and sporting pursuits at all other times of the year. The main tourist activities and experiences will provide:
Sun &
History &
Sailing /
Sea
Culture
Boating
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Water sports
Golf
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The estimated number of tourist accommodation keys by 2030 would be between 16.305 and 19.929. Although there is a limited amount of new development land available, there are still some interesting opportunities. The development of new Poseidon Grand Marina will have a major impact on tourist development in Pafos (city & Suburbs). 9. Akamas (Kathikas) – This is one of the exciting opportunities offered by a focused effort to develop the island’s rural tourism product. Kathikas will be a key location for defining Cyprus as a rural tourism equally as desirable as coastal tourism. The village’s CVP will portray authentic Cypriot life, highlighting many features previously undiscovered by Cyprus tourists – namely its viniculture, nature, natural produce, traditional music, and dance. The main tourist activities and experiences will provide:
Viniculture
Nature
Cypriot Gastronomy
Traditional Music & Dance
Kathikas should also optimise its location on Akamas Peninsula and proximity to the protected areas of the Akamas national Park. The estimated number of tourist accommodation keys by 2030 would be between 694 and 848. Locations that can facilitate development growth and enhancement in this area have been identified in the supplementary report. 10. Polis (Neo Chorio & Limni Bay) - will be Cyprus’s most luxurious tourism cluster, with a CVP offering the most luxurious adult sun and beach experience in Cyprus, complemented by adjacency to nature on Akamas Peninsula, and exceptional marine experiences. The main tourist activities and experiences will provide:
Sun & Sea
Nature
Sailing / Boating
Health & Wellness
Gastronomy
The estimated number of tourist accommodation keys by 2030 would be between 2.428 and 2.968. Future development needs to be limited to ensure that exclusivity can be maintained, whilst providing the units necessary to deliver service to the expected number of luxury customers.
Mountains and Lowlands Region 11. Troodos – will be one of Europe’s most sought after mountain tourism destinations, attracting tourists not normally familiar with mountain environments. Its customer value proposition will be as a mountainous tourism cluster offering exceptional natural surroundings where tourists can sample traditional Cypriot mountain life delivered by real Cypriot mountain residents. The main tourist activities and experiences will provide:
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CYPRUS TOURISM STRATEGY
Nature
Multi-Generational Activity
Camping & Picnicking
Forest Adventure
675
Traditional Cypriot Gastronomy
The estimated number of tourist accommodation keys by 2030 would be between 694 and 848. The development opportunity presented in this area has not been assessed in detail since the government is already pursuing a master plan initiative for its state-owned assets in the area. THR believes that this effort should be completed before any further consideration is given to how to incorporate the area into the tourism planning effort. 12. Marathasa Valley â&#x20AC;&#x201C; is a unique location that demands a unique approach. It will provide 21st century tourism facilities in an environment that demonstrates the Cyprus of bygone eras, with a customer value proposition offering authenticity with 21 st century comfort, allowing tourists to partake of a wide range of natural, traditional, and healthy experiences. The main tourist activities and experiences will provide:
Health & Wellness
Nature
Special Interest & Learning
Cypriot Gastronomy
The estimated number of tourist accommodation keys by 2030 would be between 694 and 848. Development should primarily be focused on the villages of Kalapanayotis, Moutoulas, and Pedoulas.
Nicosia 13. Nicosia â&#x20AC;&#x201C; has unique challenges but will become a noted European city, preserving its unique history. It CVP will be as a city tourism experience that displays modern Cypriot life whilst respecting its history, culture and heritage through its events, gastronomy, and cultural heritage. The main tourist activities and experiences will provide:
Events (Business & Leisure)
History
Gastronomy
Medical & Wellness
The estimated number of tourist accommodation keys by 2030 would be between 2.428 and 2.968. Recognising that the government needs land for a variety of economic reasons, not just tourism, THR does not feel it can identify specific locations that should be used for tourist accommodation and associated development.
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CYPRUS TOURISM STRATEGY
2.
676
Eastern Region
Ammochostos District
2.1
•
Paralimni
•
Ayia Napa
Paralimni
2.1.1 Tourism segments to be developed Snapshot of the current situation Protaras & Pernera are the main in the Paralimni Municipality tourism clusters. Both have good road access, high quality seawater, and sandy beaches - the best known of which is Fig Tree Bay. Over the years, they have both expanded, with numerous high capacity hotels, hotel apartments, restaurants, pubs/bars, and associated facilities. Being quieter than neighbouring Ayia Napa, and with less of a ‘club’ scene, they are more family oriented. They are also believed to be favoured areas for domestic tourists living in Nicosia. However, the extent, and linear nature, of tourism development over the years has limited the scope of future ‘front line’ coastal development. Therefore, in the longer term, new development will need to be limited, or carried out more inland. Protaras is also one of the most popular diving destinations in Cyprus, with what are believed to be some of the best dive sites in Cyprus and the Eastern Mediterranean. Green Bay is believed to be regarded as the best and most popular.
Tourist demand Paralimni (Protaras – Pernera) attracted 349.952 international tourists in 2015. Between 2011 and 2015, the number of international tourist arrivals has very slightly decreased from 354.923 to 349.952.
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Table 251. Evolution of international tourist arrivals in Paralimni (2011- 2015) 2011
2012
2013
2014
2015
Paralimni
354.923
365.386
347.768
321.243
349.952
-share %
14,84%
14,83%
14,46%
13,16%
13,16%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014.
The 3 main source markets for Paralimni accounted for over 75% of the international tourist arrivals. Table 252. Top 3 source markets for Paralimni (2014) Source market
Share of arrivals
United Kingdom
40,3%
Russia
24,1%
Sweden
10,7%
Source: CYSTAT, Tourism Statistics 2014
A more detailed assessment of tourism performance in Paralimni 2015 is tabulated below. Table 253. Tourism performance in Paralimni (2015) Tourism Performance 2015
Paralimni
International Tourists
349.952
share of total international tourist arrivals (%)
13,2%
International Tourist Expenditure - (Euro millions)
407,80
share of total international tourist expenditure (%)
19,3%
Total Tourist Overnights share of total tourist overnights stays (%) â&#x20AC;&#x201C; by District International Tourist Overnight Stays average Length of Stay â&#x20AC;&#x201C; International Tourists (nights) Domestic Tourist Overnight Stays Estimated Annual Occupancy Rate (%)
2.582.283 19,3% 2.423.002 6,92 159.281 35,0%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
Accommodation supply Paralimni had a total supply of 8.501 tourist accommodation keys (20.190 beds) at the end of 2015. This is the number upon which the projected future supply has been calculated.
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Table 254. Accommodation supply in Paralimni (2015) Accommodation Supply 2015
Paralimni
Total Keys (licensed)
8.501
-national share of licensed keys (%)
19,7%
Total Beds (licensed)
20.190
-national share of licensed beds (%)
23,9%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment
Using a weighted average of the respective classification of existing tourist accommodation, Paralimni quality positioning is currently 3,7. It is understood that Ammochostos is the district in which the issue of unlicensed hotel accommodation is most prevalent. It has been estimated that the total number of such keys in Paralimni amounts to 960.
Vision and elements in favour and against it Vision 2030: Paralimni will be the most attractive family tourism cluster in Cyprus.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 255. Elements supporting and limiting Paralimni Vision In favour of the Vision
Against the Vision
• Good road access from Larnaca Airport for international tourist arrivals, and from Larnaca and Nicosia for domestic tourists.
• Limited availability of front line coastal development land (without lining the entire coastline).
• High quality seawater and beaches.
• Beach and water-based activity facilities are basic and only of average quality.
• Proposed development of Paralimni Marina.
• Pernera and Protaras have no identifiable ‘centres’.
• Volume of tourist accommodation (that can be upgraded/redeveloped).
• High volume of unlicensed tourist accommodation.
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Segments to be developed The positioning of Paralimni is recommended as follows: 1 Geo-target
Frame of 2 Reference
• International
4
4
4
• Domestic
4
4
0
• Paralimni will be chosen as the best family sun and beach experience in Cyprus - an experience that is complemented by the adjacency to nature (Cape Greco) and exceptional marine experiences
3 Products
Sun & Sea
4
Points of Difference
MultiGenerational Activity
Sailing / Boating
Water sports
Diving
• The measures specified below will differentiate Paralimni and enhance its customer value proposition so that it attains an enhanced quality standard of 4,0.
To attract and satisfy the needs and expectations of current, and future, tourists in Paralimni, the following product segments should be enhanced and or developed/redeveloped. Table 256. Recommendations by product segment for Paralimni Product Segment
Sun & Sea
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. The 8 Blu Flag beaches, could further enhanced and be themed to have more focused appeal to different age groups and desires (including adults & families). • High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
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Product Segment
680
Recommended approach • Multi-generational vacations combine family time and vacation time enjoying activities that are well-suited for different ages, new town centres should be created in Protaras and Pernera.
Multi-generational activity
• The new town centres will allow for sharing cultural enrichment, enjoying a relaxing time, having fun in the sun, or with outdoor sports and activities, with many possibilities for every one’s preferences. • A variety of dining and sightseeing choices as well as sports, games, crafts, and activities, that cater to all ages and child care, are products to be promoted and developed.
Sailing/Boating
• The future Paralimni marina with docking facilities and commercial spaces will contribute to offer the greatest impetus to this segment. There is no better way to appreciate the beauty of the Cyprus coastline than from a boat through licensed charter companies and state of the art facilities. • The existing fishing harbours in Protaras could also play a greater role in promoting this segment. Tourists and locals could experience local traditions in fish markets and learn from experiences.
Water sports
Diving
• As a beach destination, the offer of water sports around Cape Greco should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus. • Cyprus has the best marine sites to provide a unique diving experience with an abundance of reefs, caves, and wrecks of Cape Greco. • The calmness and clarity of the sea makes for excellent visibility, creating the ultimate conditions for first time divers and beginners, as well as providing exciting dives for experienced divers.
2.1.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Paralimni will grow to 932.162 tourists per annum, of which 694.773 (74,5%) are expected to be international tourists. This represents an increase of nearly 400.000 on the number of international tourist arrivals in 2015.
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Table 257. Projected growth in tourist arrivals for Paralimni (2030) Tourist Arrivals
Paralimni
International Tourists
694.773
74,5%
Day Visitors
204.842
22,0%
Domestic Tourists
32.548
3,5%
Total Projected Tourists
932.162
-share of total Cyprus tourists
15,0%
Tourist accommodation development The total supply of tourist accommodation keys required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in Paralimni to +/- 4,0 (an increase of 0,3 points on the current situation), needs to be between 10.408 and 12.270 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government).
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Table 258. Tourist accommodation projection for Paralimni (2030) Accommodation Category
2015 keys
a. Hotels / Hotel Apartments
2030 keys
New keys
7.613
7.940-9.704
327-2.091
0
79-97
79-97
- 5*
426
1.985-2.427
1.559-2.001
- 4*
4.348
4.288-5.240
(-60)-892
- 3*
2.839
1.588-1.940
(-1.251)-(-899)
55
110-134
55-79
- 2*
55
99-121
44-66
- 1*
0
11-13
11-13
830
763-933
(-67) - 103
d. Guest Houses
2
182-222
179-219
e. Campsites
0
91-111
91-111
f. Serviced Units
0
1.323-1.617
1.323-1.617
- 5* Grand Luxury
b. Inns (1 & 2 stars)
c. Special Lodging
Sub Total Keys – Licensed (a+b+c+d+e+f)
8.501
10.408-12.720
g. Unlicensed keys regularised
1.907-4.219 (-864) - (-1.056)
h. Development pipeline
0
New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
1.043 – 3.163 19,7%
15,0%
9,3%
3,7
4,0
+0,4
31st
Source: CTO, Units, and beds in operation at December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 1.043 and 3.163, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation (intended to be 80% of the existing total number of unlicensed hotel units in Cyprus), in the various categories to which this applies, will contribute between 864 and 1.056 keys to the increased accommodation supply in Paralimni. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects in planning or construction in the Paralimni area. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented.
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Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 4,0 has created a need for between 1.251 and 899 existing 3* keys to be upgraded to 4* or 5*.
Development land ‘Frontline’ development land is limited. Even taking this into account THR has identified areas that can accommodate some new tourist accommodation and associated developments. This is primarily in the Ayia Trias area, and indicated on the map below. The respective area(s) have been chosen because of their key attributes: •
Location - one with good quality beach;
•
Good access from the existing road network;
•
No expected limitations on locally available infrastructure (utility services);
•
Proximity to planned new Paralimni Marina and existing Ayia Trias Harbour;
•
In designated tourism development zone(s);
•
Adjacent residential developments can benefit from new resort assets;
•
Adjacent tourist assets can also benefit from the development of new tourist accommodation, especially if of a mixed-use resort type;
•
Easy access to Cape Greco;
•
No expected complicated construction implications. Figure 242. Potential development locations in Paralimni
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Source: Elaborated from geographic data provided by the Ministry of Interior â&#x20AC;&#x201C; Dept. of Lands & Surveys Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
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685
2.1.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Paralimni has several services demands to meet the needs and expectations of its tourists. Table 259. Tourism services improvement needed in Paralimni Category
Effort needed
Accommodation
44000
Retail
44400
Leisure
44400
Public Transport
44440
Experiential System
44440
Gastronomy
44400
Interpretation Centres
44440
Tourist Information
44400
Tour Guides & Attractions Personnel
44400
Destination Management Companies
44440
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services in Paralimni. Table 260. Utility service requirements in Paralimni (2015 and 2030) Tourists
Potable Water
Waste Water
Electricity
Solid Waste
Overnights
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
349.952
2.423
484.600
2.423
387.680
1.938
33.192
166
3.153
16
2030
694.773
4.399
879.822
4.399
703.858
3.519
60.262
301
5.725
29
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure Paralimni is well connected to the rest of the island through the motorway system. Although its location at the end of the island provides few alternatives to create itineraries except from going along the coastline. The suggested potential coastal locations are all adjacent to the existing road network, and therefore there should be no road investment implications on the government. The lower
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range road requirements of specific developments cannot be identified until master planning of the respective areas has been carried out.
2.1.4 Improvements to the built environment The urban environment in Paralimni has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 261. Urban environment improvement needed in Paralimni Category
Effort needed
Street Vegetation
44400
Wayfinding and Directional Signage
44440
Visual Pollution
44440
Buildings Restoration
44400
Street Furniture
44440
Street Lighting
44440
Street Cleanliness
44440
Waste Collection Bins
44440
Waste Recycling
44440
Master Planning
44440
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
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â&#x20AC;˘
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
â&#x20AC;˘
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
2.1.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 262. Action plan for Paralimni integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 263. Stakeholders for Paralimni integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
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X
X
X
X
Informed
X X
X
X
X X
CYPRUS TOURISM STRATEGY
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An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 264. Estimated budget for the implementation in Paralimni (Millions) Concept
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
9-10
13-16
14-17
13-16
49-59
65%
c. Infrastructure & Utilities
80-98
133-163
160-196
160-196
534-652
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
43-52
65-80
104-127
195-239
407-497
0%
e. Real Estate (including hotel serviced units)
61-75
99-121
132-161
176-216
469-573
0%
Total
193-236
311-380
410-501
545-666 1.458-1.782
Note: All numbers have been rounded up, therefore slight differences might appear
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8%
CYPRUS TOURISM STRATEGY
2.2
689
Ayia Napa
2.2.1 Tourism segments to be developed Snapshot of the current situation Ayia Napa is one of Cyprus’s most popular, and famous, tourist clusters. With 14 Blue Flag beaches – Nissi Beach being the most famous - it is a haven for beach and water sports enthusiasts, particularly younger ones. Ayia Napa has been transformed over the years - from a fishing village to a typical Mediterranean resort, and now a high activity multicultural tourism cluster. Whilst it caters for tourists of all ages and tastes, its primary reputation is for beach parties and nightlife. The cluster contains more than 80 bars and 12 clubs, some of which feature international acts. Activity in the resorts and on the beaches, is augmented by the adjacent Cape Greco headland, which attracts visitors for sightseeing, cliff jumping, bike riding and a variety of other activities. It is one of the most famous spots in Cyprus for photography lovers due to its picturesque nature, caves, cliffs, clear waters, and trees. Tourism development has been ‘linear’ over the years, as developers sought access to the beachfront locations. The result is that the cluster now occupies approx. 8 Km of coastline.
Tourist demand Ayia Napa attracted 474.555 international tourists in 2015. Even though the number of international tourist arrivals has increased 8% from 440.492 to 474.555 between 2011 and 2015, the cluster has lost just over 17,9% of its share of international tourists. Table 265. Evolution of international tourist arrivals to Ayia Napa (2011- 2015) 2011
2012
2013
2014
2015
Ayia Napa
440.492
482.273
455.629
435.623
474.555
-share %
18,42%
19,57%
18,94%
17,84%
17,84%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014
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690
The 3 main source markets for Ayia Napa accounted for almost 65% of the international tourist arrivals. Table 266. Top 3 source markets 2014 for Ayia Napa Source market
Share of arrivals
Russia
36,1%
United Kingdom
14,9%
Sweden
12,5%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of the tourism performance of Ayia Napa in 2015 is tabulated below. Table 267. Tourism performance in Ayia Napa (2015) Tourism performance 2015
Ayia Napa
International Tourists
474.555
- share of total international tourist arrivals (%)
17,8%
International Tourist Expenditure - (Euro millions)
555,97
- share of total international tourist expenditure (%)
26,2%
Total Tourist Overnights
3.501.717
- share of total tourist overnights stays (%) â&#x20AC;&#x201C; by District International Tourist Overnight Stays
26,2% 3.285.723
-average Length of Stay â&#x20AC;&#x201C; International Tourists (nights)
6,92
Domestic Tourist Overnight Stays
215.994
Estimated Annual Occupancy Rate (%)
65,3%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
Accommodation supply Ayia Napa had a total supply of 9.327 tourist accommodation keys (14.702 beds) at the end of 2015. This is the number upon which the projected future supply has been calculated. Table 268. Accommodation supply in Ayia Napa (2015) Accommodation Supply 2015
Ayia Napa
Total Keys (licensed)
9.327
- national share of licensed keys (%)
21,6%
Total Beds (licensed)
14.702
- national share of licensed beds (%)
17,4%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment Updated version 23.03.2017
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As stated above, it is understood that Ammochostos is the district in which the issue of unlicensed hotel accommodation is most prevalent. In Ayia Napa this has been it is estimated to amount to 1.440 keys. Using a similar weighted average of the respective classification of existing tourist accommodation, Ayia Napa’s quality positioning is currently 3,5.
Vision and elements in favour and against it Vision 2030: Ayia Napa will be one of Europe’s top 3 beach and clubbing holiday destinations.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 269. Elements supporting and limiting Ayia Napa’s Vision In favour of the Vision •
Good road access from Larnaca Airport
Against the Vision • High degree of urban chaos, and noise pollution at peak season.
• A good existing reputation for partying and night life.
• Lack of focus amongst owners and operators in the cluster (trying to target too many product segments).
• Volume of existing tourist accommodation.
• High degree of seasonality.
• Proposed development of Ayia Napa Marina.
• High number of existing ‘unlicensed’ keys suggest that owners/operators in Ayia Napa are not compliant and may be reticent to become compliant.
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692
Segments to be developed The positioning of Ayia Napa is recommended as follows: 1 Geo-target
2
Frame of Reference
• International
4
4
4
• Domestic
4
0
0
• Ayia Napa will be chosen because of the best beach and marine experience in Cyprus for young, and ‘young at heart’, adults, complemented by international standard beach clubs and nightlife
3 Products
4
Points of Difference
Sun &
Young Adult
Sea
Entertainment
Sailing / Boating
Water sports
Diving
• The measures specified below will create the differentiation and customer value proposition required. This will achieve an enhanced quality standard of 4,4.
To attract and satisfy the needs and expectations of current, and future, tourists in Ayia Napa, the following product segments should be enhanced and or developed/redeveloped. Table 270. Recommendations by product segment for Ayia Napa Product Segment
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. The 14 Blue Flag beaches could be themed to have more focused appeal to different age groups and desires, focusing on young adult beach clubs and family beaches in combination with the existing offer.
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
Young entertainment
adult
• Ayia Napa is the centre for nightlife in Cyprus, should provide an attractive calendar of events to ensure that is always bustling with many of clubs to enjoy, excellent wine bars and first-rate restaurants to try. • The new Ayia Napa marina will incorporate dining and shopping attractions suitable for young adults.
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CYPRUS TOURISM STRATEGY
Product Segment
Sailing & Boating
693
Recommended approach • The new Ayia Napa marina with docking facilities and commercial spaces will contribute to offer the greatest impetus to this segment. There is no better way to appreciate the beauty of the Cyprus coastline than from the boat through licensed charter companies and state of the art facilities. • The existing fishing harbours could also play a greater role in promoting this segment. Tourists and locals could experience local traditions in fish markets and learn from experiences. • As a beach destination, the offer of water sports should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus.
Water sports
• Cyprus has the best marine sites to provide a unique diving experience with an abundance of reefs, caves and wrecks, Cape Greco can be easily reached.
Diving
• The calmness and clarity of the sea makes for excellent visibility, creating the ultimate conditions for first time divers and beginners, as well as providing exciting dives for experienced divers.
2.2.2. Guidelines for growth Projected tourism growth By 2030, it is projected that Ayia Napa will grow to 1.056.451 tourists per annum, of which 787.409 (74,5%) are expected to be international tourists. This represents an increase of nearly 200.000 on the number of international tourist arrivals in 2015. Table 271. Projected growth in tourist arrivals in Ayia Napa (2030) Tourist arrivals
Ayia Napa
International Tourists
787.409
74,5%
Domestic Tourists
232.154
22,0%
Day Visitors
36.888
3,5%
Total Projected Tourists
1.056.451
-share of total Cyprus tourists
17,0%
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Tourist accommodation development The total supply of tourist accommodation keys required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in Ayia Napa to +/- 4,4 (an increase of 0,9 points on the current situation), needs to be between 11.795 and 14.417 keys. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government). Table 272. Tourist accommodation projection for Ayia Napa (2030)
Accommodation Category
2015 keys
2030 keys
New keys
8.031
8.778 -10.728
747-2.697
0
1.756-2146
1.756-2.146
- 5*
920
2.633-3219
1.713-2.299
- 4*
2.773
2.194-2682
(-579) –(-91)
- 3*
4.338
2.194-2.682
(-2.144) – (-1.656)
463
437-535
(-26)-72
- 2*
438
411-503
(-27)-65
- 1*
25
26-32
1-7
830
772-944
(-58) – (-114)
d. Guest Houses
3
206-252
203-249
e. Campsites
0
103-125
103-125
1.499-1.832
1.499-1.832
11.795-14.417
2.468-5.090
a. Hotels / Hotel Apartments - 5* Grand Luxury
b. Inns (1 & 2 stars)
c. Special Lodging
f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f)
9.327
g. Unlicensed keys regularised
(-1.296) –(-1.584)
h. Development pipeline
267
New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position 31st
905 - 3.239 21,6%
17,0%
11,1%
3,5
4,4
+0,9
Source: CTO, Units, and beds in operation at December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
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New tourist accommodation The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 905 and 3.239, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The contribution to the increased accommodation supply of the licensing of previously unlicensed accommodation, in the various categories to which this applies, ranges between 1.296 and 1.584 keys. Tourist accommodation projects in the development pipeline THR research has revealed that 267 new tourist accommodation keys will be provided by projects that are already in planning or construction in the Ayia Napa area. These are understood to being provided by the development of a proposed 5* hotel – no further information is known. Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 4,4 has created a need for between 1.747 and 2723 existing 3* and 4* keys to be upgraded to or 5* or 5* Grand Luxury.
Development land Coastal development land has been identified without further elongating the cluster This is primarily in two areas as indicated on the map. The respective areas have been chosen because of their identified key attributes: •
Coastal locations;
•
Close to new Ayia Napa Marina, Makronissos Beach, and Water World;
•
Good access from the existing road network;
•
No expected limitations on locally available infrastructure (utility services);
•
In or adjacent to designated tourism development zone(s);
•
Adjacent tourist assets can benefit from the development of the area into a new 4th generation resort;
•
No expected complicated construction implication.
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696
Figure 243. Potential development locations in Ayia Napa
Source: Elaborated from geographic data provided by Government of Cyprus, Ministry of Interior â&#x20AC;&#x201C; Dept. of Lands & Surveys Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
2.2.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Ayia Napa has several services demands to meet the needs and expectations of its tourists. Table 273. Tourism services improvement needed in Ayia Napa Category
Effort needed
Accommodation
44400
Retail
44440
Leisure
44000
Public Transport
44440
Experiential System
44440
Gastronomy
44400
Interpretation Centres
44440
Tourist Information
44440
Tour Guides & Attractions Personnel
44440
Destination Management Companies
44440
Note: Effort needed graded from 1 (less) to 5 (more).
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
697
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services in Ayia Napa. Table 274. Utility service requirements in Ayia Napa (2015 and 2030) Tourists
Overnights
Potable Water Annual
Peak
Waste Water Ann.
Peak
Electricity Ann.
Peak
Solid Waste Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
474.555
3.286
657.200
3.286
525.760
2.629
45.014
225
4.276
21
2030
787.409
4.986
997.132
4.986
797.706
3.989
68.297
341
6.488
32
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure The suggested potential locations are all adjacent to the existing road network, and therefore there should be no road investment implications on the government. The road requirements of specific developments cannot be identified until master planning of the respective areas has been carried out.
2.2.4. Improvements to the built environment The urban environment in Ayia Napa has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 275. Urban environment improvement needed in Ayia Napa Category
Effort needed
Street Vegetation
44400
Wayfinding and Directional Signage
44440
Visual Pollution
44440
Buildings Restoration
44400
Street Furniture
44440
Street Lighting
44440
Street Cleanliness
44440
Waste Collection Bins
44440
Waste Recycling
44440
Master Planning
44440
Note: Effort needed graded from 1 (less) to 5 (more).
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
698
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
2.2.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 276. Action plan for Ayia Napa integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation:
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
699
Table 277. Stakeholders for Ayia Napa integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 278. Estimated budget for the implementation in Ayia Napa (Millions) Phase 1
Phase 2
Phase 3
Phase 4
Total
%
Concept
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
11-13
16-20
17-21
16-19
60-73
65%
c. Infrastructure & Utilities
99-121
165-201
198-241
198-241
658-805
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
53-64
80-98
128-156
241-295
502-614
0%
e. Real Estate (including hotel serviced units)
76-93
123-150
163-199
218-266
579-707
0%
Total
238-291
383-469
505-618
672-822 1.799-2.199
Note: All numbers have been rounded up, therefore slight differences might appear
Updated version 23.03.2017
8%
CYPRUS TOURISM STRATEGY
700
Larnaca District
2.3
â&#x20AC;˘
Larnaca Suburbs
City
â&#x20AC;˘
Coastal Larnaca
and
Larnaca
2.3.1 Tourism segments to be developed Snapshot of the current situation Larnaca is the capital of the eponymous district, and the third largest city in Cyprus. The city is home to the country's main airport, as well as having an important seaport and marina. In Larnaca city and suburbs, the key tourism assets are Foinikoudes Promenade, the Church of Saint Lazarus, Hala Sultan Tekke, Kamares Aqueduct, the medieval fort, and the Salt Lake. The Salt Lake fills with water during the winter, becoming home to flocks of flamingos that stay there until approximately end of March.
Tourist demand In 2015, Larnaca District attracted 278.520 international tourists. Between 2011 and 2015, the number of international tourist arrivals has increased from 242.494 to 278.520. This has maintained the position of Larnaca as the chosen destination of just over 10% of international tourists. Table 279. Evolution of international tourist arrivals in Larnaca (2011- 2015) 2011
2012
2013
2014
2015
Larnaca
242.494
227.629
207.761
255.671
278.520
-share %
10,14%
9,24%
8,64%
10,47%
10,47%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014.
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CYPRUS TOURISM STRATEGY
701
The 3 main source markets for Larnaca accounted for only 54% of the international tourist arrivals. Table 280. Top 3 source markets for Larnaca (2014) Source market
Share of arrivals
United Kingdom
33,1%
Russia
12,0%
Israel
8,7%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of the tourism performance of Larnaca District in 2015 is tabulated below. Table 281. Tourism performance in Larnaca (2015) Tourism Performance 2015 International Tourists
Larnaca District 278.520
share of total international tourist arrivals (%)
10,5%
International Tourist Expenditure - (Euro millions)
133,12
share of total international tourist expenditure (%) Total Tourist Overnights share of total tourist overnights stays (%) â&#x20AC;&#x201C; by District International Tourist Overnight Stays average Length of Stay â&#x20AC;&#x201C; International Tourists (nights)
6,3% 843.000 6,3% 791.002 2,84
Domestic Tourist Overnight Stays
51.998
Estimated Annual Occupancy Rate (%)
39,2%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
Accommodation supply Larnaca District had a total supply of 3.154 tourist accommodation keys (5.896 beds) at the end of 2015. This is the number upon which the projected future supply has been calculated. Table 282. Accommodation supply in Larnaca District (2015) Accommodation Supply 2015
Larnaca District
Total Keys (licensed)
3.154
- national share of licensed keys (%)
7,3%
Total Beds (licensed)
5.896
- national share of licensed beds (%)
7,3%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
702
The number of ‘unlicensed’ hotel accommodation keys is approximately 292. However, this is only based on a proportional distribution ratio, and therefore the actual number may differ. Larnaca tourism comprises both the city and suburbs, and the coastal part of the district south west of the city. From this point on, this section of the document is therefore divided into the two separate areas of the district.
Vision and elements in favour and against it Vision 2030: Larnaca City and Suburbs will be Cyprus’s premier sporting, health, and active lifestyle destination.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 283. Elements supporting and limiting Larnaca City and Suburbs Vision In favour of the Vision
Against the Vision
• Proximity to Larnaca International Airport – easy access to accommodation and supporting facilities and services.
• Proximity to Larnaca International Airport – perceived likelihood of disturbance from aircraft movements.
• Proposed redevelopment of Larnaca Port & Marina.
• Poorer beach quality than some other locations.
• Hospitality accommodation upgrades / redevelopments in recent years.
• High traffic volumes on main urban promenade.
• Availability of land that is wholly appropriate to recommended developments.
• Larnaca is known more as the city to arrive and depart Cyprus rather than to stay and enjoy.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
703
Segments to be developed The positioning of Larnaca City and Suburbs is recommended as follows: 1 Geo-target
2
Frame of Reference
• International
4
4
4
• Domestic
4
4
0
• Larnaca city and suburbs will be a very desirable urban tourism cluster because we offer a diverse portfolio of active and passive holiday experiences to all generations of tourists.
3 Products
Sun & Sea
4
Points of Difference
MultiGenerational Activity
Sailing / Boating
Health & Wellness
Nature
• The measures specified below will create the differentiation and customer value proposition required. This will achieve an enhanced quality standard of 4,0.
To attract, and satisfy the demands of the projected increased number of tourist arrivals, Larnaca City and Suburbs should focus its attention on developing (and or redeveloping/upgrading) the following product segments. Table 284. Recommendations by product segment for Larnaca City and Suburbs Product Segment
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. Beaches could be themed to have more focused appeal to different age groups and desires (including adults & families).
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
Product Segment
704
Recommended approach • Multi-generational vacations combine family time and vacation time enjoying activities that are well-suited for different ages.
Multi-generational activity
• Sharing cultural enrichment and new places, enjoying a relaxing time, fun in the sun, or outdoor sports and activities, are possibilities for every one’s preferences. • A variety of dining and sightseeing choices as well as sports, games, crafts, and activities, that cater to all ages and child care, are products to be promoted and developed
Sailing/Boating
• The Larnaca marina with docking facilities and commercial spaces will contribute to offer the greatest impetus to this segment. There is no better way to appreciate the beauty of the Cyprus coastline than from a boat through licensed charter companies and state of the art facilities.
Water sports
• As a beach destination, the offer of water sports should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus.
Nature
• The natural environment is the greatest asset that the Salt Lake provides. The area must be protected, and all product development or upgrading must be carried out lightly and sensitively. The Salt Lake and Hala Sultan Tekke should be used to create and upgrade a range of trails and routes for the benefit of tourists.
2.3.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Larnaca City and Suburbs can grow to 512.689 tourists per annum, of which 382.125 (74,5%) are expected to be international tourists, and 112.663 (22%) Domestic. Table 285. Projected growth in tourist arrivals in Larnaca City and Suburbs (2030) Tourist Arrivals
Larnaca City and Suburbs
International Tourists
382.125
74,5%
Domestic Tourists
112.663
22,0%
Day Visitors
17.901
3,5%
Total Projected Tourists
512.689
share of total Cyprus tourists
Updated version 23.03.2017
8,3%
CYPRUS TOURISM STRATEGY
705
Tourist accommodation development plan To total supply of tourist accommodation keys required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in Larnaca City and Suburbs to +/- 4,0 (an increase of 0,5 points on 2015) needs to be between 5.724 and 6.996 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers);
•
Regularising the position of currently unlicensed accommodation (by government). Table 286. Tourist accommodation projection for Larnaca City and Suburbs (2030)
Accommodation Category
2015 keys
2030 keys
New keys
a. Hotels / Hotel Apartments
2.141
4.147-5.069
2.006-2.928
0
291-355
291-355
- 5*
209
1.244-1.520
1.035-1.311
- 4*
1.205
1.576-1.926
371-721
- 3*
727
1.037-1.267
310-540
431
400-488
(-31) - 57
- 2*
409
380-464
(-29)-55
- 1*
22
20-24
(-2)-2
c. Special Lodging
53
150-184
97-131
d. Guest Houses
266
250-306
(-16) - 40
0
50-62
50-62
727-889
727-889
5.724-6.996
2.833-4.105
- 5* Grand Luxury
b. Inns (1 & 2 stars)
e. Campsites f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f)
2.891
g. Unlicensed keys regularised
(-164) – (-201)
h. Development pipeline
(-200)
New Total Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position 31st
2.469 – 3.704 6,7%
8,3%
10,1%
3,5
4,0
+0,5
Source: CTO, Units, and beds in operation at December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
706
New tourist accommodation The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 2.469 and 3.704, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation (intended to be 80% of the existing total number of unlicensed hotel units in Cyprus), in the various categories to which this applies, will contribute between 164 and 201 keys to the increased accommodation supply in Larnaca City and Suburbs. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects currently in planning or construction in the Larnaca City and Suburbs area, however, it has been assumed that the proposed port and marina redevelopment will include some tourist accommodation, and a figure of 200 keys has been used in this document. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented. Other projects Redevelopment of Larnaca Port & Marina – is an exciting project that will make a significant impact on the city’s main waterfront area. The proposed content of the project has been reviewed, but it is recognised that as the project is at a relatively early planning stage, there may yet be changes. The Golf Course Project – is another large project proposed for the city and suburbs. The proposed location will make it an asset for city residents and second homeowners in the area. As a tourism asset, its benefit is more limited. Tourist accommodation to be upgraded or redeveloped No upgrading or redevelopment is necessary to achieve the elevated quality positioning, but this can still be encouraged to continue enhancing the quality of the city and suburban tourist accommodation product.
Development land ‘Frontline’ land for new waterfront development is limited. The largest development plot is the port and marina (referred to previously). THR has identified that there is an opportunity towards McKenzie Beach, and although the identified area is not large, it has the scope and potential for a development that is wholly appropriate to the city.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
707
Figure 244. Potential development locations in Larnaca (City & Suburbs):
Source: Elaborated from geographic data provided by the Ministry of Interior – Dept. of Lands & Surveys. Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
A potentially more exciting opportunity lies in the land adjacent to the Salt Lakes. This is considered to have the potential to develop a resort of a type that currently does not exist in Cyprus. It is envisaged that it would be an ideal location for a resort with a very high degree of environmental credentials (because of the sensitivity of the lakes). It would be ideal for the development of a health and wellness product together with a wide variety of leisure and sporting facilities, possibly even up to international training standards. These types of uses would all be wholly synergistic with the nature that would be available in abundance at varying times of the year. A summary of the key attributes of the identified respective potential development areas is: •
McKenzie Beach – adjacent to existing tourist accommodation and services;
•
Salt Lakes – unspoilt location far enough from the city with one of Cyprus’s best nature;
•
Excellent access from the existing road network;
•
Excellent access to airport, and future updated seaport;
•
No expected limitations on locally available infrastructure (utility services) in McKenzie. At Salt Lakes, it is likely that all necessary infrastructure would need to be installed from the nearest available sources;
•
Salt lakes could provide an environmentally-friendly health and sporting resort that would fit perfectly into existing product diversity plans;
•
City residents could also all benefit from the facilities and services;
•
Both sites would not have any complicated construction implications.
•
Guided tours of the city’s.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
708
2.3.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Larnaca has several services demands to meet the needs and expectations of its tourists. Table 287. Tourism services improvement needed in Larnaca City and Suburbs Category
Effort needed
Accommodation
44000
Retail
44000
Leisure
44000
Public Transport
44400
Experiential System
44440
Gastronomy
44400
Interpretation Centres
44400
Tourist Information
44400
Tour Guides & Attractions Personnel
44000
Destination Management Companies
44000
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services in Larnaca City and Suburbs. Table 288. Utility service requirements in Larnaca City & Suburbs (2015 and 2030) Tourists
Potable Water
Waste Water
Electricity
Solid Waste
Overnights
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
278.520
791
158.200
791
126.560
633
10.836
54
1.029
5
2030
382.125
2.420
484.000
2.420
387.200
1.936
33.151
166
3.149
16
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure The suggested potential location at McKenzie Beach is adjacent to the existing road network, and therefore there should be no road investment implications on the government. The road requirements of a specific development cannot be identified until master planning of the respective areas has been carried out.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
709
The suggested location at Salt Lake has an existing access road that will need to be upgraded to a modern specification single carriageway. The cost of this road upgrade will be subject to negotiation and agreement between government and the respective investor(s)/developer(s).
2.3.4 Improvements to the built environment The urban environment in Larnaca has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 289. Urban environment improvement needed in Larnaca City Category
Effort needed
Street Vegetation
44400
Wayfinding and Directional Signage
44400
Visual Pollution
44444
Buildings Restoration
44440
Street Furniture
44444
Street Lighting
44400
Street Cleanliness
44400
Waste Collection Bins
44400
Waste Recycling
44400
Master Planning
44400
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
710
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
2.3.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 290. Action plan for Larnaca City integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 291. Stakeholders for Larnaca City integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
711
Table 292. Estimated budget for the implementation in Larnaca City (Millions) Phase 1
Phase 2
Phase 3
Phase 4
Total
%
Concept
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
10-12
15-18
16-20
15-18
55-67
65%
c. Infrastructure & Utilities
91-111
151-185
181-222
181-222
604-739
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
48-59
74-90
118-144
221-270
461-563
0%
e. Real Estate (including hotel serviced units)
70-85
113-138
149-182
200-244
531-649
0%
Total
218-267
352-430
464-567
617-754 1.651-2.018
Note: All numbers have been rounded up, therefore slight differences might appear
Updated version 23.03.2017
8%
CYPRUS TOURISM STRATEGY
2.4
712
Coastal Larnaca
2.4.1. Tourism segments to be developed Snapshot of the current situation Along the coast (south west of the city), there are a few quaint traditional villages, and still further the area predominated by agriculture, with intermittent small scale developments, primarily residential real estate. The gives a very pleasant feeling of having entered rural, agricultural Cyprus, and of leaving hustle and bustle of the city, and its airport, well and truly behind. This is a largely undeveloped area (despite the number of zones that have been designated for tourism development), punctuated only by some residential real estate, and advertising hoardings for similar future development. The area is coastal, although without the best quality beaches, but still has charm, and is wholly representative of Cyprus. It is believed that the beaches are subject to erosion. No separate data is available on tourist arrivals in coastal and rural areas of Larnaca District.
Vision and elements in favour and against it Vision 2030: Larnaca Coastal will establish itself as leading new alternative for sun and beach holidays in Cyprus.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 293. Elements supporting and limiting Coastal Larnaca Vision In favour of the Vision
Against the Vision
• Proximity to Larnaca Airport and easy access to main road network.
• Potentially higher infrastructure development costs in undeveloped area.
• Larnaca city developments will be beneficial for the new coastal area to benefit from its reputation.
• Measures to protect against coastal erosion may be required (subject to detailed technical study).
• Availability of land that is appropriate to recommended developments.
• Occupies non-built frontline.
• The further development of tourism creates new employment opportunities in this rural area.
• Issues with local villages integration to Larnaca city and loss of their own identity.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
713
Segments to be developed The positioning of coastal Larnaca is recommended as follows: 1 Geo-target
2
Frame of Reference
• International
4
4
4
• Domestic
4
0
0
• Tourists visiting Coastal Larnaca will be offered a 21st century sun, beach, and leisure experience surrounded by Cypriot agriculture and rural life.
3 Products
Sun & Sea
4
Points of Difference
MultiGenerational Activity
Nature & Rural Life
Multi Sports Activity
• The measures specified below will create the differentiation and customer value proposition required. This will establish a quality standard for this new cluster of 3,5 to 4,0.
To attract, and satisfy tourist demands, Coastal Larnaca should focus its attention on developing (and or redeveloping/upgrading) the following product segments. To attract and satisfy the needs and expectations of current, and future, tourists in Larnaca Coastal, the following product segments should be enhanced and or developed/redeveloped. Table 294. Recommendations by product segment for Coastal Larnaca Product Segment
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. Beaches could be themed to have more focused appeal to different age groups and desires (including adults & families).
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
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Recommended approach • Multi-generational vacations combine family time and vacation time enjoying activities that are well-suited for different ages. Old town Zygi waterfront can be enhanced to provide a social meeting point.
Multi-generational activity
• Sharing cultural enrichment and new places, enjoying a relaxing time, fun in the sun, or outdoor sports and activities, are possibilities for every one’s preferences. • A variety of dining and sightseeing choices as well as sports, games, crafts, and activities, that cater to all ages and child care, are products to be promoted and developed.
Sailing/Boating
• The existing fishing harbour in Zygi could potentially play a greater role in promoting this segment. Tourists and locals could experience local traditions and sail along the coast.
Water sports
• As a beach destination, the offer of water sports should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus.
Multi-sports
• Larnaca coastal area can develop a suitable environment to attract tourists, as well as sports professionals, who are keen on getting in touch with nature, and interacting with the community to enjoy healthier and interactive holidays.
2.4.2 Guidelines for growth Projected tourism growth THR projects that Coastal Larnaca can attract 139.824 tourists per annum by 2030, of which 104.216 (74,5%) are expected to be international tourists, and 30.726 (22%) Domestic. Table 295. Projected growth in tourist arrivals in Coastal Larnaca (2030) Tourist Arrivals
Coastal Larnaca
International Tourists
104.216
74,5%
Domestic Tourists
30.726
22,0%
Day Visitors
4.882
3,5%
Total Projected Tourists share of total Cyprus tourists
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139.824 2,3%
CYPRUS TOURISM STRATEGY
715
Tourist accommodation development plan Even though there is some limited supply currently existing, Coastal Larnaca will effectively become a ‘new tourism area’ for Cyprus. The total supply of tourist accommodation keys required to accommodate the projected increase in tourist arrivals, and to establish a quality level of +/- 3,7, needs to be between 1.562 to 1.909 by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Regularising the position of currently unlicensed accommodation (by government). Table 296. Tourist accommodation projection for Coastal Larnaca (2030)
Accommodation Category
2015 keys
a. Hotels / Hotel Apartments
215
2030 keys
New keys
1.138-1.390
923-1.175
- 5* Grand Luxury
0
0-0
0-0
- 5*
0
284-348
284-348
- 4*
134
455-557
321-423
- 3*
81
398-486
317-405
48
109-133
61-85
- 2*
46
98-120
52-74
- 1*
2
11-13
9-11
c. Special Lodging
0
21-25
21-25
d. Guest Houses
0
82-100
82-100
e. Campsites
0
14-17
14-17
f. Serviced Units
0
198-242
198-242
263
1.562-1.909
1.299-1.646
b. Inns (1 & 2 stars)
Sub Total Keys – Licensed (a+b+c+d+e+f) g. Unlicensed keys regularised
(-15) - (-18)
h. Development pipeline
0
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
1.284 – 1.628 0,6%
2,3%
4,3%
3,3
3,7
+0,5
31st
Source: CTO, Units, and beds in operation at December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
As the official statistics, up to 2015 do not take this area into account as a separate entity, it has only been possible to define a basic unofficial breakdown from research carried out by THR.
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The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 1.284 and 1.628, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The number of previously unlicensed accommodation that need regularising in the Larnaca Coastal area ranges from 15 to 18 keys Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects currently in planning or construction in the Larnaca Coastal area. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented.
Development land A large amount of developable land is available in this area that could be used to develop a few mixed-use resorts as indicated in the map. Figure 245. Potential development locations Larnaca in (Mazotos & Coastal)
Source: Elaborated from geographic data provided by Government of Cyprus, Ministry of Interior â&#x20AC;&#x201C; Dept. of Lands & Surveys. Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
THR believes that an alternative opportunity exists, namely to create a Tourism Zone of National Interest (TZNI), indicated by the orange coloured ellipse on the map.
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The area is considered very suitable for either of these development types, chosen because of many key attributes: •
Easy access to Larnaca International Airport;
•
Unspoilt rural area;
•
In or close to designated tourism development zone(s);
•
Adjacent residential developments can benefit from the new resort(s) or TZNI;
•
No expected complicated construction implications.
2.4.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Coastal Larnaca has several services demands to meet the needs and expectations of its tourists. Table 297. Tourism services improvement needed in Coastal Larnaca Category
Effort needed
Accommodation
44000
Retail
44440
Leisure
44440
Public Transport
44440
Experiential System
44440
Gastronomy
44400
Interpretation Centres
44400
Tourist Information
44440
Tour Guides & Attractions Personnel
44440
Destination Management Companies
44444
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The increased number of tourist arrivals will put additional demands on utility services in the area.
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Table 298. Utility service requirements in Coastal Larnaca (2015 and 2030) Tourists 2030
Potable Water
Waste Water
Electricity
Solid Waste
Overnights
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
660
132.000
660
105.600
528
9.041
45
859
4
104.216
Note 1: With no specific data on international tourist arrivals and overnights in this area for 2015 it was not possible to calculate usage of utility services for 2015. Note 2: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure The suggested potential development location(s) in this area are all served by an existing road. At the initial stage of development this will be adequate to serve the needs of the area. At a later stage, as the annual number of tourists increases, there may be a need for the road to be upgraded.
2.4.4 Improvements to the built environment The urban environment in Larnaca Coastal has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 299. Urban environment improvement needed in Coastal Larnaca Category
Effort needed
Street Vegetation
44400
Wayfinding and Directional Signage
44440
Visual Pollution
44000
Buildings Restoration
44440
Street Furniture
44444
Street Lighting
44440
Street Cleanliness
44440
Waste Collection Bins
44440
Waste Recycling
44440
Master Planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government
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should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections. •
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
2.4.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 300. Action plan for Coastal Larnaca integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
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The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 301. Stakeholders for Coastal Larnaca integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 302. Estimated budget for the implementation in Coastal Larnaca (Millions) Concept b. Experiential System
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
4-5
6-8
7-8
6-8
23-28
65%
c. Infrastructure & Utilities
38-47
64-78
77-94
77-94
256-313
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
21-25
31-38
50-61
94-115
196-239
0%
e. Real Estate (including hotel serviced units)
30-36
48-58
63-77
85-104
225-275
0%
Total
93-113
149-183
197-241
262-320
701-856
Note: All numbers have been rounded up, therefore slight differences might appear
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8%
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721
Western Region Limassol District
3.1
•
Limassol Suburbs
City
•
Pissouri – Avdimou
•
Omodos
and
Limassol City and Suburbs
3.1.1 Tourism segments to be developed Snapshot of the current situation Limassol is the second largest urban area in Cyprus, its defacto ‘commercial capital’, and the island’s major sea port since 1974. Limassol is the largest ship management service centre in Europe with more than 60 ship management companies located in the city. Limassol was built between two ancient cities, Amathus and Kourion, and during Byzantine rule it was known as Neapolis (new town). The city’s historical centre is located around the medieval Limassol Castle and the Old Port. Despite its industrial drivers, tourism is an important sector for the city. In the recent past Limassol experienced a construction boom fuelled primarily by tourism. This included the development of the new marina, one of the island’s largest projects for many years. Government has also been pro-active in the city with new road construction tackling some of the traffic problems, and projects like the redesign of the city's promenade improving the quality of life for both residents and tourists. In quality positioning terms, Limassol District currently stands at 3,9. It is acknowledged that there is a broad range in quality when taking city, coastal and rural areas into account. The rural supply undoubtedly has the effect of decreasing the district’s quality position.
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Tourist demand Limassol District attracted 328.124 international tourists in 2015. There has been a gradual reduction in international tourists since 2011, until 2014 when it peaked at just over 301,000 arrivals. In percentage terms, Limassol’s share of international tourist arrivals represented 12,3% in 2015. Table 303. Evolution of international tourist arrivals in Limassol (2011- 2015) 2011
2012
2013
2014
2015
Limassol
295.879
281.004
260.247
301.205
328.124
- share %
12,37%
11,41%
10,82%
12,34%
12,34%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014
The 3 main source markets for Limassol accounted for almost 65% of the international tourist arrivals. Table 304. Top 3 source markets for Limassol (2014) Source market
Share of arrivals
Russia
32,9%
United Kingdom
24,4%
Greece
6,1%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of the tourism performance of Limassol District in 2015 is tabulated below. Table 305. Tourism performance in Limassol District (2015) Tourism Performance 2015 International Tourists
Limassol District 328.124
- share of total international tourist arrivals (%)
12,3%
International Tourist Expenditure - (Euro millions)
239,71
- share of total international tourist expenditure (%)
11,3%
Total Tourist Overnights - share of total tourist overnights stays (%) – by District International Tourist Overnight Stays - average Length of Stay – International Tourists (nights)
1.518.000 11,3% 1.424.366 4,34
Domestic Tourist Overnight Stays
93.634
Estimated Annual Occupancy Rate (%)
36,4%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015) Updated version 23.03.2017
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Accommodation supply Limassol District had a total supply of 6.035 tourist accommodation keys (11.419 beds) at the end of 2015. This is the number upon which the projected future supply has been calculated. Table 306. Limassol District: Accommodation Supply 2015 Accommodation Supply 2015
Limassol District
Total Keys (licensed)
6,035
- national share of licensed keys (%)
14,0%
Total Beds (licensed)
11.419
- national share of licensed beds (%)
14,0%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment
The number of ‘unlicensed’ hotel accommodation keys is approximately 514. However, this is only based on a proportional distribution ratio, and therefore the actual number may differ.
Vision and elements in favour and against it Vision 2030: Limassol city and suburbs will reinforce its position as the leading combined tourism and commercial centre of Cyprus.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 307. Elements supporting and limiting Limassol Vision In favour of the Vision
Against the Vision
• Limassol (city and suburbs) has already attained a quality positioning which can be built upon with relative ease.
• Balancing the non-tourism commercial needs of the city with those of tourism will always present challenges.
• 2. Potential location for the proposed new casino resort.
• The city has a limited amount of development land available, and will be constrained somewhat by the existence of the SBA.
• Limassol Marina has given the city a ‘first mover advantage’ towards marina customers over proposed other marina projects in other island locations.
• Traffic volume and other urban environment issues are not conducive to leisure tourism.
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Segments to be developed The positioning of Limassol City and Suburbs is recommended as follows: 1 Geo-target
Frame of 2 Reference
• International
4
4
0
• Domestic
4
4
0
• Our customers, primarily adults and older children, will choose Limassol city and suburbs because we offer a high quality, sophisticated product focused on sun, marine experiences, and a broad range of events and entertainment.
3 Products Sun & Sea
4
Points of Difference
Events
Sailing / Boating
Water sports
• The measures specified below will further differentiate Limassol and enhance its customer value proposition. This will give the city and suburbs an elevated quality standard of 4,6.
To attract and satisfy the needs and expectations of current, and future, tourists in Limassol City and Suburbs, the following product segments should be enhanced and or developed/redeveloped. Table 308. Recommendations by product segment for Limassol City and Suburbs Product Segment
Recommended actions • Maximum care and attention should be put into the further development of the Sun & Sea premium product. Beaches could be themed to have more focused appeal to different age groups and desires (including adults & families).
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
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Product Segment
Events
725
Recommended actions • Limassol as a major events destination requires not only accommodation facilities to host tourists but also an attractive shopping and leisure offer. An attractive calendar of events can contribute to increase demand in low seasons. • In a tourist location, an appropriate mix of retail outlets should include international, national, and local brands, in modern commercial centres and in traditional streetscapes.
Sailing/Boating
• The Limassol marina with docking facilities and commercial spaces will contribute to offer the greatest impetus to this segment. There is no better way to appreciate the beauty of the Cyprus coastline than from a boat through licensed charter companies and state of the art facilities.
Water sports
• As a beach destination, the offer of water sports should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus.
3.1.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Limassol City and Suburbs will grow to 683.586 tourists per annum, of which 509.500 (74.5%) are expected to be international tourists. This represents an increase of 170.000 on the number of international tourist arrivals in Limassol in 2015. Table 309. Projected growth in tourist arrivals for Limassol City and Suburbs (2030) Tourist Arrivals
Limassol City & Suburbs
International Tourists
509.500
74,5%
Domestic Tourists
150.217
22,0%
Day Visitors
23.869
3,5%
Total Projected Tourists
683.586
- share of total Cyprus tourists
11,00%
Tourist accommodation development plan The total supply of tourist accommodation keys required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in
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Limassol City and Suburbs to +/- 4,6 (an increase of 0,7 points on the current situation), needs to be between 7.632 and 9.328 by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government). Table 310. Tourist accommodation projection for Limassol City and Suburbs (2030)
Accommodation Category
2015 keys
a. Hotels / Hotel Apartments - 5* Grand Luxury - 5* - 4* - 3* b. Inns (1 & 2 stars) - 2* - 1* c. Special Lodging d. Guest Houses e. Campsites f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f) g. Unlicensed keys regularised h. Development pipeline Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
2030 keys
New keys
5.022 0 1.741 1.537 1.744 241 202 39 221 65 0
6.044-7.387 1.022-2.365 906-1108 906-1108 3.022-3.694 1.281-1.953 1.511-1.847 (-26) - 310 605-739 (-1.139)-(-1.005) 220-268 (-21)-(-27) 185-226 (-18)-(-24) 35-43 (-4) - 4 200-244 (-21)-(-23) 200-244 135-179 0-0 0-0
5.549
970-1.185 7.632-9.328
970-1.185 2.083-3.779 (-316) – (-386) (-305) 1.462 – 3.393
12,9%
11,0%
8,7%
3,9
4,6
+0,7
31st
Source: CTO, Units, and beds in operation at December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 1.462 and 3.393, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The contribution to the increased accommodation supply in Limassol City & Suburbs of the licensing of previously unlicensed accommodation (intended to be 80% of the existing total number of unlicensed hotel units in Cyprus), in the various categories to which this applies, will range from 316 to 386 keys. Tourist accommodation projects in the development pipeline THR research has revealed that 305 new tourist accommodation keys will be provided by projects that are already in planning or construction in the Limassol City and Suburbs area.
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These are understood to being provided by a Radisson Blu Hotel (105 keys), and a 200-key project by Stademos Hotels. Tourist accommodation to be upgraded or redeveloped Between 1.005 and 1.139 keys of 3* hotels need to be upgraded to 4*(minimum) or 5* to achieve the elevated quality position of 4,6*
Development land Linear coastal development around the bay waterfront over the years means that there is now a very limited supply of large sites that could be developed as mixed-use resorts. Many of the sites that appear to exist are more appropriate for the development of single tourism assets. Land to the west of the city, and away from the waterfront is seen to be undeveloped, but comparing this with other locations around the country, it is not considered to be preferred locations for the type of tourist accommodation that is required. It is therefore recommended that the accommodation growth in Limassol (city & suburbs) is achieved mainly be extensions and enhancements to existing assets. The respective area(s) has been chosen because of their identified key attributes: •
Location - one with good quality beach;
•
Good access from the existing road network;
•
No expected limitations on locally available infrastructure (utility services);
•
Proximity to planned new Limassol Marina;
•
In designated tourism development zone(s);
•
Adjacent residential developments can benefit from new resort assets;
•
Adjacent tourist assets can also benefit from the development of a new 4th generation resort.
3.1.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Limassol has several services demands to meet the needs and expectations of its tourists.
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Table 311. Tourism services improvement needed in Limassol City and Suburbs Category
Effort needed
Accommodation
44000
Retail
44000
Leisure
44400
Public Transport
44400
Experiential System
44440
Gastronomy
44440
Interpretation Centres
44440
Tourist Information
44440
Tour Guides & Attractions Personnel
44440
Destination Management Companies
44444
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services in Limassol City and Suburbs. Table 312. Utility service requirements in Limassol City and Suburbs (2015 and 2030) Tourists
Overnights
Potable Water Annual
Peak
Waste Water Ann.
Peak
Electricity Ann.
Peak
Solid Waste Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
328.124
1.424
284.800
1.424
227.840
1.139
19.507
98
1.853
9
2030
509.500
3.226
645.200
3.226
516.160
2.581
44.192
221
4.198
21
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure The city of Limassol has an extensive road network, and therefore it is not considered that any new road investment will be necessary to accommodate new tourist accommodation or tourism services development.
3.1.4 Improvements to the built environment The urban environment in Limassol has been assessed based on first-hand experience by THR. The following items should be the focus of attention.
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Table 313. Urban environment improvement needed in Limassol City and Suburbs Category
Effort needed
Street Vegetation
44444
Wayfinding and Directional Signage
44440
Visual Pollution
44444
Buildings Restoration
44440
Street Furniture
44440
Street Lighting
44440
Street Cleanliness
44400
Waste Collection Bins
44400
Waste Recycling
44400
Master Planning
44400
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
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3.1.5. Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 314. Action plan for Limassol City and Suburbs integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 315. Stakeholders for Limassol City and Suburbs integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement.
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Table 316. Estimated budget for the implementation in Limassol City and Suburbs (Millions) Concept
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
8-10
12-15
13-16
12-15
46-57
65%
c. Infrastructure & Utilities
77-94
128-156
153-187
153-187
511-624
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
41-50
62-76
99-121
187-229
389-476
0%
e. Real Estate (including hotel serviced units)
59-72
95-116
126-154
169-206
449-549
0%
Total
184-225
297-364
392-479
521-637 1.395-1.705
Note: All numbers have been rounded up, therefore slight differences might appear
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8%
CYPRUS TOURISM STRATEGY
3.2
732
Pissouri - Avdimou
3.2.1. Tourism segments to be developed Snapshot of the current situation Avdimou and Pissouri are located 30 Km west of Limassol, between Limassol and Pafos. Its administrative area is the third biggest in Limassol District. The village of Pissouri is about 3 Km away from Cape Aspro Bay on the side of a hill. Current development of Pissouri bay area has created two distinct communities, Pissouri Village, and Pissouri Bay. The total permanent population is around 1.100 people, about half of whom are Cypriots, the rest foreigners - mainly British (residents and visitors). In the village, there are several shops, two bank branches, and many taverns, restaurants, and bars, whilst in the bay area, the most renowned properties are Columbia Beach Resort (one of Cyprus’s leading luxury hotels), and Columbia Beach Hotel (4*). Avdimou Bay is an even more interesting prospect, with one of the best quality stretches of beach in Cyprus. Although most of the area is in the Akrotiri SBA, the agreement made between the Cyprus and British Governments in January 2014, opened the opportunity for landowners to embark on commercial property ventures. As Avdimou is not in one of the specific ‘militarised areas’, it is believed that the coastal area can be developed for tourism purposes as part of this inter-governmental agreement. No separate data is available on tourist arrivals in coastal and rural areas of Limassol District.
Vision and elements in favour and against it Vision 2030: Pissouri - Avdimou will become one of Europe’s leading mixeduse resorts.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 317. Elements supporting and limiting Pissouri - Avdimou Vision In favour of the Vision
Against the Vision
• Midway between Larnaca and Pafos International Airports, next to A6 highway, optimises air and road access options for tourists.
• Development to date appears to have been undertaken without a master plan.
• Fantastic beach at Avdimou.
• Limited beach area in Pissouri Bay area
• The development of the cluster began in recent years giving it an existing brand awareness.
• The assembly of a sufficiently large development area may be complex and time consuming.
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Segments to be developed The positioning of Pissouri - Avdimou is recommended as follows: 1 Geo-target
2
Frame of Reference
• International
4
4
4
• Domestic
4
4
0
• Our customers will choose Avdimou – Pissouri because we offer a fully integrated tourist experience with a range of accommodation, sport, leisure, and recreational options, supported by the services that sophisticated tourists of all ages demand – comparable with other integrated mixed-use resorts in Europe and around the world.
3 Products
Sun & Sea
4
Points of Difference
MultiGenerational
Golf
Water sports
Nature
Activity
• The measures specified below will develop and differentiate Pissouri Avdimou to becoming an exceptional mixed-use resort. This will give the existing area an elevated quality standard of 4,0.
To attract and satisfy the needs and expectations of current, and future, tourists in AvdimouPissouri, the following product segments should be enhanced and or developed/redeveloped.
Table 318. Recommendations by product segment for Pissouri - Avdimou Product Segment
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. Beaches could be themed to have more focused appeal to different age groups and desires (including adults & families).
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
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Product Segment
734
Recommended approach • Multi-generational vacations combine family time and vacation time enjoying activities that are well-suited for different ages.
Multi-generational activity
• Sharing cultural enrichment and new places, enjoying a relaxing time, fun in the sun, or outdoor sports and activities, are possibilities for every one’s preferences. • A variety of dining and sightseeing choices as well as sports, games, crafts, and activities, that cater to all ages and child care, are products to be promoted and developed
Golf
• Golf tourism targets tourists that are travelling with the main purpose of playing golf, the development of a cluster can contribute to gain international visibility. Several operators within a close distance will benefit from offering related products, and work together to provide a unique experience.
Water sports
• As a beach destination, the offer of water sports should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus.
Cypriot Food & Wine
• Tourists can experience traditional meze; a large selection of delicacies consisting of many dishes with small helpings of delicious foods in a unique local and traditional ambiance restaurant catered with local products.
3.2.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Avdimou – Pissouri can grow into a cluster attracting 714.658 tourists per annum, of which 532.659 (74,5%) are expected to be international tourists. Table 319. Projected growth in tourist arrivals for Pissouri - Avdimou (2030) Tourist Arrivals
Avdimou
International Tourists
532.659
74,5%
Domestic Tourists
157.045
22,0%
Day Visitors
24.954
3,5%
Total Projected Tourists
714.658
- share of total Cyprus tourists
11,00%
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735
Tourist accommodation development plan The total supply of tourist accommodation to accommodate the projected number of tourist arrivals, and to establish a quality level of tourist accommodation in Pissouri - Avdimou of +/4,0 (an increase of 0,3 points on the current situation), needs to be between 7.979 to 9.753 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government). Table 320. Tourist accommodation projection for Pissouri - Avdimou (2030)
Accommodation Category
2015 keys
2030 keys
New keys
a. Hotels / Hotel Apartments
459
6.324-7.730
5.865-7.271
- 5* Grand Luxury
0
316-386
316-386
- 5*
95
1.960-2.396
1.865-2.301
- 4*
171
2.213-2.705
2.042-2.534
- 3*
193
1.834-2.242
1.641-2.049
27
69-85
42-58
- 2*
23
41-51
18-28
- 1*
4
28-34
24-30
c. Special Lodging
0
49-59
49-59
d. Guest Houses
0
453-553
453-553
e. Campsites
0
69-85
69-85
f. Serviced Units
0
1.014-1.239
1.014-1.239
486
7.979-9.753
7.493-9.267
b. Inns (1 & 2 stars)
Sub Total Keys – Licensed (a+b+c+d+e+f) g. Unlicensed keys regularised
(-28) – (-34)
h. Development pipeline
-0
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
7.459 – 9.239 1,1%
11,5%
24,2%
3,7
4,0
+0,3
31st
Source: CTO, Units, and beds in operation at December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 7.459 and 9.239, considering the unlicensed keys regularised and the development pipeline.
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Unlicensed accommodation The licensing of previously unlicensed accommodation, in the various categories to which this applies, will contribute just between 28 and 34 keys to the increased supply. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects in planning or construction in the Pissouri - Avdimou area. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented. Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 4,0 does not create the need for any substantive upgrading and redevelopment of existing keys.
Development land The amount of undeveloped land, and the extent of the designated tourism zoning that already exists for Pissouri suggests that government has always had the intention of developing the area as a large tourism development area. THR believes this area should be given first consideration in terms of its potential to create Cyprus’s new Tourism Zone of National Interest (TZNI) - in other words, an area with medium and small resorts, all together more than 6.000 keys (tourist accommodation and residential real estate). The area has been chosen because of the identified key attributes: •
Access to A6 motorway;
•
Vast expanse of undeveloped land;
•
Good quality beaches at Pissouri Bay and Avdimou Bay;
•
Existing tourism assets and residential real estate will benefit from the expanded range of facilities and services;
•
Designated tourism zoning for a large-scale tourism development area;
•
Easy access to Pafos (west) and Limassol (east);
•
Between Pafos and Larnaca Airports.
The plan below provides a conceptual example of how Pissouri – Avdimou could be planned as a Tourism Zone of National Interest (TZNI).
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Figure 246. Potential TZNI location in Pissouri - Avdimou
Source: Elaborated from geographic data provided the Ministry of Interior – Dept. of Lands & Surveys.
Figure 247. Preliminary concept land use plan for Pissouri - Avdimou
Source: Elaborated from geographic data provided the Ministry of Interior – Dept. of Lands & Surveys
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3.2.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Pissouri - Avdimou has several services demands to meet the needs and expectations of its tourists. Table 321. Tourism services improvement needed in Pissouri - Avdimou Category
Effort needed
Accommodation
44444
Retail
44444
Leisure
44444
Public Transport
44444
Experiential System
44444
Gastronomy
44444
Interpretation Centres
44444
Tourist Information
44444
Tour Guides & Attractions Personnel
44444
Destination Management Companies
44444
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The establishment of Avdimou â&#x20AC;&#x201C; Pissouri as a new major tourism area will create new demands on utility services. Table 322. Utility service requirements in Pissouri - Avdimou (2015 and 2030) Tourists 2030
532.659
Potable Water
Waste Water
Electricity
Solid Waste
Overnights
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
3.373
674.600
3.373
539.680
2.698
46.205
231
4.390
22
Note 1: With no specific data on international tourist arrivals and overnights in this area for 2015 it was not possible to calculate usage of utility services for 2015. Note 2: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure The development area has a road network that is adequate for the current level of use by residents and tourists. The new tourism development will demand that some new roads are built, and existing roads are upgraded.
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It is estimated that approximately 7 kilometres of new and or upgraded road development will be required. All other more ‘internal’ roads should be the development responsibility of the respective investors/developers.
3.2.4 Improvements to the built environment The urban environment in Avdimou-Pissouri has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 323. Urban environment improvement needed in Pissouri - Avdimou Category
Effort needed
Street Vegetation
44444
Wayfinding and Directional Signage
44444
Visual Pollution
44444
Buildings Restoration
44444
Street Furniture
44444
Street Lighting
44444
Street Cleanliness
44444
Waste Collection Bins
44444
Waste Recycling
44444
Master Planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
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â&#x20AC;˘
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
â&#x20AC;˘
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
3.2.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 324. Action plan for Pissouri - Avdimou integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 325. Stakeholders for Pissouri - Avdimou integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement.
Updated version 23.03.2017
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741
Table 326. Estimated budget for the implementation in Pissouri - Avdimou (Millions) Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
23-29
35-43
39-47
35-43
133-162
65%
c. Infrastructure & Utilities
219-268
365-446
438-535
438-535
1.460-1.784 16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
117-143
178-218
284-347
535-653
1.113-1.361 0%
e. Real Estate (including hotel serviced units)
168-205
272-332
360-441
483-590
1.283-1.568 0%
Total
527-645
850-1039 1.121-1.370 1.491-1.822 3.989-4.876
Concept b. Experiential System
Note: All numbers have been rounded up, therefore slight differences might appear
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8%
CYPRUS TOURISM STRATEGY
3.3
742
Omodos
3.3.1 Tourism segments to be developed Snapshot of the current situation Omodos is approximately 40 Km from Limassol (using the most direct route). The village has a distinctive charm and ambience, provided by its cobblestone square and paths, its mix of traditional taverns, and more modern bars housed in traditional buildings. It currently has a very limited supply of accommodation, but has an important 17th century stone-built monastery. The village is situated on Cyprus’s Wine Route 4 (Krasachoria of Lemesos), and is famous for its wine production, with an annual wine festival to present its production and quality. As stated previously it is imperative that any rural planning effort is focused in a small number of areas rather than using a ‘shotgun’ approach - trying to a little in lots of individual areas. Whilst it is acknowledged that the shotgun approach may be more popular politically, unless critical mass can be achieved in the chosen areas, the diversification into rural tourism will not reap the expected rewards. No separate data is available on tourist arrivals in coastal and rural areas of Limassol District.
Vision and elements in favour and against it Vision 2030: Omodos will be a prime location in defining Cyprus as a destination that provides rural tourism to comparable levels of desirability and quality as coastal tourism.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 327. Elements supporting and limiting Omodos Vision In favour of the Vision
Against the Vision
• A high degree of authenticity - in architectural and cultural terms.
• Land ownership issues may limit or delay the speed of new development.
• In the heart of Cyprus’s wine-growing region with an existing winery in the village.
• Investors may look for enhanced levels of government support to develop rural tourism.
• Experience of tourism (it appears to be currently a popular excursion destination).
• Local resident community may not fully embrace the growth of its village.
• Sufficiently accessible by road from Limassol or Pafos.
• Development costs may be higher due to location.
• Unique location offers a choice of excursions in the mountains or the coast.
• Great quality consistency, and competitive prices, needed.
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Segments to be developed The positioning of Omodos is recommended as follows: 1 Geo-target
• International
4
4
4
• Domestic
4
4
0
• 2
Frame of Reference
Our customers will choose Omodos because it is a genuine traditional Cypriot village that highlights many features previously undiscovered by island tourists – including viniculture, nature, natural produce, traditional music, and dance – all provided at modern day tourism standards.
3 Products Cypriot Traditional Music Gastronomy & Dance The measures specified below will prepare Omodos to become a very desirable rural tourism cluster. This will give the village an elevated quality standard of 3,75.
Viniculture •
Points of 4 Difference
Nature
To attract and satisfy the needs and expectations of current, and future, tourists in Omodos, the following product segments should be enhanced and or developed/redeveloped. Table 328. Recommendations by product segment for Omodos Product Segment
Recommended approach
Viniculture
• Cyprus has been a vine-growing and wine-producing country for millennia, tourists can experience the culture in well-planned routes visiting and tasting wine.
Nature
• The area must be protected, and all product development or upgrading must be carried out lightly and sensitively. The natural assets should be used to create and upgrade a range of trails and routes for the benefit of tourists and locals.
Cypriot Gastronomy
• Tourists can experience traditional meze; a large selection of delicacies consisting of many dishes with small helpings of delicious foods in a unique local and traditional ambiance restaurant catered with local products
Traditional Dance
Music
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&
• Cypriot traditional music is like the traditional music of Greece and includes dances like sousta, syrtos, tatsia, antikristos and zeimbekiko could be lived by tourists in evening events combined with local gastronomy.
CYPRUS TOURISM STRATEGY
744
3.3.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Omodos can grow into a rural tourism cluster attracting 93.216 tourists per annum, of which 69.477 (74,5%) are expected to be international tourists. Table 329. Projected growth in tourist arrivals for Omodos (2030) Tourist Arrivals
Omodos
International Tourists
69.477
74,5%
Domestic Tourists
20.484
22,0%
Day Visitors
3.255
3,5%
Total Projected Tourists
93.216
- share of total Cyprus tourists
1,5%
Tourist accommodation development plan The total supply of tourist accommodation to accommodate the projected number of tourist arrivals, and to establish a quality level of tourist accommodation in Omodos of +/- 3,8, needs to be between 1.040 and 1.272 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Regularising the position of currently unlicensed accommodation (by government).
Table 330. Tourist accommodation projection for Omodos (2030) 2015 Accommodation Category 2030 keys New keys keys 0 799-977 799-977 a. Hotels / Hotel Apartments - 5* Grand Luxury
0
80-98
80-98
- 5*
0
239-293
239-293
- 4*
0
280-342
280-342
- 3*
0
200-244
200-244
0
36-44
36-44
- 2*
0
31-37
31-37
- 1*
0
5-7
5-7
c. Special Lodging
0
18-22
18-22
d. Guest Houses
0
45-55
45-55
e. Campsites
0
9-11
9-11
b. Inns (1 & 2 stars)
f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f)
132-162 0
132-162
1.040-1.272 1.040-1.272
g. Unlicensed keys regularised
0
h. Development pipeline
0 1.040-1.272
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district
n/a
1,5%
Quality Position
n/a
3,8
Updated version 23.03.2017
3,3%
CYPRUS TOURISM STRATEGY
745
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 1.040 and 1.272, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation, in the various categories to which this applies, is not considered applicable in Omodos. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects in planning or construction in the Omodos area. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented.
Development land THR’s initial thoughts on the tourism development plan for Omodos is that it should focus on high quality ‘boutique’ accommodation that will attract discerning tourists seeking tranquillity, and simpler, value accommodation, that can attract ‘Millennials’ and nature/activity oriented tourists. A large amount of land appears to be available, in perfectly situated locations surrounding the village. This will ensure that the nucleus of the village remains perfectly intact, and will become the ‘village’ centre of a future, expanded, tourist village/resort.
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Figure 248. Potential development locations in Omodos
Source: Elaborated from geographic data provided by the Ministry of Interior – Dept. of Lands & Surveys Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
The respective locations within the village environs have been chosen because of their identified key attributes: •
Easy access into existing village – without use of motor vehicles;
•
Good access from the passing main road;
•
No expected major limitations on locally available infrastructure (utility services), accepting that there are regional limitations;
•
No expected complicated construction implications as land has only gently sloping topography.
3.3.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Omodos has several services demands to meet the needs and expectations of its tourists.
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Table 331. Tourism services improvement needed in Omodos Category
Effort needed
Accommodation
44440
Retail
44440
Leisure
44440
Public Transport
44440
Experiential System
44440
Gastronomy
44444
Interpretation Centres
44444
Tourist Information
44444
Tour Guides & Attractions Personnel
44444
Destination Management Companies
44444
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The establishment of Omodos as a new rural tourism area will create new demands on utility services in the village. Table 332. Utility service requirements in Omodos (2015 and 2030) Tourists 2030
69.477
Overnights
Potable Water Annual
Peak
(000s)
m3
440
88.000
Waste Water Ann.
Peak
m3
m3
440
70.400
Electricity
Solid Waste
Ann.
Peak
Ann.
Peak
m3
kWh
kWh
ton
ton
352
6.027
30
573
3
Note 1: With no specific data on international tourist arrivals and overnights in this area for 2015 it was not possible to calculate usage of utility services for 2015. Note 2: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure A good quality road already passes the village, with a minor road providing access into the residential and commercial area. It is highly likely that new access roads will be required to enable more direct access to development locations rather than all traffic being focused on the existing single entry/exit point. It is suggested that a generous allowance of 2 kilometres of new and road upgrades be allowed for this purpose. The cost of these enabling roads will be incurred by government unless alternative arrangements can be made with village investors/developers. A motorway connecting Limassol and Platres is currently in a preliminary design, if it finally goes forward it will help to reduce the travel time from Omodos to the coastal motorways. Any other â&#x20AC;&#x2DC;internalâ&#x20AC;&#x2122; roads should be the development responsibility of the respective investors/developers. The extensive use of roads should be restricted in favour of centralised parking and pedestrian or alternative light vehicles such as golf carts.
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3.3.4 Improvements to the built environment The urban environment in Omodos has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 333. Urban environment improvement needed in Omodos Category
Effort needed
Street Vegetation
44000
Wayfinding and Directional Signage
44440
Visual Pollution
44000
Buildings Restoration
44440
Street Furniture
44400
Street Lighting
44400
Street Cleanliness
44000
Waste Collection Bins
44000
Waste Recycling
44000
Master Planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
â&#x20AC;˘
749
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
3.3.5. Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 334. Action plan for Omodos integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 335. Stakeholders for Omodos integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
750
Table 336. Estimated budget for the implementation in Omodos (Millions) Concept b. Experiential System c. Infrastructure & Utilities
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
3-4
5-6
5-6
5-6
18-22
65%
30-37
50-62
60-74
60-74
201-246
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
16-20
25-30
39-48
74-90
154-188
e. Real Estate (including hotel serviced units)
23-28
38-46
50-61
67-81
177-216
117-143
155-189
206-251
Total
0%
73-89
550-673
Note: All numbers have been rounded up, therefore slight differences might appear
Updated version 23.03.2017
0% 8%
CYPRUS TOURISM STRATEGY
3.4
751
Pafos City and Suburbs
Pafos District •
Pafos City and Suburbs
•
Kathikas
•
Polis and Limni Bay
3.4.1 Tourism segments to be developed Snapshot of the current situation Pafos is a coastal city about 50 km west from Limassol and sheltered from the north by the Troodos mountains Historically, there were two locations called Pafos: Old Pafos and New Pafos. The currently inhabited city is New Pafos. The old was on the coast at Petra tou Romiou in the modern mythical birthplace of Aphrodite, the Greek goddess of love and beauty. In Greco-Roman times, Pafos was the island's capital, and it is well known for the remains of the Roman Governor's Palace with its fine mosaics. The city is included in the official UNESCO list of cultural and natural treasures of the world's heritage. Tourists to Pafos - primarily families and couples looking for sun and beach holidays - can arrive directly to the city thanks to its international airport, the country's second largest. Pafos’ selection as European Capital of Culture for 2017 should boost tourism in the city. Already the designation has benefitted the city with a large amount of investment put into its infrastructure and urban environment. Pafos also has the benefit of its proximity to Akamas Peninsula, offering tourists the opportunity to explore nature during their holidays whilst staying at the beach. Pafos is also an ideal base for golf tourists, being the nearest main centre to the golf courses that make up Cyprus’s existing golf cluster. However, this is an opportunity that has not yet been fully exploited. Pafos is another tourism cluster that has been subject to a large amount of linear coastal development. Development has taken place from the Geroskipou area of the city near the airport as far as Coral Bay on the northern side of the main centre. The quality positioning of Pafos City and Suburbs is currently calculated at 3,9. The inclusion of the rural areas, and many locations on Akamas Peninsula, will have negatively impacted on the city and suburbs from a numerical standpoint. A combination of assumptions, and research, has enabled a separate quality position of 2,6 to be calculated for Kathikas. Updated version 23.03.2017
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Tourist demand In 2015, Pafos attracted 965.450 international tourists – 99% of all tourist arrivals to Pafos District. No statistical data exists for Kathikas (or other Akamas locations) but it has been assumed that a small share of the overall Pafos City and Suburbs increase is attributable to these rural locations. Table 337. Evolution of international tourist arrivals in Pafos (2011- 2015) 2011 2012 2013 2014 2015 Pafos City Suburbs
and
799.550
878.516
881.814
886.246
965.450
33,43%
35,66%
36,66%
36,30%
36,30%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
- share % Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014.
The 3 main source markets for Pafos accounted for over 80% of the international tourist arrivals. Table 338. Top 3 source markets for Pafos (2014) Source market United Kingdom Russia Belgium
Share of arrivals 50,5% 29,7% 2,3%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of the tourism performance of Pafos City and Suburbs in 2015 is tabulated below. Table 339. Tourism performance in Pafos (2015) Tourism Performance 2015 International Tourists
Pafos 965.450
- share of total international tourist arrivals (%)
36,3%
International Tourist Expenditure - (Euro millions)
695,10
- share of total international tourist expenditure (%)
32,9%
Total Tourist Overnights - share of total tourist overnights stays (%) – by District International Tourist Overnight Stays - average Length of Stay – International Tourists (nights) Domestic Tourist Overnight Stays Estimated Annual Occupancy Rate (%) Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
Updated version 23.03.2017
4.401.760 32,9% 4.130.249 4,28 271.510 50,2%
CYPRUS TOURISM STRATEGY
753
Accommodation supply Pafos City and Suburbs had a total supply of 11.798 tourist accommodation keys (24.007 beds) at the end of 2015. Table 340. Accommodation supply in Pafos (2015) Accommodation Supply 2015
Pafos
Total Keys (licensed)
11.798
- national share of licensed keys (%)
27,3%
Total Beds (licensed)
24,007
- national share of licensed beds (%)
28,4%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment
The number of ‘unlicensed’ hotel accommodation keys is approximately 1.161. However, this is only based on a proportional distribution ratio, and therefore the number may differ.
Vision and elements in favour and against it Vision 2030: Pafos will be Cyprus’s foremost, year-round, tourism cluster, offering the most diverse range of tourist activities and experiences in Cyprus. The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 341. Elements supporting and limiting Pafos City and Suburbs Coastal Vision In favour of the Vision
Against the Vision
• Adjacency to Pafos International Airport and A6 highway.
• Already highly developed, with a limited amount of land available for new frontline coastal development.
• Proposed development of Poseidon Grand Marina.
• The sun and beach product is overriding all other types of available tourist products.
• Adjacency to Akamas Peninsula.
• The urban environment does not complement the existing quality level of the city, or its future uplift.
• Blue Flag quality beaches.
• Environmental restrictions to grow
• European City of Culture 2017
• Close to the airport landing path
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CYPRUS TOURISM STRATEGY
754
Segments to be developed The positioning of Pafos City and Suburbs is recommended as follows: 1 Geo-target
2
• International
4
4
4
• Domestic
4
4
0
• Our customers will choose Pafos City and Suburbs because of the quality of accommodation in our cluster, and the accessibility that it offers them to products that complement our primary sun and beach offer – history, nature, and golf that are not so easily available elsewhere in Cyprus.
Frame of Reference
3 Products Sun & Sea
4
History & Culture
Sailing / Boating & Water Sports
Nature
Golf
• The measures specified below will further differentiate Pafos City and Suburbs and enhance its customer value proposition. This will elevate its quality standard 4,5.
Points of Difference
To attract and satisfy the needs and expectations of current, and future, tourists in Pafos, the following product segments should be enhanced and or developed/redeveloped. Table 342. Recommendations by product segment for Pafos Product Segment
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. Beaches could be themed to have more focused appeal to different age groups and desires (including adults & families).
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity
History & Culture
Updated version 23.03.2017
• Pafos has a greater number of cultural tourist attractions that are could be better promoted in the district’s accommodation outlets, and their locations are not well signed for motorists or pedestrians. Enhancement of these cultural products should focus on marketing strategy and on the tangible aspects of the buildings and their exhibits.
CYPRUS TOURISM STRATEGY
755
Product Segment
Recommended approach
Sailing / Boating
• The new Pafos marina with docking facilities and commercial spaces will contribute to offer the greatest impetus to this segment. There is no better way to appreciate the beauty of the Cyprus coastline than from a boat through licensed charter companies and state of the art facilities.
Water sports
• As a beach destination, the offer of water sports should include from windsurfing to sea-kayaking and jet ski hire. The more adventurous can try water-skiing, wakeboarding, or paragliding. Licensed and well-trained operators should be fostered to develop their businesses in Cyprus.
Golf
• Golf tourism targets tourists that are travelling with the main purpose of playing golf, the development of a cluster can contribute to gain international visibility. Several operators within a close distance will benefit from offering related products, and work together to provide a unique experience.
3.4.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Pafos City and Suburbs will grow to 1.460.388 tourists per annum, of which 1.088.477 (74,5%) are expected to be international tourists. Table 343. Projected growth in tourist arrivals for Pafos City and Suburbs (2030) Tourist Arrivals Pafos City and Suburbs International Tourists 1.088.477 74,5% Domestic Tourists 320.919 22,0% Day Visitors 50.992 3,5% Total Projected Tourists 1.460.388 - share of total Cyprus tourists 23,5%
Tourist accommodation development plan The total supply of tourist accommodation to accommodate the projected number of tourist arrivals, and to elevate the quality level of tourist accommodation in Pafos City and Suburbs to +/- 4,50 needs to be between 16.305 to 19.929 keys. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government).
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
756
Table 344. Tourist accommodation projection for Pafos City and Suburbs (2030) Accommodation Category
2030 keys
New keys
9.697
11.397-13.929
1.700-4.232
0
1.709-2.089
1.709-2.089
- 5*
2.376
4.559-5.572
2.183-3.196
- 4*
5.141
3.989-4.875
(-1152)- (-266)
- 3*
2.180
1.139-1.393
(-1041)-(-787)
351
403-493
52-142
- 2*
204
242-296
38-92
- 1*
147
161-197
14-50
1.464
1.366-1.670
(-98) - 206
d. Guest Houses
122
854-1.044
732-922
e. Campsites
164
213-261
49-97
2.072-2.533
2.072-2.533
16.305-19.929
4.507-8.131
a. Hotels / Hotel Apartments - 5* Grand Luxury
b. Inns (1 & 2 stars)
c. Special Lodging
2015 keys
f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f)
11.798
g. Unlicensed keys regularised
(-671) -(-820)
h. Development pipeline
-415
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
3.421 – 6.896 27,3%
23,5%
18,8%
3,9
4,5
+0,6
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 3.421 and 6.896, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation, in the various categories to which this applies, will contribute between 671 and 820 keys to the increased accommodation supply in Pafos City and Suburbs. Tourist accommodation projects in the development pipeline THR research has revealed that 415 new tourist accommodation keys will be provided by projects that are already in planning or construction in the Pafos City and Suburbs area. These are understood to being provided by two projects in Pegeia, of 188 and 148 keys respectively, and an 80-key project in Geroskipou.
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757
Tourist accommodation to be upgraded or redeveloped The keys required to be upgraded to achieving the elevated quality position of 4,50 ranges from 1.152 to 2.292.
Development land ‘Frontline’ land for future coastal development is very limited. Some potential development areas have however been identified. These are in the Geroskipou area to the east of the city, and near Potima Bay to the north, as indicated on the map. The respective area(s) has been chosen because of their: •
Location – Geroskipou has a good quality beach;
•
Potima Bay is very near to the planned Poseidon Grand Marina and existing Ayia Trias harbour;
•
Good access from the existing road network;
•
No expected limitations on locally available infrastructure (utility services);
•
The area in Potima Bay is state owned land;
•
Geroskipou is in a designated tourism development zone; Figure 249. Potential development locations in Pafos
Source: Elaborated from geographic data provided by the Ministry of Interior – Dept. of Lands & Surveys
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CYPRUS TOURISM STRATEGY
758
Figure 250. Potential development location in Pafos – Geroskipou
Source: Elaborated from geographic data provided by the Ministry of Interior – Dept. of Lands & Surveys Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
Figure 21. Potential development location in Pafos – Potima Bay
Source: Elaborated from geographic data provided by the, Ministry of Interior – Dept. of Lands & Surveys Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
759
3.4.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Pafos City and Suburbs has several services demands to meet the needs and expectations of its tourists. Table 345. Tourism services improvement needed in Pafos City and Suburbs Category
Effort needed
Accommodation
44444
Retail
44000
Leisure
44440
Public Transport
44440
Experiential System
44440
Gastronomy
44444
Interpretation Centres
44400
Tourist Information
44440
Tour Guides & Attractions Personnel
44440
Destination Management Companies
44440
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services. Table 346. Utility service requirements in Pafos City (2015 and 2030) Tourists
Overnights
Potable Water
Waste Water
Electricity
Solid Waste
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
965.450
4.130
826.000
4.130
660.800
3.304
56.575
283
5.375
27
2030
1.088.477
6.892
1.378.400
6.892
1.102.720
5.514
94.411
472
8.969
45
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure Pafos is connected to the motorway network, therefore it will benefit from the extension of the motorway until Polis contributing to reduce travel times. The identified areas for tourism development are located north and south of Pafos Town connected through secondary roads to the main urban area. THR considers that these roads servicing the identified lands have an acceptable quality.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
760
From one side, the land in Pafos Geroskipou may require minor upgrades to allow easy access to the tourism development land. However, to service the land in Pafos – Potima Bay road pacification measures or a road realignment should be studied. Current road goes along the waterfront; therefore, it may become a barrier to connect tourism land and the beach. Road should be either pushed back inland to allow a direct access to from tourism development to the beach front, or pacified with pedestrian crossings and enforced speed limits to make the area safe for families with children. Any other ‘internal’ roads should be the development responsibility of the respective investors/developers.
3.4.4 Improvements to the built environment The urban environment in Pafos City and Suburbs has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 347. Urban environment improvement needed in Pafos City and Suburbs Category
Effort needed
Street Vegetation
44440
Wayfinding and Directional Signage
44444
Visual Pollution
44444
Buildings Restoration
44440
Street Furniture
44440
Street Lighting
44440
Street Cleanliness
44440
Waste Collection Bins
44440
Waste Recycling
44440
Master Planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
761
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
3.4.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 348. Action plan for Pafos City and Suburbs integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 349. Stakeholders for Pafos City and Suburbs integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association Updated version 23.03.2017
X
X
X
X
Informed
X X
X
X
X X
CYPRUS TOURISM STRATEGY
762
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 350. Estimated budget for the implementation in Pafos City and Suburbs (Millions) Phase 1
Phase 2
Phase 3
Phase 4
Total
%
Concept
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
18-22
27-33
29-36
27-32
100-122
65%
c. Infrastructure & Utilities
165-202
275-336
330-404
330-404
1.101-1.346
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
88-108
134-164
214-262
403-493
840-1.026
0%
e. Real Estate (including hotel serviced units)
127-155
205-251
272-332
364-445
968-1.183
0%
Total
398-486
641-784
845-1.033 1.124-1.374 3.008-3.677
Note: All numbers have been rounded up, therefore slight differences might appear
Updated version 23.03.2017
8%
CYPRUS TOURISM STRATEGY
3.5
763
Kathikas
3.5.1 Tourism segments to be developed Snapshot of the current situation Kathikas is one of the ‘Laona’ villages. It is situated on a plateau 23 Km north of the city, at an altitude of 645 metres, and on the edge of the Akamas Peninsula (National Park). It is well known for its grape production, most notably sultana grapes. The Laona Foundation was established to implement the Laona Project - completed in 1994. The project involved 5 villages on the border of Akamas National Park, and helped introduce the concept of ‘Agritourism’ to Cyprus through its activities. A total of 26 traditional buildings were restored, some visitor attractions were developed in each village, and several publications were produced. Since 1994 the Foundation has continued its activities, offering guidance to the people of Laona on a variety of issues including landscape. The ‘Laona Area’ has a variety of landscapes, from coastal to hill country. The project villages are namely Kathikas, Kritou Terra, Pano Akourdalia, Kato Akourdalia, and Miliou. No separate data is available on tourist arrivals in coastal and rural areas of Pafos District.
Vision and elements in favour and against it Vision 2030: Kathikas will be a key location that defines Cyprus as a destination offering rural tourism equally as desirable as its coastal tourism.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 351. Elements supporting and limiting Kathikas Vision In favour of the Vision
Against the Vision
• Adjacency to Akamas Peninsula.
• Difficult road access to Kathikas due to the congested B7.
• Authenticity of the village.
• Risk of losing identity if tourism grows without a plan.
• Close to unmatched natural and beach destinations.
• The urban environment does not complement the existing quality level of the village, or its future uplift.
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CYPRUS TOURISM STRATEGY
764
Segments to be developed The positioning of Kathikas is recommended as follows: 1 Geo-target
• International
4
4
4
• Domestic
4
0
0
• 2
Frame of Reference
Our customers will choose Kathikas because it will portray authentic Cypriot life, highlighting many features previously undiscovered by Cyprus tourists – namely its viniculture, nature, natural products, traditional music, and dance.
3 Products Cypriot Traditional Music Nature Gastronomy & Dance The measures specified below will further differentiate Kathikas and enhance its customer value proposition. This elevate its quality standard 3,0.
Viniculture •
Points of 4 Difference
To attract and satisfy the needs and expectations of current, and future, tourists in Kathikas, the following product segments should be enhanced and or developed/redeveloped. Table 352. Recommendations by product segment for Kathikas Product Segment
Recommended approach
Viniculture
• Cyprus has been a vine-growing and wine-producing country for millennia, tourists can experience the culture in well-planned routes visiting and tasting wine.
Nature
• The natural environment is the greatest asset that the Akamas area has. The area must be protected, and all product development or upgrading must be carried out lightly and sensitively. The natural assets should be used to create and upgrade a range of trails and routes for the benefit of tourists and locals.
Cypriot Gastronomy
• Tourists can experience traditional meze; a large selection of delicacies consisting of many dishes with small helpings of delicious foods in a unique local and traditional ambiance restaurant catered with local products
Traditional Music & Dance
• Cypriot traditional music is like the traditional music of Greece and includes dances like sousta, syrtos, tatsia, antikristos and zeimbekiko could be lived by tourists in evening events combined with local gastronomy.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
765
3.5.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Kathikas will grow to 62.144 tourists per annum, of which 46.318 (74,5%) are expected to be international tourists. Table 353. Projected growth in tourist arrivals for Kathikas (2030) Tourist Arrivals
Kathikas
International Tourists
46.318
74,5%
Domestic Tourists
13.656
22,0%
Day Visitors
2.170
3,5%
Total Projected Tourists
62.144
- share of total Cyprus tourists
1,0%
Tourist accommodation development plan The total supply of tourist accommodation to accommodate the projected number of tourist arrivals, and to elevate the quality level of tourist accommodation in Kathikas to +/- 3,0, needs to be between 694 to 848 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government).
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
766
Table 354. Tourist accommodation projection for Kathikas (2030) Accommodation Category a. Hotels / Hotel Apartments
2015 keys
2030 keys
New keys
40
204-250
164-210
- 5* Grand Luxury
0
10-12
10-12
- 5*
0
41-50
41-50
- 4*
0
82-100
82-100
- 3*
40
71-87
31-47
23
164-200
141-177
- 2*
23
148-180
125-157
- 1*
0
16-20
16-20
c. Special Lodging
0
18-22
18-22
d. Guest Houses
8
158-193
149-184
e. Campsites
0
62-76
62-76
88-108
88-108
694-848
623-777
b. Inns (1 & 2 stars)
f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f)
71
(-4) – (-5)
g. Unlicensed keys regularised h. Development pipeline
0
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
618 -773 0,2%
1,0%
2,0%
2,6
3,0
+0,4
Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 618 and 773, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation, in the various categories to which this applies, will contribute from 4 to 5 keys to the increased accommodation supply in Kathikas. Tourist accommodation projects in the development pipeline THR research has revealed that there are no developments in the pipeline. Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 3,0 has not created a need for existing keys to be upgraded.
Development land THR’s initial thoughts on the tourism development plan for Kathikas (Akamas) and for Omodos is that it should focus on high quality ‘boutique’ accommodation that will attract discerning
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767
tourists seeking tranquillity, and simpler, value accommodation, that can attract ‘Millennials’ and nature/activity oriented tourists. A large amount of land appears to be available, in perfectly situated locations surrounding the village. This will ensure that the nucleus of the village remains perfectly intact, and will become the ‘village’ centre of a future, expanded, tourist village/resort. The respective locations within the village environs have been chosen because of their identified key attributes: •
Easy access into existing village – without use of motor vehicles;
•
Good access from the passing main road;
•
No expected major limitations on locally available infrastructure (utility services), accepting that there are regional limitations;
•
No expected complicated construction implications as land has only gently sloping topography. Figure 251. Potential development locations in Kathikas (Akamas)
Source: Elaborated from geographic data provided by the Ministry of Interior – Dept. of Lands & Surveys. Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
3.5.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Kathikas has several services demands to meet the needs and expectations of its tourists.
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768
Table 355. Tourism services improvement needed in Kathikas Category
Effort needed
Accommodation
44400
Retail
44440
Leisure
44440
Public Transport
44440
Experiential System
44444
Gastronomy
44444
Interpretation Centres
44444
Tourist Information
44444
Tour Guides & Attractions Personnel
44444
Destination Management Companies
44440
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services in Kathikas. Table 356. Utility service requirements in Kathikas (2015 and 2030) Tourists 2030
46.318
Potable Water
Waste Water
Electricity
Solid Waste
Overnights
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
293
58.600
293
46.880
234
4.014
20
381
2
Note 1: With no specific data on international tourist arrivals and overnights in this area for 2015 it was not possible to calculate usage of utility services for 2015. Note 2: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure A good quality road already passes the village, with a minor road providing access into the residential and commercial area. The new motorway planned to connect Pafos and Polis Hrisohous with PPP will help to bring closer the area to the main tourism centres.
3.5.4 Improvements to the built environment The urban environment in Kathikas has been assessed based on first-hand experience by THR. The following items should be the focus of attention.
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769
Table 357. Urban environment improvement needed in Kathikas Category
Effort needed
Street Vegetation
44000
Wayfinding and Directional Signage
44400
Visual Pollution
44000
Buildings Restoration
44444
Street Furniture
44440
Street Lighting
44400
Street Cleanliness
40000
Waste Collection Bins
44400
Waste Recycling
44400
Master Planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
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3.5.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 358. Action plan for Kathikas integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 359. Stakeholders for Kathikas integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
Updated version 23.03.2017
X
X
X
X
Informed
X X
X
X
X X
CYPRUS TOURISM STRATEGY
771
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 360. Estimated budget for the implementation in Kathikas (Millions) Concept b. Experiential System
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
2-2
3-4
3-4
3-4
11-14
65%
c. Infrastructure & Utilities
18-22
30-37
37-45
37-45
122-149
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
10-12
15-18
24-29
45-55
93-114
0%
e. Real Estate (including hotel serviced units)
14-17
23-28
30-37
40-49
107-131
0%
94-114
125-152
Total
44-54
71-87
333-407
Note: All numbers have been rounded up, therefore slight differences might appear
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8%
CYPRUS TOURISM STRATEGY
3.6
772
Polis and Limni Bay
3.6.1 Tourism segments to be developed Snapshot of the current situation Polis is in the centre of Chrysochous Bay, and on the edge of the Akamas Peninsula. It is a generally quiet tourist cluster, and the residents are believed to currently need to supplement their incomes through agriculture and fishing outside the main tourist season. Polis is served by the fishing port of Latchi, a yearround attraction, reputed for its fish taverns, water sports facilities, and boat rides to locations on Akamas. The proximity of Polis to Akamas, with renowned attractions such as the Baths of Aphrodite, Lara Bay and the Avakas Gorge is a great advantage. Polis is effectively sub-divided into two quite distinct areas. Neo Chorio is currently the ‘luxury’ side of the cluster, with Limni Bay, currently the lower quality side of the cluster to the east. In luxury terms, Anassa Hotel is undoubtedly Cyprus’s most luxurious tourist accommodation asset, set in a stunning location with views out to sea from its elevated position. Projects in the development pipeline are expected to enhance the ‘luxury’ of the Limni Bay if these come to fruition. The quality positioning of Polis & Limni Bay has been calculated to 3,0. Tourist demand In 2015, Polis and Limni Bay attracted 23.083 international tourists. From a low base, the number of international tourist arrivals has increased by over 21% since 2011, even though its share of all international arrivals still only amounts to 0,87%. Table 361. Evolution of international tourist arrivals in Polis and Limni Bay (2011- 2015) 2011
2012
2013
2014
2015
Polis & Limni Bay
19.115
21.003
21.082
21.189
23.083
- share %
0,80%
0,85%
0,88%
0,87%
0,87%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014.
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773
The 3 main source markets for Polis and Limni accounted for almost 80% of the international tourist arrivals. Table 362. Top 3 source markets for Polis and Limni bay (2014) Source market
Share of arrivals
United Kingdom
47,6%
Russia
16,9%
Germany
14,2%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of the tourism performance of Polis and Limni Bay in 2015 is tabulated below. Table 363. Tourism performance in Polis and Limni Bay (2015) Tourism Performance 2015 International Tourists
Polis & Limni Bay 23.083
- share of total international tourist arrivals (%)
0,9%
International Tourist Expenditure - (Euro millions)
16,62
- share of total international tourist expenditure (%)
0,8%
Total Tourist Overnights - share of total tourist overnights stays (%) â&#x20AC;&#x201C; by District International Tourist Overnight Stays
105.240 0,8% 98.749
- average Length of Stay â&#x20AC;&#x201C; International Tourists (nights)
4,28
Domestic Tourist Overnight Stays
6.491
Estimated Annual Occupancy Rate (%)
9,1%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
Accommodation supply Polis and Limni Bay had a total supply of 1.563 tourist accommodation keys (3.180 beds) at the end of 2015. This is the number upon which the projected future supply has been calculated. Table 364. Accommodation supply in Polis and Limni Bay 2015 Accommodation Supply 2015
Polis and Limni Bay
Total Keys (licensed)
1.563
- national share of licensed keys (%)
3,6%
Total Beds (licensed)
3.180
- national share of licensed beds (%)
3,6%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment Updated version 23.03.2017
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774
The number of ‘unlicensed’ hotel accommodation keys is approximately 145. However, this is only based on a proportional distribution ratio, and therefore the actual number may differ.
Vision and elements in favour and against it Vision 2030: Polis will be Cyprus’s most luxurious tourism cluster.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 365. Elements supporting and limiting Polis Vision In favour of the Vision
Against the Vision
• A small existing supply of high quality tourist accommodation.
• The existing accommodation supply in the village of Latchi decreases the quality of the cluster overall.
• Stunning location with developments / development sites overlooking the bay.
• Proposed projects such as Limni Bay Golf Resort may not be commercially viable and may damage the reputation of the cluster if developed and unsuccessful.
• Immediate adjacency to Akamas Peninsula (protected area) can guard against future potential overdevelopment.
• Polis currently has limited brand identity, and is statistically part of Pafos District, making it a sub-brand of Pafos.
Segments to be developed The positioning of Polis and Limni Bay is recommended as follows: 1 Geo-target
Frame of 2 Reference
• International
4
4
4
• Domestic
4
4
0
• Our customers will choose Polis and Limni Bay because we offer the most tranquil cluster in Cyprus, where luxury tourists can mix with likeminded individuals and families, whilst enjoying some of the best fresh fish and other gastronomic delights that Cyprus should offer.
3 Products Sun & Sea
4
Points of Difference
Nature
Sailing / Boating
Health & Wellness
Cypriot Gastronom y
• The measures specified below will prepare Polis and Limni Bay to be Cyprus’s luxury holiday destination with an elevated quality standard of 4,5.
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CYPRUS TOURISM STRATEGY
775
To attract and satisfy the needs and expectations of current, and future, tourists in Polis and Limni Bay, the following product segments should be enhanced and or developed/redeveloped. Table 366. Recommendations by product segment for Polis and Limni Bay Product Segment
Recommended approach • Maximum care and attention should be put into the further development of the Sun & Sea premium product. Beaches could be themed to have more focused appeal to different age groups and desires (including adults & families).
Sun & Sea
• High quality sand, and daily cleaning will contribute to create a unique environment for tourists. • Services to be provided should include lifeguards, umbrellas and lounges, showers, changing rooms, food & beverage units, retail units, & parking spaces for the beach capacity.
Nature
• The natural environment is the greatest asset that the Akamas area has. The area must be protected, and all product development or upgrading must be carried out lightly and sensitively. The natural assets should be used to create and upgrade a range of trails and routes for the benefit of tourists and locals.
Sailing / Boating
• The existing fishing harbours could potentially play a greater role in promoting this segment. Tourists and locals could experience local traditions and sail along the coast.
Health & Wellness
• The exclusivity of Polis and Limni bay provides an ideal backdrop for the development of wellness facilities. These should be private sector facilities, ideally with accommodation. Alternatively, in the right location, and with careful planning, multiple owners could establish a residential wellness facility.
Gastronomy
• Tourist can experience traditional meze; a large selection of delicacies consisting of many dishes with small helpings of delicious foods in a unique local and traditional ambiance restaurant catered with local products
3.6.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Polis and Limni Bay can grow to 217.505 tourists per annum, of which 162.114 (74,5%) are expected to be international tourists.
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776
Table 367. Projected growth in tourist arrivals for Polis and Limni Bay (2030) Tourist Arrivals Polis and Limni Bay International Tourists 162.114 74,5% Domestic Tourists 47.796 22,0% Day Visitors 7.595 3,5% Total Projected Tourists 217.505 - share of total Cyprus tourists 3,5%
Tourist accommodation development plan The total supply of tourist accommodation required to accommodate the projected number of tourist arrivals, and to elevate the quality level of tourist accommodation in Polis and Limni Bay to +/- 4,5, needs be between 2.428 and 2.968 keys. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation (by government). Table 368. Tourist accommodation projection for Polis and Limni Bay (2030)
Accommodation Category a. Hotels / Hotel Apartments
2015 keys
2030 keys
New keys
984
1.500-1.834
516-850
166
300-366
134-200
- 5*
0
450-550
450-550
- 4*
571
525-641
(-46)-70
- 3*
247
225-275
(-22)-28
16
47-57
31-41
- 2*
0
32-40
32-40
- 1*
16
14-18
(-2)-2
c. Special Lodging
366
339-415
(-27)-49
d. Guest Houses
32
85-103
53 -71
e. Campsites
165
149-182
(-17)-17
309-377
309-377
- 5* Grand Luxury
b. Inns (1 & 2 stars)
f. Serviced Units Sub Total Keys – Licensed (a+b+c+d+e+f)
1.563
2.428-2.968
g. Unlicensed keys regularised
(-89)-(-109)
h. Development pipeline
-115
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
865 -1.405
641 – 1.201 3,6%
3,5%
3,3%
4,0
4,5
+0,5
Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
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CYPRUS TOURISM STRATEGY
777
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 641 and 1.201, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation, in the various categories to which this applies, is expected to contribute between 89 and 109 keys to the increased accommodation supply. Tourist accommodation projects in the development pipeline THR research has revealed that 115 new tourist accommodation keys will be provided by projects that are already in planning or construction in the Polis and Limni Bay area. Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 4,5 has also created a need for a lowly 16 existing keys to be upgraded.
Development land The tranquillity and ambience of Polis, especially the Neo Chorio area to the west of Polis, offers the opportunity to develop the area as Cyprus’s most luxurious tourist accommodation product. The existence, and success of Anassa Hotel, points to the fact that very discerning clients seek their luxury in tranquil surroundings, but with the opportunity to experience the local environment, nature, and activity, if they choose to do so. It is a trait of tourists generally that they prefer to be amid other tourists of a similar ‘quality level,’ rather than feeling as if they are compelled to mix with different quality level tourists. This has little to do with snobbery or social status and more to do with people of similar interest being able to interrelate and enjoy each other’s company. The Anassa product is therefore currently unique in category, and the development of similar standard accommodation can benefit the owners of Anassa and the area at large. For this reason, two potential development locations have been identified quite near to Anassa, on the same stretch of coastline, with the express intention of suggesting them as 5star+ tourism accommodation developments. The luxury theme may be enhanced further with the proposed developed of Limni Bay Golf Resort (the other side of Polis) but its future is uncertain on the grounds of an EU objection to the planning permission granted, and its likely commercial success. A potential location for a different quality level product has been identified at the other point indicated on the map provided.
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778
Figure 252. Potential development locations in Polis - Neo Chorio and Limni Bay
Source: Elaborated from geographic data provided by the Ministry of Interior â&#x20AC;&#x201C; Dept. of Lands & Surveys Note: The identified area is not meant to be accurate (i.e. is shown with a circle for indicative purposes), in case the development is close to a protected area, when elaborating the Masterplan, corrective measures should be implemented to minimise impact to the natural environment.
3.6.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Polis and Limni bay has several services demands to meet the needs and expectations of its tourists.
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CYPRUS TOURISM STRATEGY
779
Table 369. Tourism services improvement needed in Polis and Limni bay Category
Effort needed
Accommodation
44000
Retail
44400
Leisure
44400
Public Transport
44440
Experiential System
44440
Gastronomy
44444
Interpretation Centres
44440
Tourist Information
44440
Tour Guides & Attractions Personnel
44400
Destination Management Companies
44444
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on utility services in Polis and Limni Bay. Table 370. Utility service requirements in Polis and Limni Bay (2015 and 2030) Tourists
Overnights
Potable Water Annual
Peak
Waste Water Ann.
Peak
Electricity Ann.
Peak
Solid Waste Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
23.083
99
19.800
99
15.840
79
1.356
7
129
1
2030
162.114
1.027
205.400
1.027
164.320
822
14.068
70
1.337
7
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure Polis is the only tourist area that has not a direct motorway to access it. The A7 motorway is planned to be performed as a PPP project and will significantly reduce the number of accidents and congestion in the current primary road. The new infrastructure will represent a high investment due to the complexity of the construction works as it will include several tunnels and bridges.
3.6.4 Improvements to the built environment The urban environment in Polis has been assessed based on first-hand experience by THR. The following items should be the focus of attention.
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780
Table 371. Urban environment improvement needed in Polis and Limni Bay Category
Effort needed
Street Vegetation
44000
Wayfinding and Directional Signage
44400
Visual Pollution
44000
Buildings Restoration
44000
Street Furniture
44400
Street Lighting
44400
Street Cleanliness
44400
Waste Collection Bins
44400
Waste Recycling
44400
Master Planning
44440
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
781
3.6.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 372. Action plan for Polis and Limni Bay integrated development plan Action Short Medium Long Assess product Support product Supervise quality of 1 development needs development for MSMEs products and services Monitor Identify non-licensed Promote upgrade of 2 accommodation quality accommodation accommodation & positioning Develop cluster Target investors for Monitor cluster 4 masterplan cluster development construction Identify urban areas to Develop urban Upgrade urban 5 be improved improvement guidelines environment
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 373. Stakeholders for Polis and Limni Bay integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 374. Estimated budget for the implementation in Polis and Limni Bay (Millions) Phase 1 Phase 2 Phase 3 Phase 4 Total % Concept 2017-18 2019-20 2021-25 2026-30 2017-30 Public b. Experiential System 3-4 5-6 5-6 5-6 18-22 65% c. Infrastructure & Utilities
30-36
49-60
59-73
59-73
198-242
16%
d. Tourist accomm. & Resorts (excluding hotel serviced units)
16-19
24-29
38-47
72-88
151-184
0%
e. Real Estate (including hotel serviced units)
23-28
37-45
49-60
65-80
174-212
0%
115-141
152-186
202-247
Total
71-87
540-660
Note: All numbers have been rounded up, therefore slight differences might appear
Updated version 23.03.2017
8%
CYPRUS TOURISM STRATEGY
4.
782
The Mountains and Lowlands The Mountains and Lowlands
4.1
•
Troodos
•
Marathasa Valley
Troodos
4.1.1 Tourism segments to be developed Snapshot of the current situation The Troodos Mountains area is one of Cyprus’s most stunningly beautiful and exciting. Due to its altitude, the mountain is covered in snow during winter and becomes a popular resort for skiers. During the summer residents and tourists visit the area alike, all keen to take a break from the heat down at sea level, and to walk through the forests on one of the nature trails, or enjoy the waterfalls and surrounding views. The mountains are understood to be unique in their geology and one of the only few places in the world where scientists can examine oceanic crust without needing to go to the sea. The area is also home to one of the 5 most copper rich areas in the world. Anecdotally, the island’s name ‘Kypros’ is derived from the Latin name for copper, ‘cuprum’. This area is renowned for its richness of flora and fauna, hence its name, containing as many as 750 species of plants, and many faunae of interest e.g. the Moufflon (Ovis Gmelini Ophion). The villages in Troodos are charming, many comprising folk architecture and cobbled streets. Located on the slopes of the mountains they are mostly situated amid orchards, vineyards, and pine trees. These rural villages are renowned for their warm welcoming hospitality and traditional local cuisine. In quality positioning terms, The Mountains currently stands at 2,6 based on the limited data available. In the future, to ensure that this sort of monitoring is possible, it will be advisable to collate more specific information on the different mountain areas. Tourist demand The Mountains (understood to be categorised as ‘Other’ in the official CYSTAT data) attracted 98.827 international tourist arrivals in 2015, a share of 3,72% of all such arrivals. The number of
Updated version 23.03.2017
CYPRUS TOURISM STRATEGY
783
international tourist arrivals has declined by approx. 20.000 since 2011. For unexplained reasons, the decrease in share of international arrivals is one of the most significant during the period, and strengthens the need to revitalise these tourism areas. Table 375. Evolution of international tourist arrivals in the Mountains (2011- 2015) 2011
2012
2013
2014
2015
115.431
90.373
120.350
90.719
98.827
4,83%
3,67%
5,00%
3,72%
3,72%
2.391.879
2.463.785
2.405.387
2.441,231
2.658.304
Mountains - share % Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014.
The 3 main source markets for the Mountains (i.e. Hill Resorts) accounted for less than 65% of the international tourist arrivals. Table 376. Top 3 source markets for the Mountains (2014) Source market
Share of arrivals
Israel
26,0%
United Kingdom
21,4%
Russia
16,0%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of tourism performance in The Mountains in 2015 is tabulated below. No data was found to be able to break the information down into different areas. Table 377. Tourism performance in the Mountains (2015) Tourism Performance 2015 International Tourists
Mountains 98.927
- share of total international tourist arrivals (%)
3,7%
International Tourist Expenditure - (Euro millions)
22,74
- share of total international tourist expenditure (%)
1,1%
Total Tourist Overnights - share of total tourist overnights stays (%) â&#x20AC;&#x201C; by District International Tourist Overnight Stays - average Length of Stay â&#x20AC;&#x201C; International Tourists (nights)
144.000 1,1% 135.118 1,4
Domestic Tourist Overnight Stays
8.882
Estimated Annual Occupancy Rate (%)
18,6%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
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Accommodation supply The mountains area had a total supply of 1.146 tourist accommodation keys (2.124 beds) at the end of 2015. This is the base number upon which the projected future supply has been calculated. Table 378. Accommodation supply in the Mountains (2015) Accommodation Supply 2015
Mountains
Total Keys (licensed)
1.146
- national share of licensed keys (%)
2,7%
Total Beds (licensed)
2.124
- national share of licensed beds (%)
2,5%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment
In the Mountains, the number of ‘unlicensed’ hotel accommodation keys are approximately 103. However, this is only based on a proportional distribution ratio, and therefore the number may differ.
Vision and elements in favour and against it Vision 2030: Troodos Area will be one of Europe’s most sought after mountain tourism destinations attracting both mountains tourists and those seeking a new Cypriot experience. The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 379. Elements supporting and limiting Troodos Vision In favour of the Vision
Against the Vision
• The mountains have Cypriot authenticity that the urban and coastal areas do not.
• Tourism in Cyprus has been based almost exclusively on ‘sun and beach’ for many years. It will take time to establish a reputation for greater diversity.
• The existing road network is adequate for further tourism development - if authenticity is to be retained.
• More than half of all tourists choose star rated hotels as their chosen accommodation – a category in shortest supply in the mountains area.
• Geographically close enough to the main coastal centres to enable tourists to make excursions.
• A limited supply of public transport compelling tourists to use rental vehicles.
• A diversity of basic products and services that can be enhanced.
• Higher development costs than in urban or coastal areas.
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Segments to be developed The positioning of Troodos area is recommended as follows: 1 Geo-target
2
• International
4
4
4
• Domestic
4
4
0
• Our customers will choose Troodos because they can be immersed in stunning natural surroundings, and can sample traditional Cypriot mountain life provided by genuine Cypriot mountain residents.
Frame of Reference
3 Products Sun & Sea
MultiGeneration al
Camping & Picnicking
Forest Adventure
Activity 4
Cypriot Gastronom y
• The measures specified below will create the differentiation and customer value proposition required. This will achieve an enhanced quality standard of 3,0
Points of Difference
To attract and satisfy the future needs and expectations of tourists in the Troodos Area, the following product segments need to be enhanced and or developed/redeveloped. Table 380. Recommendations by product segment for Troodos Product Segment
Nature
Recommended approach • The natural environment is the greatest asset that the Troodos area has. The area must be protected, and all product development or upgrading must be carried out lightly and sensitively. The natural assets should be used to create and upgrade a range of trails and routes for the benefit of tourists. • Multi-generational vacations combine family time and vacation time enjoying activities that are well-suited for different ages.
Multi-Generational activity
• Sharing cultural enrichment and new places, enjoying a relaxing time, fun in the sun, or outdoor sports and activities, are possibilities for every one’s preferences. • A variety of dining and sightseeing choices as well as sports, games, crafts, and activities, that cater to all ages and child care, are products to be promoted and developed
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786
Recommended approach
Camping & Picnicking
• Outdoor recreational activities in unique landmarks should be allowed either through camping sites, caravan parking, tables, and fountains. These activities may be combined with hiking, and in conjunction with other outdoor activities such as canoeing, climbing, fishing, and hunting.
Forest Adventure
• Create new open air experiences consisting of tree climbing and jumping, adventure trails. There, all the obstacles will be exciting and completely safe since all the participants will be securely attached to safety lines through the harness given during the briefing at the beginning of the experience.
Cypriot Gastronomy
• Tourists can experience traditional meze; a large selection of delicacies consisting of many dishes with small helpings of delicious foods in a unique local and traditional ambiance restaurant catered with local products.
4.1.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Troodos area will grow to 62.144 tourists per annum, of which 46.318 (74,5%) are expected to be international. Table 381. Projected growth in tourist arrivals in Troodos (2030) Tourist Arrivals
Troodos
International Tourists
46.318
74,5%
Domestic Tourists
13.656
22,0%
Day Visitors
2.170
3,5%
Total Projected Tourists
62.144
- share of total Cyprus tourists
1,00%
Tourist accommodation development plan The total supply of tourist accommodation required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in Troodos to +/3,0 (an increase of 0,4 points on the current situation), needs be between 694 and 848 keys. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation.
The table below provides a breakdown of tourist accommodation in Troodos – 2015, 2030 and the supply new keys for Troodos.
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Table 382. Tourist accommodation projection for Troodos (2030) Accommodation Category
2030 keys
New keys
227
204-250
(-23) - 23
- 5* Grand Luxury
0
10-12
10-12
- 5*
0
41-50
41-50
- 4*
75
82-100
7-25
- 3*
152
74-90
(-78) –(-62)
171
164-200
(-7)-29
- 2*
94
148-180
54-86
- 1*
77
16-20
(-61) – (-57)
2
18-22
16-20
d. Guest Houses
173
158-193
(-16) - 20
e. Campsites
0.0
62-76
62-76
f. Serviced Units
0
88-108
88-108
Sub Total Keys – Licensed (a+b+c+d+e+f)
573
694 - 848
121- 275
a. Hotels / Hotel Apartments
b. Inns (1 & 2 stars)
c. Special Lodging
2015 keys
(-66) – (-80)
g. Unlicensed keys regularised h. Development pipeline
0
Total New Keys - Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
55 - 195 2,7%
2,0%
1,2%
2,6
3,0
+0,4
Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 55 and 195, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation (intended to be 80% of the existing total number of unlicensed hotel units in Cyprus), in the various categories to which this applies, will contribute between 66 and 80 keys to the accommodation increase in the Mountains. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects in planning or construction in Troodos. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented.
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Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 3,0 has created a need for just 62-78 existing 3* keys to be upgraded to 4* or 5*. Development opportunities The development opportunities presented in this area have not been assessed in detail since the government is already pursuing a master plan initiative for its state-owned assets. This is expected to have an impact on the areas that will be developed to achieve the specified number of tourist accommodation keys calculated as being required. THR believes that this effort should be allowed to be completed before any further consideration is given to how incorporate the area into the overall tourism planning effort. The product segments referred to above can be flexibly added to another master plan as best fits the plan and its implementation. It is assumed that the master planning effort has also analysed the needs of supporting infrastructure and tourism services.
4.1.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Troodos has several services demands to meet the needs and expectations of its tourists. Table 383. Tourism services improvement needed in Troodos Category
Effort needed
Accommodation
44440
Retail
44440
Leisure
44440
Public Transport
44444
Experiential System
44444
Gastronomy
44444
Interpretation Centres
44444
Tourist Information
44444
Tour Guides & Attractions Personnel
44444
Destination Management Companies
44444
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on the utility services in the Mountains.
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Table 384. Utility service requirements in Troodos (2015 and 2030) Overnights (000s) 293
Tourists 2030
46.318
Potable Water Annual Peak m3 m3 58.600 293
Waste Water Ann. Peak m3 m3 46.880 234
Electricity Ann. Peak kWh kWh 4.014 20
Solid Waste Ann. Peak ton ton 381 2
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure Any additional new, or upgrades to existing road networks, should be considered and planned in the context of an overall urban planning review. A motorway connecting Limassol and Platres is currently in a preliminary design, if it finally goes forward it will help to reduce the travel time from Troodos to the coastal motorways.
4.1.4 Improvements to the built environment The urban environment in Troodos has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 385. Urban environment improvement needed in Troodos Category
Effort needed
Street Vegetation
40000
Wayfinding and Directional Signage
44400
Visual Pollution
40000
Buildings Restoration
44440
Street Furniture
40000
Street Lighting
44400
Street Cleanliness
44400
Waste Collection Bins
44000
Waste Recycling
44000
Master planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
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•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
4.1.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 386. Action plan for Troodos integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
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The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 387. Stakeholders for Troodos integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 388. Estimated budget for the implementation in Troodos (Millions) Concept
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
1-1
1-1
1-1
1-1
3-4
65%
c. Infrastructure & Utilities
5-6
9-11
10-13
10-13
34-42
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
3-3
4-5
7-8
13-15
26-32
0%
e. Real Estate (including hotel serviced units)
4-5
6-8
9-10
11-14
30-37
0%
Total
12-15
20-25
26-32
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35-43
94-115
8%
CYPRUS TOURISM STRATEGY
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792
Marathasa Valley
4.2.1 Tourism segments to be developed Snapshot of the current situation Marathasa is a fertile valley in the Troodos Mountains. It apparently takes its name from the plant Marathos - a type of fennel which grows in the area. It is also understood to be well known for its production of cherries. The valley is about 65 Km from Limassol, north of Mount Olympus, and extends into the Nicosia and Limassol Districts. Marathasa is the highest inhabited valley in Cyprus, and home to a total of 12 villages, including Prodromos, Lemythou, Tris Elies, Kalopanayiotis and Moutoullas. It is also home to Trooditissa and Kykkos Monasteries. A visit through the valley carried out by THR, revealed that it undoubtedly has many natural attributes and great tourism potential. However, realising this potential will not be without numerous challenges. These include: •
The topography of the valley limiting the availability and accessibility of new development sites of any meaningful size;
•
It is understood that there are many multiple ownership properties (primarily families). Getting family agreement on such matters may be problematic;
•
The valley’s geographical position on the island does not make it an easily found route for excursionists. Tourists will need to know of the valley’s existence and have an absolute intention to visit – but this could be used to the valley’s advantage.
•
Development costs will be higher than in most other locations on the island (due to accessibility and topography);
•
With only a very limited accommodation supply currently available, most are at average to low quality levels, the valley will need some notable higher quality products to attract the attention of sophisticated tourists.
Identifying these challenges is pragmatic not negative, and the overall opportunity remains intact. It is however expected that the valley will initially need a high degree of government support to be able to make a meaningful contribution to the national tourism product. No separate data is available on tourist arrivals in rural areas of the Mountains and Lowlands region.
Vision and elements in favour and against it Vision 2030: Marathasa Valley will provide 21st century tourism facilities in an environment that has reflections of the Cyprus of bygone eras.
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The following factors, that have been derived from feedback received at project workshops and other meetings, and from site visits, support and or limit achievement of the vision for Marathasa Valley 2030. Table 389. Elements supporting and limiting Marathasa Valley’s Vision In favour of the Vision
Against the Vision
• The mountains have Cypriot authenticity that urban and coastal areas do not.
• Tourism in Cyprus been almost exclusively on ‘sun and beach’ for many years. It will take time to establish a reputation for greater diversity.
• The existing road network is adequate for further tourism development - if authenticity is to be retained.
• More than half of all tourists choose star rated hotels as their chosen accommodation – a category in shortest supply in the mountains area.
• Geographically close enough to the main coastal centres to enable tourists to make sun and beach excursions.
• A limited supply of public transport compelling tourists to use rental vehicles.
• A diversity of basic products and services that can be enhanced.
•
• Existing government support for a strategy to develop the valley.
• Land and property ownership issues may limit, or delay, future development.
Higher development costs than in urban or coastal areas.
Segments to be developed The positioning of Marathasa Valley is recommended as follows: 1 Geo-target
2
Frame of Reference
• International
4
4
4
• Domestic
4
0
0
•
Our customers will come to the valley because we will offer authenticity with 21st century comfort, allowing our tourists to partake of a wide range of natural, traditional, and healthy experiences
3 Products Health & Wellness Points of 4 Difference
•
Nature
Special Interest & Learning
Cypriot Gastronomy
The measures specified below will create the differentiation and customer value proposition required. This will achieve an enhanced quality standard of 3,00
To attract and satisfy the future needs and expectations of tourists in the Marathasa Valley, the following product segments need to be enhanced and or developed/redeveloped.
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Table 22. Marathasa Valley recommendations by product segment Product Segment
Recommended approach
Nature
• The natural environment is the greatest asset that the Troodos area has. The area must be protected, and all product development or upgrading must be carried out lightly and sensitively. The natural assets should be used to create and upgrade a range of trails and routes for the benefit of tourists and locals.
Health & Wellness
• The tranquillity of the valley provides an ideal backdrop for the development of wellness facilities. These should be private sector facilities, ideally with accommodation. Alternatively, in the right location, and with careful planning, multiple owners could establish a residential wellness facility.
Special Learning
• A catalogue of educational and participatory experiences can be developed, by private sectors businesses and cooperative groups, using the valley’s natural resources to include Photography, Painting & Sculpture, Ornithology, Woodland Survival, Fishing, etc.
Interest
&
Cypriot Gastronomy
• Tourists can experience traditional meze; a large selection of delicacies consisting of many dishes with small helpings of delicious foods in a unique local and traditional ambiance restaurant catered with local products
4.2.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Marathasa Valley can attract 62.144 tourists per annum, of which 46.318 (74,5%) are expected to be international. Table 390. Projected growth in tourist arrivals for Marathasa Valley (2030) Tourist Arrivals
Marathasa Valley
International Tourists
46.318
74,5%
Domestic Tourists
13.656
22,0%
Day Visitors
2.170
3,5%
Total Projected Tourists
62.144
- share of total Cyprus tourists
1,00%
Note: The Tourist accommodation development plan for Marathasa Valley has been included into Troodos plan, as THR has not assessed in detail the existing accommodation in both subareas in the Mountains and Lowlands region.
Tourist accommodation development plan The total supply of tourist accommodation required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in the Marathasa
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Valley to +/- 3,0 (an increase of 0,4 points on the current situation), needs be between 694 and 848 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation.
The table below provides a breakdown of tourist accommodation – 2015, 2030 and the supply new keys required for Marathasa Valley. Table 391. Tourist accommodation projection for Marathasa Valley (2030) Accommodation Category
2030 keys
New keys
227
204-250
(-23) - 23
- 5* Grand Luxury
0
10-12
10-12
- 5*
0
41-50
41-50
- 4*
75
82-100
7-25
- 3*
152
74-90
(-78) –(-62)
171
164-200
(-7)-29
- 2*
94
148-180
54-86
- 1*
77
16-20
(-61) – (-57)
2
18-22
16-20
d. Guest Houses
173
158-193
(-16) - 20
e. Campsites
0.0
62-76
62-76
f. Serviced Units
0
88-108
88-108
Sub Total Keys – Licensed (a+b+c+d+e+f)
573
694 - 848
121- 275
a. Hotels / Hotel Apartments
b. Inns (1 & 2 stars)
c. Special Lodging
2015 keys
(-66) – (-80)
g. Unlicensed keys regularised h. Development pipeline
0
Total New Keys - Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
55 - 195 2,7%
2,0%
1,2%
2,6
3,0
+0,4
Note (1): Negative numbers, in brackets, denotes keys to be upgraded or redeveloped to achieve the elevated quality position Note (2): All numbers are calculated based on a +/- 10% range from the number obtained. Note (3): All numbers have been rounded up, therefore slight differences might appear
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 55 and 195, considering the unlicensed keys regularised and the development pipeline.
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Unlicensed accommodation The licensing of previously unlicensed accommodation (intended to be 80% of the existing total number of unlicensed hotel units in Cyprus), in the various categories to which this applies, will contribute between 66 and 80 keys to the accommodation increase in the Marathasa Valley. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects in planning or construction in the Mountains area. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented. Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 3,0 has created a need for just 62-78 existing 3* keys to be upgraded to 4* or 5*. Development opportunities The development opportunities presented in this area have not been assessed in detail since the government is already pursuing a master plan initiative for its state-owned assets. This is expected to have an impact on the areas that will be developed to achieve the specified number of tourist accommodation keys calculated as being required. THR believes that this effort should be allowed to be completed before any further consideration is given to how incorporate the area into the overall tourism planning effort. The product segments referred to above can be flexibly added to another master plan as best fits the plan and its implementation. It is assumed that the master planning effort has also analysed the needs of supporting infrastructure and tourism services.
4.2.3 Services and infrastructures requirements Tourism services A thriving tourism cluster like Marathasa has several services demands to meet the needs and expectations of its tourists. Table 392. Tourism services improvement needed in Marathasa Valley Category Effort needed 44440 Accommodation 44440 Retail 44440 Leisure 44444 Public Transport 44444 Experiential System 44444 Gastronomy 44444 Interpretation Centres 44444 Tourist Information 44444 Tour Guides & Attractions Personnel 44444 Destination Management Companies Note: Effort needed graded from 1 (less) to 5 (more).
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Utility services The projected increase in the number of tourist arrivals will put additional demands on the utility services in the Mountains. Table 393. Utility service requirements in Marathasa Valley (2015 and 2030) Tourists 2030
Overnights
Potable Water Annual
Peak
Waste Water Ann.
Peak
Electricity Ann.
Peak
Solid Waste Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
293
58.600
293
46.880
234
4.014
20
381
2
46.318
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure Any additional new, or upgrades to existing road networks, should be considered and planned in the context of an overall urban planning review.
4.2.4. Improvements to the built environment The urban environment in Marathasa has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 394. Urban environment improvement needed in Marathasa Category
Effort needed
Street Vegetation
40000
Wayfinding and Directional Signage
44400
Visual Pollution
40000
Buildings Restoration
44440
Street Furniture
40000
Street Lighting
44400
Street Cleanliness
44400
Waste Collection Bins
44000
Waste Recycling
44000
Master planning
44444
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government
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should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections. •
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
•
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
4.2.5. Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 395. Action plan for Marathasa Valley integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
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of
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The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 396. Stakeholders for Marathasa Valley integrated development plan Responsible Accountable Consulted
Informed
National Tourism Authority (NTA) X X Ministry of Interior, Dept. of Town Planning and Housing/Lands and X X X Surveys Regional & Local Government X X Authorities of Cyprus Cyprus Promotion Investment X X Agency (TourInvest) Cyprus Land and Building X Developers Association An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement. Table 397. Estimated budget for the implementation in Marathasa Valley(Millions) Concept
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
b. Experiential System
1-1
1-1
1-1
1-1
3-4
65%
c. Infrastructure & Utilities
5-6
9-11
10-13
10-13
34-42
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
3-3
4-5
7-8
13-15
26-32
0%
e. Real Estate (including hotel serviced units)
4-5
6-8
9-10
11-14
30-37
0%
Total
12-15
20-25
26-32
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35-43
94-115
8%
CYPRUS TOURISM STRATEGY
5.
800
Nicosia
Nicosia District â&#x20AC;˘
5.1
Nicosia
Nicosia
5.1.1 Tourism segments to be developed Snapshot of the current situation Nicosia has been continuously inhabited for over 4.500 years, and the capital of Cyprus since the 10 th century. Apart from its legislative and administrative functions, the city has established itself as the island's financial capital and international business centre. In 2012, Nicosia was the 5th richest city in the world in relative purchasing power. The city has a long history; however, the current political situation is a challenge that limits its leisure tourism potential. The inland geographic location also limits potential on an island whose main tourist attractions are primarily its climate and beaches. Nicosia therefore needs to develop its tourism along very different lines to other urban centres in Cyprus. Its leisure tourism future will be more assured if based around products and services for which tourists specifically travel to, and stay in, Nicosia, and where climate is of little relevance. As an example of this, there would be a strong argument for the islandâ&#x20AC;&#x2122;s proposed new casino resort being in Nicosia, and or some medical tourism facilities. Much of the undevelopable land in Nicosia is understood to be owned by the state. It is further understood that there have been various studies into the best use of such lands, and or various projects proposed at different times but never followed through. Tourist demand In 2014, Nicosia attracted approximately 140.895 international tourists. Between 2011 and 2015 the total number of arrivals has increased by nearly 20.000. The city accounts for 5,3% of all international arrivals, although it is probable that most these are business rather than leisure tourists.
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Table 398. Evolution of international tourist arrivals in Nicosia (2011- 2015) 2011
2012
2013
2014
2015
123.994
117.601
110.737
129.336
140.895
5,18%
4,77%
4,60%
5,30%
5,30%
2.391.879
2.463.785
2.405.388
2.441.232
2.659.406
Nicosia - share % Total Cyprus
Source: CYSTAT, Tourism Statistics 2011,2012,2013 & 2014 Note: In the absence of official data, international arrivals 2015 have been calculated using the total number of international arrivals and the distribution ratio applicable to 2014.
The 3 main source markets for Nicosia accounted for almost 56,6% of the international tourist arrivals. Table 399. Top 3 source markets for Nicosia (2014) Source market
Share of arrivals
Greece
30,6%
United Kingdom
21,8%
Gulf Countries
4,2%
Source: CYSTAT Tourism Statistics 2014
A more detailed assessment of tourism performance in Nicosia 2015 is tabulated below. Table 400. Tourism performance in Nicosia (2015) Tourism Performance 2015 International Tourists
Nicosia 140.895
- share of total international tourist arrivals (%)
5,3%
International Tourist Expenditure - (Euro millions)
44,06
- share of total international tourist expenditure (%)
2,1%
Total Tourist Overnights - share of total tourist overnights stays (%) â&#x20AC;&#x201C; by District International Tourist Overnight Stays - average Length of Stay â&#x20AC;&#x201C; International Tourists (nights)
279.000 2,1% 261.791 1,86
Domestic Tourist Overnight Stays
17.209
Estimated Annual Occupancy Rate (%)
26,7%
Source: CYSTAT Arrivals of tourists by country of usual residence (2015)
Accommodation supply Nicosia had a total supply of 1.549 tourist accommodation keys (2.866 beds) at the end of 2015. This is the number upon which the projected future supply has been calculated.
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Table 401. Accommodation supply in Nicosia (2015) Accommodation Supply 2015
Nicosia
Total Keys (licensed)
1.549
- national share of licensed keys (%)
3,6%
Total Beds (licensed)
2.866
- national share of licensed beds (%)
3,6%
Source: CTO, Units, and beds in operation at 31st December 2015 by area and type of establishment
Using the weighted average of the classification of existing tourist accommodation, Nicosia’s quality positioning is currently at 3,2. In Nicosia, the number of ‘unlicensed’ hotel accommodation keys are approximately 98. However, this is only based on a proportional distribution ratio, and therefore the number may differ.
Vision and elements in favour and against it Vision 2030: Nicosia will aspire to become a noted European city, preserving its unique history.
The following factors, derived from feedback received at project workshops, other meetings, and from THR site visits, support and or limit achievement of the vision. Table 402. Elements supporting and limiting Nicosia’s Vision In favour of the Vision
Against the Vision
• The city’s long history.
• No direct air access to the city – distance from Larnaca Airport.
• Availability of inner city sites that can be developed.
• Existing political situation
• The city is of a manageable size vis-a-vis making a positive impact through investment in urban improvements.
• The urban environment is degraded and in need of significant improvement.
• Good road access to Nicosia from other island locations.
• Inland geographical location.
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Segments to be developed The positioning of Nicosia is recommended as follows: 1 Geo-target
2
4
4
0
• Domestic
4
4
0
•
Frame of Reference
3 Products
4
• International
Our customers will choose Nicosia for a city tourism experience that highlights modern Cypriot life whilst respecting its history, culture and heritage through events, gastronomy, and cultural experiences.
Events Cypriot Health & (Business & History Gastronomy Wellness Leisure) • The measures specified below will differentiate Nicosia and enhance its customer value proposition. This will elevate its quality standard to 4,5.
Points of Difference
To attract and satisfy the future needs and expectations of tourists in Nicosia, the following product segments need to be enhanced and or developed/redeveloped. The Nicosia offer of both retail, and food and beverage, is less than would be expected of a prestigious capital city tourism destination. Table 22. Recommendations by product segment for Nicosia Product Segment
Events (Business & Leisure)
History
Gastronomy
Medical & Wellness
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Recommended approach • The capital city as a major business destination requires not only accommodation facilities to host business tourists but also an attractive shopping and leisure offer. • In a tourist location, an appropriate mix of retail outlets should include international, national, and local brands, in modern commercial centres and in traditional streetscapes. • Nicosia has a greater number of cultural tourist attractions that are not well promoted in the city’s accommodation outlets, and their locations are not well signed for motorists or pedestrians. Enhancement of these cultural products should focus on marketing strategy and on the tangible aspects of the buildings and their exhibits. • A relevant mix of food and beverage outlets should complement the retail offer, most of whom will continue business late into the night. The offer should include international style and local traditional cuisine. • Cyprus offers world-class reputation for high-quality private health care in a technologically advanced environment, with 6 public hospitals and approximately 80 private centres and Nicosia can become a recognised city.
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5.1.2 Guidelines for growth Projected tourism growth By 2030, it is projected that Nicosia will grow to 217.505 tourists per annum, of which 162.114 (74,5%) are expected to be international. This represents a modest increase of 21.219 on the number of international tourist arrivals in 2015. Table 403. Projected growth in tourist arrivals for Nicosia (2030) Tourist Arrivals
Nicosia
International Tourists
162.114
74,5%
Domestic Tourists
47.796
22,0%
Day Visitors
7.595
3,5%
Total Projected Tourists - share of total Cyprus tourists
217.505 3,5%
Tourist accommodation development plan The total supply of tourist accommodation keys required to accommodate the projected increase in tourist arrivals, and to elevate the quality level of tourist accommodation in Nicosia to +/- 4,0 (an increase of 0,8 points on the current situation), needs to be between 2.428 and 2.968 keys by 2030. This can be achieved through: •
Development of new tourist accommodation (by investors / developers);
•
Upgrading/redeveloping existing tourist accommodation (by investors / developers)
•
Regularising the position of currently unlicensed accommodation.
The table below provides a breakdown of tourist accommodation in Nicosia – 2105, 2030 and the supply new keys required.
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Table 404. Tourist accommodation projection for Nicosia (2030) Accommodation Category a. Hotels / Hotel Apartments
2015 keys
2030 keys
New keys
1.046
1.518-1.856
472-810
0
258-316
258-316
- 5*
318
608-743
290-425
- 4*
302
380-464
78-162
- 3*
426
274-334
(-152)-(-92)
489
446-545
(-44) - 56
- 2*
372
335-409
(-37) - 37
- 1*
117
111-135
(-6) - 18
c. Special Lodging
0
44-54
44-54
d. Guest Houses
14
112-136
98-122
0-0
0-0
- 5* Grand Luxury
b. Inns (1 & 2 stars)
e. Campsites f. Serviced units Sub Total Keys – Licensed (a+b+c+d+e+f)
1.549
309-377
309-377
2.428-2.968
879-1.419
g. Unlicensed keys regularised
(-88) –(-108)
h. Development pipeline
0
Total New Keys – Licensed (a+b+c+d+e+f+g+h) Share of total Cyprus Accommodation – by district Quality Position
771 – 1.331 3,6%
3,5%
3,4%
3,2
4,0
+0,8
Note: Negative numbers denotes keys to be upgraded or redeveloped to achieve the elevated quality position
The table illustrates that to satisfy the projected tourist demand by 2030, the supply of new keys needs to be between 771 and 1.331, considering the unlicensed keys regularised and the development pipeline. Unlicensed accommodation The licensing of previously unlicensed accommodation (intended to be 80% of the existing total number of unlicensed hotel units in Cyprus), in the various categories to which this applies, will contribute between 88 and 108 keys to the accommodation increase in Nicosia. Tourist accommodation projects in the development pipeline THR research has not revealed any tourist accommodation projects in planning or construction in the Nicosia area. THR acknowledges that there may be some smaller projects that it is not aware of, but these are not expected to make a significant difference to the numbers presented. Tourist accommodation to be upgraded or redeveloped Achieving the elevated quality position of 4,0 has created a need for upgrading between 92 and 152 existing 3* keys and 44 inns to 4* or 5*.
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Development land Recognising that the government needs land for a variety of economic reasons, not just tourism, THR does not feel that it can identify any specific locations that should be used for tourist accommodation and associated development. The basic principles that should be applied to the planning of the city (considering the current political situation but with an eye on the future), and tourism development include: •
Urban planning of the city needs to define whether Nicosia is to progress in the direction of being a more dispersed, vehicular-reliant city, or one that is more consolidated (concentrated), encouraging walking, and the use of public transport (including taxis);
•
Urban planning also needs to define whether the city will be segmented (i.e. economic sectors will be concentrated into different areas) or left to evolve in a more varied, multisectorial manner;
•
Locations for tourist accommodation should, ideally, be situated near other tourist facilities and services e.g. public spaces, retail areas, cultural attractions etc.
•
Inner city locations, near to shopping and entertainment areas, will encourage tourists to walk. This reduces the need for vehicular transport and improves the tourist experience.
The map below illustrates the current spatial layout of Nicosia, and identifies the land owned by the State (shaded in green). Figure 253. State owned land in the city of Nicosia
Source: Elaborated from geographic data provided by Government of Cyprus, Ministry of Interior – Dept. of Lands & Surveys
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5.1.3 Services and infrastructures requirements Tourism services The demands of a city (primarily a business city) in tourism service terms are very different to those needed in dedicated leisure tourism clusters. Table 22. Tourism services improvement needed in Nicosia Category
Effort needed
Accommodation
44000
Retail
40000
Leisure
44000
Public Transport
40000
Experiential System
44440
Gastronomy
44440
Interpretation Centres
44000
Tourist Information
44400
Tour Guides & Attractions Personnel
44000
Destination Management Companies
44000
Note: Effort needed graded from 1 (less) to 5 (more).
Utility services The projected increase in the number of tourist arrivals will put additional demands on the utility services in the city and suburbs. Table 405. Utility service requirements in Nicosia (2015 and 2030) Tourists
Potable Water
Waste Water
Electricity
Solid Waste
Overnights
Annual
Peak
Ann.
Peak
Ann.
Peak
Ann.
Peak
(000s)
m3
m3
m3
m3
kWh
kWh
ton
ton
2015
140.895
262
52.400
262
41.920
210
3.589
18
341
2
2030
162.114
1.027
205.400
1.027
164.320
822
14.068
70
1.337
7
Note: The ultimate requirements of the cluster, and chosen development locations will be site-specific, and subject to the proposed scope of products and services defined by respective investors/developers.
Road infrastructure Any additional new, or upgrades to existing urban road networks, should be considered and planned in the context of an overall urban planning review.
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5.1.4 Improvements to the built environment The urban environment in Nicosia has been assessed based on first-hand experience by THR. The following items should be the focus of attention. Table 22. Urban environment improvement needed in Nicosia Category
Effort needed
Street Vegetation
44440
Wayfinding and Directional Signage
44440
Visual Pollution
44444
Buildings Restoration
44444
Street Furniture
44400
Street Lighting
44400
Street Cleanliness
44400
Waste Collection Bins
44440
Waste Recycling
44440
Master Planning
44400
Note: Effort needed graded from 1 (less) to 5 (more).
•
Street Vegetation: native vegetation should be planted in favour of foreign species;
•
Wayfinding and Directional Signage: create a standard Cypriot sign adapted to the cluster with clear letters in English and Greek, located in key intersections, and within a regular distance to effectively lead tourists to main attractions;
•
Visual Pollution: traffic signs and signals need to be clearly set against the rest of the visual environment so that they can be read without disturbance, therefore local government should inspect buildings to remove billboards, limit business signs sizes, reduce telephone and utility poles and increase litter collections.
•
Buildings Restoration: buildings on all main streets leading to the towns and villages centres, as well as promenades and shopping streets should have a coherent colour pattern and an acceptable architectural style.
•
Street Furniture: promenades and pedestrian streets should have multiple benches, chairs and tables allowing for social gathering, creating small ambiance environments as well as children playgrounds integrated with urban space;
•
Street Lighting: tourist areas should have a good level of light intensity and create safe paths in the dark; while during the day, street lighting must integrate with the environment;
•
Street Cleanliness: daily cleaning of streets, either with mechanical equipment, water pressure and manual workforce should be scheduled in the main tourist streets;
•
Waste Collection Bins: daily collection of bins and containers should be done, particularly in touristic areas and next to main accommodation units;
•
Waste Recycling: Government should incentivise waste reduction to release pressure on the waste management system and locate collection points in streets, as well as recycling bins in commercial, and pedestrian areas;
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809
Master Planning: an environmental-friendly environment has much to do with a sustainable urban planning which includes pedestrianisation of streets, reduction of private transport usage and an efficient location of public services.
5.1.5 Action plan, stakeholders, and budget The implementation of the plan requires an initial phase of planning and a longer phase of implementation and monitoring of the plan. Table 406. Action plan for Nicosia integrated development plan Action
Short
Medium
Long
1
Assess product development needs
Support product development for MSMEs
Supervise quality of products and services
2
Identify non-licensed accommodation
Promote upgrade accommodation
Monitor accommodation quality & positioning
4
Develop masterplan
cluster
Target investors for cluster development
Monitor construction
cluster
5
Identify urban areas to be improved
Develop urban improvement guidelines
Upgrade environment
urban
of
The mobilisation of key stakeholders will be crucial to ensure an effective implementation: Table 407. Stakeholders for Nicosia integrated development plan Responsible Accountable Consulted National Tourism Authority (NTA) Ministry of Interior, Dept. of Town Planning and Housing/Lands and Surveys Regional & Local Government Authorities of Cyprus Cyprus Promotion Investment Agency (TourInvest) Cyprus Land and Building Developers Association
X
X
X
X
Informed
X X
X
X
X X
An estimate of the budget required is provided based on the number of new keys to be developed as it has been the main driver for tourism and urban improvement.
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Table 408. Estimated budget for the implementation in Nicosia (Millions) Concept b. Experiential System
Phase 1
Phase 2
Phase 3
Phase 4
Total
%
2017-18
2019-20
2021-25
2026-30
2017-30
Public
3-4
5-6
5-6
5-6
18-22
65%
c. Infrastructure & Utilities
30-37
50-61
60-73
60-73
200-245
16%
d. Tourist accommodation & Resorts (excluding hotel serviced units)
16-20
24-30
39-48
73-90
153-187
0%
e. Real Estate (including hotel serviced units)
23-28
37-46
49-60
66-81
176-215
0%
117-143
154-188
204-250
Total
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72-88
547-669
8%
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811
Chapter 11 Economic impact of the Plan 11.1 Contribution of tourism growth to employment 11.1.1 Expected growth in employment
11.2 Contribution of tourism growth to the GDP 11.2.1 Estimate of Tourism Product 11.2.2 Estimate of Tourism Income 11.2.3 Impact on GDP 11.2.4 Impact of tourism growth in the economy activity
11.3. Impact of tourism growth on the tax revenue 11.4 Impact of tourism growth in the economy activity 11.5 3 different growth models for Cyprus 11.5.1 Methodological note 1: Investment and ROI 11.5.2 Methodological note 2: carbon footprint
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This chapter presents the impact that implementing the new Cyprus Tourism Strategy will have on the economic performance of the tourism sector and the economy as a whole. Section 11.1 includes an estimate of growth in employment, including both the number and types of jobs generated. Section 11.2 provides an estimate of the tourism production, income generated and a projected contribution of the tourism sector to the GDP of Cyprus. Section 11.3 includes an analysis of the expected growth in tax revenues resulting from the implementation of the Strategy, that will contribute to financing the public investments needed at different levels. Section 11.4 address the impact the strategy has on the sustainability and quality of life of the Cypriot population. Section 11.5 presents 3 different growth models for Cyprus: the Standard, the recommended “Premium & wise” growth model, and the alternative “Premium & Soft” growth model.
11.1.
Contribution of tourism growth to employment Employment plays an important role in providing service capacity in Cyprus, through: •
New jobs, hence higher level of employment.
•
Increased productivity and technological capacity.
•
Strengthened education and training for a more versatile and professional workforce.
•
Indirect influence of the tourism industry over other economic sectors.
•
Higher efficiency in terms of production and added value generated by employment.
Consequently, all aspects related to identifying employment requirements (in terms of volume and type) in Cyprus shall have a prominent place in this document. This will include: •
Direct employment in the tourism industry (accommodation and other tourism related activities).
•
Indirect employment generated by the tourism sector in other sectors of Cyprus’s economy, following the additional production from suppliers (which allow the tourism industry to provide the required goods and services).
•
Achieving these goals requires clear human capital development policies and strategies, targeted at tourism stakeholders and institutions.
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11.1.1. Expected growth in employment For planning purposes, as well as models like Input-Output Tables, the following simulation can be used: Total direct tourism employment (TTJ) = (Number of licensed keys) x (key/employment ratio) x (multiplier of induced employment) Current direct tourism jobs The estimate of current number of employees directly working in tourism is 24.000 (rounded) distributed as follows: •
Accommodation employment: (Key/employment ratio)
12.000
jobs
-
(Number
of
licensed
keys)
*
•
Other direct employment: 12.000 jobs - (Number of licensed keys) * (Multiplier of induced employment)
According to the WTTC report for Cyprus, the total tourism employment in Cyprus is 73.500 jobs. Therefore, THR assumes that the total indirect employment in 2015 is the difference between the total tourism jobs and the direct jobs, calculated previously: •
Indirect Jobs: 73.500 (Total) – 24.000 (Direct) = 49.500 (rounded)
Furthermore, current employees from major unlicensed hotels have not been considered in this estimate. However, in the projection that follows, as they are expected to obtain a license, they have been taken into account.
Estimated NEW total tourism jobs by 2030 For planning purposes, as well as models like Input-Output Tables, the following simulation can be used: Total tourism employment (TTJ) = (Number of licensed keys) x (key/employment ratio) x (multiplier of induced employment) x (tourism expenditure multiplier) The Premium Destination Strategy aims at providing higher quality services and will require a higher number of employees. As a result, the average employment per key ratio is expected to increase up to 0,39 from 0,28, as per comparable Premium destinations. The figure of tourism employment for statistical and planning purposes is estimated based on of the following: •
Direct jobs in hotels, which will be used as the basis for 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.
•
The indirect employment multiplier, resulting from the production processes of accommodation companies.
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Thus, the estimated total tourism jobs by 2030, taking into account the 28.950 additional keys to be developed following the Premium Destination Strategy, plus the estimated 5.000 hotel currently non-licensed likely to be licensed is: TTJ = 33.950 x 0,39 x 1,98 x 1,75 = 45.729 new jobs Table 409. Estimate of new tourism jobs (direct, indirect and induced) by 2030 Employment Typology
New employment
Tourist accommodation jobs
13.197
Sectorial Hotels and their food service Food service activities (non-hotels)
Other induced tourism jobs
12.934
Travel agencies & tour operators Transport Other
Indirect jobs applying the economy multiplier
19.598
General sectors of the production system and providers of tourism companies
Source: Based on official inter-sectorial tables and satellite accounts from a sample of countries Note: All numbers have been rounded up, therefore slight differences may be found.
Estimated TOTAL tourism jobs by 2030 The total tourism jobs generated in Cyprus is as follows: Figure 254. Total tourism employment (direct and indirect jobs) by 2030 140.000 120.000 100.000 69.098
80.000 61.456
63.831
60.000 49.500 40.000 20.000 0
19.890
21.457
20.051
21.650
12.000 12.000
2015 2020 2025 Accommodation jobs Other tourism jobs
24.933
25.197 2030 Indirect jobs
Note: all number have been rounded up
Looking at employment distribution across tourism and non-tourism sectors in comparable countries, it is possible to establish a distribution of employment by employment categories. Based on estimates, 58% of tourism employment opportunities will be open to skilled staff.
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Table 410. Distribution of new employment in the tourism sector by job categories, by 2030 1 Categories
% over the total
Jobs
Decision-makers
3%
1.372
Managers
5%
2.286
Technical staff
23%
10.518
Professionals and specialists
17%
7.774
Base personnel or skilled trade
42%
19.206
Training and internships
10%
4573
100%
45.729
Total
Source: Based on official inter-sectorial tables and satellite accounts from a sample of countries 1 Estimated jobs do not include employment in the building sector related with investment. Note: The numbers have been rounded up, so slight differences may be found.
The need for importing human capital Cyprus must import human capital from abroad. The question is how much and under what conditions. It is estimated that the percentage of legal foreign employees working in the hospitality and restaurant industry in Cyprus is in the order of 40%. Probably, if we concentrate exclusively on the tourism industry (about 70% of restaurants are not included) the weight of the foreign human factor is probably reduced to 25-30%. Looking at 2030, we estimate that around 70% of jobs could (and this would be desirable) be taken by Cypriots and not only in hotels and restaurants but also in the tourist transport sector, the DMCs, retail, the entertainment and cultural offerings, special interest activities, services to tourist companies, etc. This does not take into account the numerous jobs created by the tourism sector in other sectors of the Cypriot economy. The strategy proposes measures to promote the access of young Cypriots to the tourist labour market and adequate formulas for their education and training. THR suggests that the Government considers 2 things in regards to this issue: •
Study the labour immigration policy of Canada.
•
Apply a formula for recruitment and training in the countries of origin before the arrival of this human capital to Cyprus.
•
That the recruitment be made according to the needs / requests of the industry, which will also specify the types of work, the remunerations and the conditions offered.
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816
Contribution of tourism growth to the GDP While tourism is generally acknowledged as one of the pillars of the Cyprus’ economy, its total economic contribution is often overlooked. This is largely due to the fact that the tourism sector is not comprehensively defined in the National Accounts that only consider the output of the Hotels and Restaurants sector. This approach fails to take into consideration the upstream and downstream links of tourism with other sectors, especially transportation, trade and construction, providers of personal and professional services, and other relevant subsectors not included in the Hotels and Restaurants sector. The trickle-down effect in other sectors is known as the multiplier effect: an initial injection of direct tourism expenditure into tourism-related sectors leads to successive expenditure cycles throughout the economy that exponentially increase the direct expenditure’s contribution. The following pages present a projection of tourism production (direct and indirect) and income for the period 2020-2030, as well as the tourism contribution to the GDP by 2030 as a result of the Premium Destination Strategy. THR has used the Production approach to determine the impact of Tourism on the economy in terms of the share of GDP. It could be alternatively calculated from the Income or Expenditure approach, but they should all provide the same results.
Methodological note: Theoretical Approaches to Measuring GDP The Cyprus GDP is a measure of the total domestic economic activity. It is the sum of all incomes earned by the production of goods and services within Cyprus. Where the earner of the income resides, or comes from is irrelevant, so long as the goods and services themselves are produced or delivered within Cyprus. There are 3 approaches to measuring GDP. These 3 measures should be equal as they are measuring the same flows of money, classified in different sources. The production approach: The production approach to GDP, known as GDP(P), is the sum of all production activity within an economy. In the form of an equation, this is described by: GDP(P) = output – intermediate consumption + taxes on products – subsidies on products Output is all the goods and services produced, whilst intermediate consumption comprises all the goods and services consumed or transformed in a production process. The taxes and subsidies are included in order to put all three approaches on a consistent valuation basis. The expenditure approach: The expenditure approach to GDP, or GDP(E), is the sum of all final expenditures within an economy. In equation form, this is as follows: GDP(E) = household final consumption expenditure + final consumption expenditure of nonprofit institutions serving households (NPISHs) + general government final consumption expenditure + gross capital formation + exports – imports Final consumption expenditure is expenditure on goods and services purchased for the last time and not to be consumed or transformed in a production process. Gross capital formation comprises investment in fixed assets, changes in inventories and net acquisition of valuables. Exports and imports relate to trade in goods and services with the rest of the world and do not include other cross-border financial flows
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The income approach: The income approach to GDP, or GDP(I) is the sum of all factor incomes within an economy. This could also be described as the sum of incomes directly generated by productive activity. In equation form: GDP(I) = compensation of employees + gross operating surplus + mixed income + taxes on production and products – subsidies on production and products Compensation of employees is all income from employment, including employers’ pension and social contributions. Operating surplus is primarily made up of trading profits and rental income, whilst mixed income is the income of the self-employed.
11.2.1. Estimate of Tourism Production Tourist expenditure: the basis for the estimate Tourist expenditure in Cyprus, both international and domestic, generates tourism production (TP) for the country. To calculate this expenditure, the following premises are considered: •
The total number of tourists per travel motivation.
•
The number of Premium tourists according to the client mix per each travel motivation.
•
The average length of stay varies for each degree of customer sophistication but generally, increases as the price positioning strategy focuses on high-spenders.
•
The average daily expenditure depends on the price positioning strategy and increases in the Premium as shown in the table below. Table 411. Estimate of average daily expenditure 2030 by travel motivation and customer value proposition (Euro) Travel motivation
Strategy Standard Premium High-end
Pleasure 115,33 155,55 187,86
Business 178,98 257,85 313,46
VFR 54,53 70,14 76,80
Day visitors 53,94 69,00 75,56
Domestic 46,92 48,42 50,01
Note: The numbers have been rounded up, so slight differences may be found.
Estimate of tourism production The table shows an estimate based on the algorithm explained below. By combining international and domestic tourism expenditure provides the direct tourism production (D) and the total tourism production (D+I).
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Table 412. Estimated tourism direct (D) and total (D+I) production by travel motivation (Mill. Euro) 2020
2025
2030
Pleasure Business Visit Friends and Relatives Day visitors Domestic
Direct 2.681 132 259 8 243
Total 4.692 231 454 14 425
Direct 3.802 193 313 11 319
Total 6.654 337 548 19 558
Direct 6.050 303 375 15 389
Total 10.588 530 657 26 681
Total
3.323
5.816
4.638
8.116
7.133
12.482
Note: The numbers have been rounded up, so slight differences may be found.
The total tourism production (Direct + Indirect) is calculated by applying the tourism production multiplier, which according to Leontief’s Input-Output model of tourism production stands at 1,75 in Cyprus. In other words, for every unit of tourist currency that is spent in Cyprus, an additional 0,75 units are generated for the economy. The tourism multiplier plays a crucial role in converting tourism expenditure into tourism production, revealing the impact that tourism expenditure has over other sectors of the economy. Algorithm To calculate tourism production, the following algorithm has been used: Tourism production 20xx = (Number of Pleasure tourists) 20xx × (average length of stay of Pleasure tourists) x (average daily expenditure of Pleasure tourists) + (Number of Business tourists) 20xx × (average length of stay of Business tourists) x (average daily expenditure of Business tourists) + (Number of VFR tourists) 20xx × (average length of stay of VFR tourists) x (average daily expenditure of VFR tourists) + (Number of Day visitors) 20xx × (average daily expenditure of Day visitors) + (Number of Domestic tourists) 20xx × (average length of stay of Domestic tourists) x (average daily expenditure of Domestic tourists) Where: 20xx = 2020, 2025 and 2030
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11.2.2. Estimate of tourism income However, not all of Cyprus’ tourism production (TP) has an impact on its GDP. So, by adjusting the real contribution of tourism to the GDP, tourism income (TI) can be calculated considering the following 2 factors: •
•
Leakages due to imports: Up to 9% of the tourism production corresponds to imports. Therefore, the import factor for the tourism production in Cyprus is 0,91 (91%) once deducted imports, which stands in the mid-range between 0,85 (85%) and 0,96 (96%). This range is based on THR’s comparative analysis of the input-output tables for 20 tourism destinations which include islands highly dependent on imports. Added value: Around 60% of the tourism production creates added value because 40% of the tourism production is dedicated to cover tourism service production costs (salaries, goods, etc.)
Applying this rationale, the Cyprus tourism production (D+I) is multiplied by the import effect (0,91) and the added value generated (0,60). As a result of this, the tourism income (TI) is around 55% of tourism production (TP). The results in an estimated Premium tourism income for the 2020-2030 period as follow: Table 413. Estimated Premium tourism income by travel motivation (Mill. Euro) Travel motivation
2020
2025
2030
Pleasure Business Visit Friends and relatives Day visitors Domestic Total
2.562 126 248 7 232 3.175
3.633 184 299 10 305 4.432
5.781 289 359 14 372 6.815
Note: The numbers have been rounded up, so slight differences may be found.
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11.2.3. Impact on the GDP The GDP is the monetary value of all goods and services produced in a country over a specific time period, minus the cost of goods that are consumed in the process (goods and services). The contribution of tourism to the GDP is projected based on the total tourism production and the total tourism income. Table 414. Share of tourism expenditure and tourism production in the GDP (CAGR =2,3%) Concept GDP (Million Euro) Total tourism production (Million Euro) Total tourism income (Million Euro) Tourism income over GDP (%)
2020 19.953 5.816 3.175 15,9
2025 22.856 8.116 4.432 20,4
2030 24.338 12.482 6.815 28,0
Note: The numbers have been rounded up, so slight differences may be found.
Therefore, considering the growth of both the GDP and the tourism income, it can be concluded that the average contribution of tourism to the Cyprus GDP will increase from 15,9% by 2020 (from a 14% in 2015) to 28,0% by 2030. Note: A further analysis of the Balance of Payments should indeed consider the leakages to the economy from repatriate salaries, but also include any relevant repatriation of capitals from foreign investors. From a preliminary calculation based on the assumptions above for salary repatriation and the figures provided from the Income perspective, the 28% of GDP contribution variation may be less than 1 percentage point. Is a contribution of 28% of GDP high? It is internationally accepted that over-dependency on tourism begins at around 25-35% of the GDP. However, in successful destinations such as Hawaii and the Balearic and Canary Islands, the dependency on tourism is higher than 50% of the GDP, and tourism is not considered to represent a serious risk to their future welfare. They are healthy economies, with a high quality of life and per capita income. In the case of Cyprus, due to its size, resources and, in particular, its geographical location, it is more susceptible to suffer from an excessive dependency on tourism than the destinations mentioned above. For this reason, it is advised that tourism maintains a maximum weight on the GDP between 25 and 35%. This is in keeping with Cyprusâ&#x20AC;&#x2122; sustainable tourism development in order to avoid the costly impact of destination overcrowding, alongside other environmental and cultural impacts. The unique and outstanding value of both the culture and nature of Cyprus must be taken into account when developing tourism in the country. However, Cyprus will most likely activate new and important sources of revenue in the field of energy, among others. If this is the case, it is very likely that the weight of tourism will have increased significantly from current situation and will represent 15-20% of the total GDP.
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11.2.4 Impact of tourism growth in the economic activity 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 stays 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 415. Value Gap Number of overnights (x 000) A.
Year
Per capita trip expenditure (Euro)
Direct tourism production (Million Euro)
A.
Organic B. growth (no Premium strategy) strategy
B/A
A.
Organic B. growth (no Premium strategy) Strategy B/A
Organic growth (no strategy)
Premium Strategy
B/A
B.
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
-
-
+8.569
+35.854
4,18
Accum. 20152030 3 Value Gap2
+32.305
+113.280 3,50
+80.895
+27.285
THR estimates of international and domestic tourism data based on CYSTAT 2014-2015. Gap = (B-A) of Dif. 2015-2030. 3 Accumulated number Note: The numbers have been rounded up, so slight differences may be found. 1
2 Value
Table 416. Factor affecting Value Gap in Direct Tourism production Value Gap (Million Euro)
%
Increase of tourists
4.911
18
Longer Average stay
5.962
22
Greater Daily Expenditure per tourist
16.416
60
Total
27.285
100
Factors
Note: The numbers have been rounded up, so slight differences may be found.
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Figure 255. Projection of Direct Tourism Production by 2030
Direct Production (Mllion Euro)
7.500 6.500 5.500
Value gap due to the increase of average expenditure = +16.412 Mill. Euro
4.500
Value gap due to the increase of lenght of stay = + 5.962 Mill. Euro Value gap due to the increase of number of tourists = +4.911 Mill. Euro
3.500 2.500 1.500 2015
2020
2025
Organic growth (no strategy)
Premium Strategy
Increase of Tourists
Extended Stay
2030
Impact of tourism growth in the economic activity by sectors As it has already been mentioned, a crucial effect of tourism growth that should be highlighted is the impact of tourism expenditure over other sectors of the productive system. Thus, it is expected that the effects of tourism growth resulting from the implementation of the strategy will change the current volume and weight of other economic sectors. Properly implemented, the Cyprus Tourism Strategy will create additional income for Cyprus which can be estimated by calculating the Value gap as shown below.
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Table 417. Tourism Income per economic activity (million Euro)
Economic Activity
A. Agriculture, forestry and fishing B. Mining and quarrying C. Manufacturing D. Electricity, gas, steam, and air conditioning supply E. Water supply and related activities F. Construction G. Wholesale and retail trade H. Transportation and storage I. Accommodation and food service J. Information and communication K. Financial and insurance activities L. Real estate activities M. Professional, scientific and technical N. Administrative and support service O. Public administration and defence P. Education Q. Human health and social work R. Arts, entertainment, and recreation S. Other service activities T. Activities of households as employers Total CAGR (%)
A Tourism Income 2015
C B Tourism Tourism Income Income Value Gap 2030 by 2030 (C2030 B) Organic Premium growth (no Destination strategy) Strategy
0 0 65
0 0 90
0 0 185
0 0 94
5
7
15
8
6 17 283 212 1.436 30 30 142 25 7 0 0 26 56 37 15 2.391
9 24 395 296 2.005 42 42 198 35 10 0 0 36 78 51 20 3.339 2,3
18 48 807 604 4.092 86 85 405 71 21 0 0 74 159 104 42 6.815 7,6
9 24 412 308 2.087 44 44 207 36 11 0 0 38 81 53 21 3.476
Note: The numbers have been rounded up, so slight differences may be found.
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As a reference, the table below shows an estimate of the current contribution of tourism within the production generated by the different economic sectors: Table 418. Impact of the current tourism model on Cyprus’ economic activity Million Euro Economic Activity (2015)
GAV
GDP
379 416 A. Agriculture, forestry and fishing 18 20 B. Mining and quarrying 806 884 C. Manufacturing D. Electricity, gas, steam, and air 267 293 conditioning supply 156 171 E. Water supply & related activities 419 460 F. Construction 2.348 2.576 G. Wholesale and retail trade 1.054 1.157 H. Transportation and storage 1.153 1.265 I. Accommodation & food service 752 825 J. Information and communication K. Financial and insurance activities 1.491 1.636 1.768 1.940 L. Real estate activities 1.238 1.358 M. Professional, scientific & tech. 182 200 N. Administrative & support service O. Public administration & defence 1.542 1.691 1.025 1.125 P. Education 645 707 Q. Human health and social work 232 254 R. Arts, entertainment & recreation 260 285 S. Other service activities T. Activities of households as 146 160 employers Total 15.880 17.421
Total % Tourism Production contribution
Tourism Income
761 36 1.619
0 0 4
0 0 65
537
1
5
313 842 4.718 2.118 2.316 1.511 2.996 3.553 2.487 366 3.098 2.060 1.295 465 522
2 2 6 10 62 2 1 4 1 2 0 0 2 12 7
6 17 283 212 1.436 30 30 142 25 7 0 0 26 56 37
293
5
15
31.906
13,7
2.391
Note: The numbers have been rounded up, so slight differences may be found.
The table contains the following variables: •
GAV: Gross added value taken from the official CYSTAT data, from which the rest of the data is derived.
•
GDP: Gross domestic product obtained from the GAV, adding the taxes, and deducting the subsidies which are proportionally allocated among all sectors of the economy.
•
Production: considering that the percentage of income over production is 0,57 and the import reducing factor is 0,91, production is obtained by dividing the GDP by the product of both factors.
•
% Tourism Contribution: evaluates the share of tourism from the total production as a tourism expenditure. The values are estimated on the distribution of calculated tourism expenditure and/or tourism expenditure surveys.
•
Tourism income: each activity has a value of tourism income according to its defined contribution.
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CYPRUS TOURISM STRATEGY
11.3.
825
Impact on tax revenue 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. 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. Table 419. Expected increase of tax revenue as a result of the strategy
EuroStat classification
Rate over GDP/ Income
2015 Amount (Mill. Euro)
2030 Amount (Mill. Euro)
Value Gap Accum. 20152030 Amount (Mill. Euro)
D.2 Taxes on production & imports
15,00%
360
1.025
3.786
D.21 Taxes on products D.211 VAT taxes D.212 Taxes and duties on imports excl. VAT D.214 Taxes on products, except VAT & import taxes
13,00% 8,70%
310 208
883 592
3.262 2.189
0,20%
5
14
52
4,10%
97
276
1.021
D.29 Other taxes on production
2,10%
50
142
524
10,20%
244
695
2.569
9,20%
220
626
2.314
2,70%
64
183
676
6,40%
153
436
1.610
1,00%
27
69
255
9,00%
214
610
2.254
6,10%
145
414
1.531
D.5 Current taxes on income, wealth etc. D.51 Taxes on income D.51a+c1 of which, taxes on individual or household income incl. holding gains D.51b+c2 of which, taxes on the income or profits of corporations incl. holding gains D.59 Other current taxes D.61 Net social contributions D.611 Employers' actual social contributions D.613 Households' actual social contributions Tourism tax receipts (with Premium Destination Strategy) Tourism tax receipts (without strategy) Difference between receipts (with/without Premium Destination Strategy)
2,90%
69
196
724
34,20%
818
2.330
8.610
34,20%
818
1.142
2.426
-
-
1.188
6.184
Cyprus Economy tax receipts
34,20%
5.957
8.322
17.675
Note: Values at a 0% rate have been removed from the table Source: Ratio over GDP from Eurostat 2014 assuming will remain constant in the coming years Note: The numbers have been rounded up, so slight differences may be found.
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CYPRUS TOURISM STRATEGY
Impact on 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 the 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:
Wealth
Sentiment & well-being
Generate wealth & well-being
Wealth
Sentiment & well-being
Generate wealth & well-being
Table 420. Impact of the Strategy on the quality of life for Cypriots
1. Experience Cyprus Programme
3
4
2
12. Seasonality reduction
2
2
4
2. Cyprus Quality Labels
4
3
3
4
2
3
3. Visual Pollution
1
4
3
2
3
4
4. National Tourism Planning
2
4
4
13. Wise Tourism Index 14.Carbon Footprint reduction 15. “Made in Cyprus” & “Soul of Cyprus”
3
2
4
5. Cyprus Tourism growth model
2
4
4
16. Competitiveness Unit inside CTA
4
1
4
4
1
4
17. Legal and regulatory framework
4
2
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
21. Tourism System management
4
3
4
4
3
3
22.Performance monitor
4
3
3
3 3
3 3
4. Seasonality Reduction
2. Products /Segments
4 4
2 4
2 3
4 3
3. Priority Source Markets
4
3
3
2
4
4
Initiatives
Component of the Strategy
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
11.4
826
Note: Average impact from low: 1 to high: 4
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Component of the Strategy
20. Governance System
5. Cyprus Quality Labels 6. Integrated Development Plan
CYPRUS TOURISM STRATEGY
11.5
827
3 different growth models for Cyprus 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 421. 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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Table 422. Main figures for each of the three proposed growth models
Component of the model
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13 14.
15. 16 17. 18.
19.
20.
21. 22.
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) 1 Taxation receipts from Tourism by 2030 (Million Euro) Total new employment by 2030 Total investment until 2030 (Million Euros) 1 % Public investment until 2030 Total tourist accommodation keys by 2030 (including Serviced Units)2 Existing tourist accommodation licensed keys by 2015 New tourist accommodation keys to develop by 2030 (including Serviced Units) 3 New Second Homes to develop by 2030 (excluding Serviced Units) Total new accommodation keys by 20303 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)
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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
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
A. “Standard model
CYPRUS TOURISM STRATEGY
Component of the model 23.
% of new second homes in rural environment by 2030 (excluding Serviced Units) Average size of new mixed-used resorts (keys) Number of resorts4 (average, min. and max.) Carbon footprint from tourism over total (Ktons of CO2) % Carbon footprint from tourism5 (2030)
24. 25. 26. 27.
829
A. “Standard model
B. “Premium & wise growth” model
C. “Premium & soft growth” model
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
1 Refer
to methodological note 1 for additional details about the method used. hotel keys (5.000) that are likely to be licensed are included 3 Unlicensed hotel keys (5.000) that are likely to be licensed are not included 4 Average Number of resorts = ((14)x (18) + (15)x(21)) / (24) = (25) 5 Refer to methodological note 2 for additional details about the method used. 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 Unlicensed
According to the figures for the components of the “Premium & wise growth” model, the strategy map will be the following: Figure 256. “Premium & soft growth” model 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%
PARTNERS Attractive business opportunities
CUSTOMERS An exceptional tourism experience
Strategic Processes DRIVERS
1.
2.
Total new Employment 33.000
Investment required (public & private) (M. €) 15.500
INVESTORS Attractive investment environment & opportunities 3.
SOCIETY Better quality of life and sustainability
4.
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
ENABLERS
P. Promote productiv ity improvement tools Q. Reengineer legal and regulatory framework R. Educate and train the right people
S. Dev elop air capacity
Conquer more better yielding customers
5.
Excel in planning and development
Develop a highly competitive diamond for the tourism sector
Attract the right amount of vetted investors and MSMEs
Wise tourism index 850/1000
Deliver an exceptional tourism experience
6.
Learn and growth
New tourism keys to develop 17.700
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 Note: Numbers have been rounded up, so slight differences may be found
Updated version 23.03.2017
Benefiting the local society and the environment
CYPRUS TOURISM STRATEGY
830
11.5.1 Methodological note 1: Investment and ROI a.
Investment per Growth Model The investment required for the implementation of the 3 growth models is calculated based on the following criteria:
b.
•
Soft Investment: Implementing the initiatives is considered to carry the same cost for all 3 alternatives.
•
Experiential System: The “World Average” alternative will have a similar number of experiences as the “Premium & wise” growth model, but at a lower cost per unit. The “Premium & soft” will require less experiences for its development.
•
Infrastructure & utilities: The “World Average” alternative will have more keys and related infrastructure to develop than the “Premium & wise” alternative. Even though the “Premium & soft” will require less infrastructure & utilities, there won’t be economies of scale due to the smaller size of these developments.
•
Tourist Accommodation & Real Estate: Each alternative requires a determined number of keys to develop, based on the projected tourism demand and the number of overnight stays. The ratios for hotels, Serviced Units and real estate differ depending on their distribution within urban, resorts and rural areas, as well on the size of the resorts.
Return of Investment The implementation of the strategy requires an investment to be made by both the private and public sectors, that will be justified if it provides an acceptable return over investment (ROI). The tourism investors, which include hospitality developers, and real estate developers will evaluate their own ROI based on the accumulated increased revenues/tax receipts from the 2015 baseline until 2030’s projected figures. •
Tourism revenues (deducting import effect) will increase as the number of higher-yielding tourists will increase. From the total tourism revenues, it is assumed that 15% will be profits.
•
Real estate sales will have a profit of 30%.
11.5.2 Methodological note 2: carbon footprint In order to calculate the carbon footprint of tourists staying in tourist accommodation, international standards have been considered: •
Dick Sisman & Associates, in their Tourism Destinations Carbon Footprints report dated 2007, estimate that the average footprint for UK tourists in Cyprus excluding flights is 18 kg of CO2 per bed-night, higher than the 6 kg of CO2 average domestic daily emission. In the same report, emissions in Mallorca are estimated at 5,5 kg of CO2 per bed-night.
•
Green Tourism Hotels monitor businesses’ energy emission and the average kg of CO 2 per bed-night range from 15 to 25 kg of CO2 per bed-night. US hotels have an average emission of 29,5 kg of CO2 per bed-night.
The European Commission has established in their 2020 climate and energy package a reduction of emissions by 20% from levels in the 1990s, although in the case of Cyprus, emissions are expected to be reduced by 5% from 2005 levels. In the roadmap for moving to a competitive, low-carbon economy in 2050, by 2030 the milestone establishes a reduction of emissions by 40%. In the case of Cyprus, the reduction is expected to be of 24% from 2005. Updated version 23.03.2017
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Overnight stay projections for 2030 will have an impact on CO 2 emissions. In the last 2 decades, emissions have significantly increased in Cyprus (despite the economic recession slowing down these emissions) but measures that are to be implemented by both EU and Cyprus Governments will contribute to changing this trend. Table 423. Cyprus CO2 emissions (Ktons CO2) 1990
1995
2000
2005
2010
2012
2013
2014
2020
2030
4,532
5,599
7,010
7,865
7,958
7,266
7,198
7,237
7,472
5,977
Source: Emissions Database for Global Atmospheric Research (EDGAR) and Projections based on EU guidelines
Cyprus is expected to comply with the CO2 emissions dictated by the EU, and therefore tourism will also benefit from efficiency improvement measures. In the calculations, it is assumed that by 2030, the current 18 kg of CO2 per bed-night (2007 data) will decrease by the same proportion as the overall emissions (i.e. by 24% since 2005) - down to 13,7 kg of CO2 per bed-night. This is a pessimistic scenario, as further improvements to the kg of CO2 per bednight can be considered.
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Part D Implementing the Strategy 12. Strategy implementation
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Chapter 12 Strategy implementation 12.1 Institutional framework for implementation of the CTS 12.1.1 Overview 12.1.2 Inter-Ministerial Committee for Tourism (IMCT) 12.1.3 The National Alliance for Tourism (NAT) 12.1.4 Office of the Tourism Strategy manager (OSM) 12.1.5 The National Tourism Authority (NTA)
12.2 Phased implementation 12.3 Overall Action Plan for the implementation (OAPI) 12.4 Major milestones and roadmaps 12.4.1 Long term milestones for 2017-2030 12.4.2 Short term milestones 2017-2020
12.5 Investment programme 12.5.1 Five types of investment 12.5.2 Distribution of investment by implementation phases 12.5.3 Overall investment for the period 2017-2030 12.5.4 The Cyprus Tourism Fund
12.6 Key success factors for the implementation 12.7 Critical activities for the upcoming 24 months 12.7.1 Activities to set up the institutional framework 12.7.2 Actions related to outcomes/initiatives 12.7.3 Actions related projects 12.7.4 Investment Glossary and Assumptions
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Chapter 12, Defines the institutional framework, methods and financial resources required to successfully implement the CTS. Section 12.1 specifies the key components of the institutional framework, as well as their main functions. Section 12.2, 12.3 and 12.4 focus on phased implementation of the CTS, including action plans and roadmaps for the implementation of each phase. Section 12.5 presents an estimate of the investment required in each phase, separating public, private, and other forms of investment. Sections 12.6 and 12.7 highlight the most important factors for successful implementation, as well as immediate and short term activities needed.
12.1
Institutional framework for the implementation of the CTS
12.1.1 Overview Implementing the CTS 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: The Inter-Ministerial Committee for Tourism (IMCT) -chaired by the President of Cyprus-, the Office of the Strategy Manager (OSM), the National Alliance for Tourism (NAT) and the National Tourism Authority (NTA). Figure 257. Institutional Framework for the implementation of the CTS
It is important to clarify that although these bodies will be responsible for leading and putting the CTS into action, they will not be able to fully implement the Strategy by themselves. This is due to the complexity of the tourism activity and the need to involve and coordinate several public organisations at national and sub-national level, engage the private sector and take into consideration the local population.
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12.1.2 Inter-Ministerial Committee for Tourism (IMCT) a.
Role The overall role of the IMCT is providing 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 facilitate and foster coordination among and within the national government bodies that should be involved in the activities included in the work plan of the CTS, and will promote efficiency in the use of public funds. It will also ensure that all relevant stakeholders, public and private, are mobilised and have the skills and tools to make a positive contribution to the development of tourism in Cyprus. The IMCT will work closely alongside the Office of the Tourism Strategy Manager (OSM) and will publish progress reports on the execution of the CTS every six months. A strong and committed IMCT will be vital to set up and monitor the pace of implementation of the CTS and provide the public resources needed to achieve the strategic objectives.
b.
Members The members of the IMCT should be top-level representatives of the Ministries that are directly involved in tourism as well as those having a significant impact on tourism development. Table 424. Ministries directly involved in the implementation of the Strategy • • •
Ministry of Energy, Commerce, Industry, and Tourism, (MECIT) Ministry of Education and Culture Ministry of Labour and Social Insurance
• • •
Ministry of Finance Ministry of Agriculture, Rural Development and Environment Ministry of Interior
The IMCT should ideally have between seven and ten members, and should be chaired by the President of the Government and/or their Deputy. The Head of the National Tourism Authority and the Chief Strategy Office should also sit in the Committee, later acting as Secretary. The Committee will not require its own staff as it can be serviced by the OSM and by the National Tourism Authority when needed for meetings, report drafting, and other secretarial services.
c.
Meetings The IMCT should meet monthly. Its quarterly meetings will be attended exclusively by the Ministers and must be chaired by the President and / or his Deputy. The IMCT will set up task forces to focus on particular issues and It is expected to consult regularly with key representatives of the tourism industry and with Government departments and agencies whose policies and actions significantly impact tourism development.
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12.1.3 The National Alliance for Tourism (NAT) a.
Role The main role of the NAT is to be the main government counterpart to discuss and reach consensus on major issues related to tourism development and promotion. Additionally, the NAT will collaborate and provide support on important and sensitive matters. The establishment of the NAT, its role, and activities, should be widely promoted, and the support from the highest government level should be made clear as it is a major step towards setting up a modern management system for the tourism sector in Cyprus.
b.
Members The NAT should have around 30 members including representatives from the tourism industry (such as sector associations and selected hoteliers, tourist attractions, famous restaurants, large hosting companies) as well as representatives of related sectors (bankers, large food distributors, insurance companies, construction companies, airports, advertising companies / public relations). In total, they should represent at least between 30-50% of Cyprusâ&#x20AC;&#x2122; tourism business. The NAT can also set up working groups to address specific themes and issues. The NAT will be chaired by a representative of the private sector chosen by the members, and will have a high level Executive Vice-President who will be fully dedicated to the members. The Executive Vice-President should be a professional with proven experience in dealing with a variety of public and private stakeholders, able to interact with Ministers and government officers, and to mobilise and generate broad consensus within the industry.
c.
Meetings The NAT should meet quarterly, although additional meetings can be organised on an adhoc basis. An executive committee could be set up to follow up matters periodically as needed.
12.1.4 Office of the Tourism Strategy Manager (OSM) a.
The Roles of the OSM The Office of the Strategy Manager (OSM) will be set up under the Office of the President of Cyprus, and will directly report to the President. The OSM will oversee the development, organisation, implementation, and management of the Tourism Strategy in order to achieve the Vision. The OSM has three main roles: Process designer, process owner and process coordinator. The key responsibilities of each role are explained below.
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Table 425. The three key roles of the OSM Role 1. Designer
Key responsibilities The OSM will be responsible of defining the Strategy management framework and its governance conventions (‘the rules of the game’), as well as designing and clarifying the management process to guarantee successful execution. The OSM also establishes the necessary tools for implementation, ensuring that they are in place and working coordinated. As Designer, the OSM should: • Design frameworks and processes for an integrated strategy planning and operational execution.
2. Owner of the process
•
Standardise terminology and indicators of performance.
•
Ensure communication with the IMCT.
The OSM defines, develops, and supervises the following processes: preparing work plans, managing the Balanced Scorecard system, ensuring coordination, and reviewing and testing the Strategy in order to ensure accountability in all areas. As Process Owner, the OSM should: • Take responsibility for the Strategy’s development and execution.
3. Coordinator
•
Select and manage the system for Scorecard reporting.
•
Ensure that Scorecard data are updated in a regular and accurate manner.
•
Foster best practices aligned with the strategy across all public and private organisations.
•
Actively promote the understanding of the CTS and the Balanced Scorecard throughout the NAT and among key stakeholders, the IMCT and other relevant organisations.
The OSM will liaise with the NTA Finance, Human Resources, Marketing, and IT departments to make sure that the necessary resources are available to enable strategic initiatives, and that the Strategy is linked to the operational system (thus overseeing process analysis, reengineering and quality management). It will also support the NAT operational departments in the strategy implementation. As Coordinator, the OSM should: • Handle the preparation and dissemination processes of the Balanced Scorecard.
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Provide support in the selection of performance targets to be included in the Balanced Scorecard, as well as in the identification of what is needed to achieve them.
•
Work with the managers at the National Tourism Authority and with the IMCT to ensure that the necessary resources and support are provided.
•
Gather inputs from teams and managers in the different organisations involved in the Strategy implementation and prepare status reports to be submitted to the IMCT and other relevant key stakeholders.
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The Mandate of the OSM and its key functions The OSM will be required to perform 6 key functions within the Strategy development and execution cycle as shown in the figure below: Figure 258. The OSMâ&#x20AC;&#x2122;s mandate: The 6 key functions to perform
1. The OSM will be responsible for planning and monitoring the Strategy implementation. It will submit annual work plans to the IMCT for approval and will prepare quarterly performance reports pursuant to the Balanced Scorecard. As a permanent member of the IMCT, the Chief Strategy Officer will report progress to the IMCT, suggest agendas for discussion and be responsible for the implementation of the agreements reached. 2. The OSM will be responsible to foster alignment of the activities of Government bodies involved in the Strategy implementation with the work plans, as well as with the strategies and guidelines provided by the CTS. It will also coordinate efforts with key stakeholders to annually review the CTS, introducing the necessary modifications. 3. The OSM will report quarterly to the IMCT in Strategy Review Meetings where the performance against targets set at the beginning of the year will be presented and discussed. 4. The OSM will prioritise and select strategic initiatives, and will prepare the work plans to be carried forward after approval by the IMCT 5. The OSM will be in charge of ongoing Strategy Communication and Change Management, coordinating the necessary efforts. The activities planned will be reflected in the annual work plans. 6. Finally, the OSM will be responsible for Knowledge Management, Project Management Unit, and Technical Assistance programmes. The following table shows more details regarding the tasks and responsibilities of the OSM in each of its 6 key functions.
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Table 426. The 6 key functions: OSM tasks, roles, and responsibilities Key functions and main tasks
Roles
1. Strategy Planning • Strategy development and update •
Strategy clarification/articulation
•
Setting / Revising strategic Designer & directions Owner Strategy translation
• •
Responsibilities •
Lead the Management Team in Strategy clarification & review
•
Work with experts to evaluate strategic hypotheses and reshape the Vision.
•
Create the Change Agenda and the case for change
•
Facilitate the transformation of the Strategy into strategic objectives, KPIs, targets and initiatives
•
Facilitate filtering to NTA Departments as well as support units and other public stakeholders by means of the IMCT.
•
Partner with units and departments to link the Strategy with the budget
•
Cooperate with the department of finance/budgeting to align the Strategy to their operational/business plans
•
Coordinate with human resources department at the NTA and other relevant organisations to ensure that their practices are aligned with the CTS
•
Make sure that data is collected and analysed in order to put the report together
Strategy Map and Balanced Scorecard (lined set of objectives, KPIs, target setting and initiative prioritisation)
2. Alignment •
Organisational alignment
•
Deploy strategy by filtering to level 2 and level 3
•
Operational alignment
•
Link processes, operational plans, and budgets to the strategy
•
Human Capital Development alignment
•
Link personal goals and incentives plans to the Strategy
Owner
3. Strategy Performance Management •
Performance reviews
•
Design strategic performance reporting
•
Highlight strategic issues to be discussed
•
Set review meetings and agenda focused on the Strategy
•
Ensure that Strategy Review Meetings take place on a regular basis
•
Ensure the timely and accurate reporting to the Office of the President and the Head of the NTA and prepare annual reports
•
External reporting
•
Prepare quarterly, semiannual, and annual reporting to the highest authorities and prepare reports
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Owner
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Key functions and main tasks
Roles
4. Initiative Management • •
Selection and prioritisation of the initiatives Building the business case
• •
•
Coordinate the process of initiative prioritisation and report on strategic actions across public authorities and agencies involved (by means of the IMCT)
•
Lead key initiatives and supervise the project
•
Drive Strategy communications (both external and internal) by developing and executing the communication plan (supported by communication experts)
•
Drive benchmarking, surveys, and data analytics to ensure strategic learning
•
Facilitate the dissemination of knowledge, creating the right forums to share best practices
Owner Create awareness among all & stakeholders Coordinator Ensure stakeholder alignment
6. Strategic learning & knowledge sharing • Benchmarking and Strategy Coordinator related surveys •
Responsibilities
Owner & Coordinator
5. Strategy Communication & Change Management
Business analytics
Other processes where the OSM has a role (leading or supporting) include: •
IT management
•
Regulatory management and reporting
•
Quality assurance
•
Health & safety and environmental management
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841
Proposed structure and recommended profiles The following chart shows the proposed organisational structure for the OSM. Figure 259. OSM proposed organisational structure
In order to guarantee smooth coordination and circulation of relevant information, the OSM should have a Single Point of Contact (SPOC) in each of the NTA Directorates as well as in every public organisation involved in the implementation of the CTS. Each SPOC should be fully briefed about the CTS at the outset and will be in permanent contact with the OSM. In their respective organisations, SPOCs will be responsible for gathering and disseminating relevant information about Strategy implementation. They will also provide support for timely planning and execution of activities under their responsibility and for the allocation of resources. The top management of all public authorities and agencies involved in the Strategy implementation will formally appoint a SPOC who should be 50-100% dedicated to CTS management activities. Staffing To fulfil the OSMâ&#x20AC;&#x2122;s functions, a team of 12 specialists will be required. Their main tasks as well as some guidelines about their profiles are outlined below:
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Table 427. Head of OSM Chief Strategy Officer (CSO) (1 position) Tasks •
•
•
•
Profile
Leads the effort to implement and manage the Strategy Management Framework. Is responsible for OSM management, tracking and resolving strategic issues, and monitoring and reporting progress to senior levels. Presents key findings and recommendations on Strategy Review Meeting performance. Identifies needs for human resources development and acts as mentor to the OSM staff.
• •
•
•
Over 15 years of practical and direct experience in Strategy Management. Deep understanding of strategic planning, strategy execution methodology, change management, investment, project management and problem solving. Good knowledge of the tourism sector and capacity to identify critical factors for the success of the Tourism Strategy Outgoing personality with strong interpersonal skills and proven experience of interaction with high level officers and a diversity of stakeholders
Table 428. Strategy Managers (3 positions) Tasks • •
• • • •
Build key relationships with SPOCs. Liaise and follow up on the inputs to be provided by the different organisations involved in the implementation. Build and update performance reports and Strategy Review Meetings. Provide technical assistance to the NTA Directorates. Perform analyses of problems, performance, and metrics. Provide support to the NTA and the IMCT as required, including research, and the coordination of schedules and deliverables.
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Profile • • • •
5-7 years of experience in Strategy Management They will report to and work closely with the Chief Strategy Officer. Previous experience in leading consulting firms in the tourism sector. Previous experience in other tourismrelated organisations is a major plus.
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Table 429. Analysts (5 positions) Tasks •
Profile
Provide support as needed including • research, document production, distribution, and coordination of schedules, materials, and deliverables • at the OSM central unit. • • •
Minimum 2 years of experience in Performance Management and Balanced Scorecard. Strong analytical skills and quantitative abilities. Motivated by challenging assignments and attention to detail. Excellent writing, presentation, and facilitation skills. A conceptual and strategic thinker.
Table 430. SPOCs at the NTA Directorates (3 positions) Tasks •
•
•
•
•
•
Primary interface in their respective Directorate regarding CTS management Lead CTS management activities in the Directorate and foster alignment with the approved work plans. Develop relationships with high level managers at the Directorate involved in performance management. Report to the Chief Strategy Officer and Directorate Heads on strategy performance and review. Follow up and integrate the performance indicators of Directorate’ departments. Prepare and facilitate the Strategy review meetings, keeping upper management informed.
Profile •
• • • •
Minimum of 2 years of experience in performance management including Balanced Scorecard. Strong analytical and quantitative skills. Objective oriented and focused on results. Excellent writing, presentation, and facilitation skills. A conceptual and strategic thinker.
The Strategy and Strategy Implementation Technical Support Unit (SITES) In the short-term, the OSM will be supported and shadowed by the Strategy and Special Projects Technical Support Unit composed of a team of 5-6 external specialised consultants and advisors that will assist the Chief Strategy Officer to better achieve the OSM objectives. The unit will also provide advice and technical support to the OSM team. The consultants and advisors will work with a team of Cypriot professionals that will receive training and acquire the qualifications to ultimately give continuity to the Strategy implementation unit after a two-year period.
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12.1.5 The National Tourism Authority (NTA) The decision to create a new NTA is based on the need to modernise the current practices. However, the government must ensure that the new organisation is fully committed to the CTS. The alignment of the NTA with the new strategy is vital for the successful implantation of the Strategy that will, in turn, contribute to sustained income from the tourism activity in the long term. Cyprus needs an innovative, fresh, and modern organisation, capable of fostering the successful implementation of the CTS in cooperation with other government organisations, the tourism industry, and international collaborators and partners. The new NTA should aim, among other things, at providing leadership for the tourism sector: encouraging innovation and entrepreneurship, planning for smart tourism development, fostering the development of memorable tourism experiences, promoting innovative systems to satisfy tourists, attracting the right investors and creating the conditions so that the tourism sector can thrive.
a.
Alignment of the National Tourism Authority with the CTS There is a tendency for Ministries of Tourism to be oversized, highly bureaucratic and fixed in old practices. This is often the result of getting overwhelmed with a high number of inefficient activities (part of habits and/or poor process design), as well as the lack of awareness and/or political willingness to rationalise and modernise the organisation. That said, this is what will probably happen as a consequence of the NTA absorbing the CTO unless decisive action is taken. It is imperative that the new NTA is in full compliance with the CTS to avoid having â&#x20AC;&#x2DC;an ice hockey team playing basketballâ&#x20AC;&#x2122;. Therefore, this report contains an organisational framework based on the experience in other destinations that also takes the CTS into account. For this reason, it is recommended that the new organisation largely leaves behind regulation and licensing tasks, which should be transferred to other Ministries, and instead takes up modern systems of tourism product labelling, endorsements, and tourism sub-brands so that the quality of all tourist services is stimulated in a new and effective way.
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The NTA organisation, functions, and responsibilities The organisational chart is as follows: Figure 260. NTA proposed organisational chart
The departmental structure for the National Tourism Authority is composed by:
1. Department of Integrated Planning Pinpoint how much, how and where to grow and monitor the implementation of these plans, as well as promote social responsibility, including sustainability. •
National, District and Site tourism integrated planning: general planning, master planning, Tourist Zones of National Interest, Geo. Info. System, etc.
•
Site and attraction planning.
•
Social responsibility (SR): Wise Index, social benefits, environmental managements.
2. Department of Investments and MSMEs Identification, support, and encouragement of both national and foreign investment processes, including the development of MSMEs in the Tourism Sector. It will collaborate with Cyprus Investment Promotion Agency. •
Investment Climate: coordination, improvement, etc.
•
Investment Management: search, value design, negotiation, one-stop shop, etc.
•
MSME Development: recruiting, support, JV & alliances, etc.
3. Department of Tourist Experience The NTA is responsible for the promotion and development of new and memorable experiences for tourists (product development) and the continual improvement of the quality of these services.
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•
Cyprus Top Experiences (CTE): planning, construction, promotion, management, etc.
•
Cyprus Signature and Brand Experiences: planning, operations, etc.
•
New Tourism Quality System: Quality label System, sub-brands, endorsements, rankings, etc.
4. Department of Competitiveness The NTA should encourage innovation, incorporation of new technologies, improving funding conditions, improvement of Cyprus's air capacity, the improving the legal and regulatory framework, efficient management of human capital, distinguishing between education and training, etc. •
Innovation and technology: new technologies, best practices, etc.
•
Tourism Management Intelligence System: research, market intelligence, etc.
•
Human Capital Development: awareness, education, training, labour conditions, etc.
•
Legal: Simplification, tourism law, outsourcing, etc.
5. Department of Visit Cyprus The NTA will be responsible for marketing Cyprus as an attractive destination. This is in order to attract more tourists with a higher daily expenditure per capita, originating from more source markets, who head to the country due to new motivations and travel more in the middle and low seasons. •
Marketing: branding, communication, distribution, etc.
•
Services for the industry: education, best practices, networking opportunities & alliances, fairs & workshops, etc.
There is an international trend of setting up National Offices for Tourism Marketing as public bodies with semi-private management or based on PPPs. Setting up a separate entity is an option for Cyprus. However, what is important is the quality of the marketing that the organisation is capable of producing whether it is a new independent body or not.
6. Department of Licensing and Inspections This is a small department focusing on collaboration (technical assistance, coordination, etc.) with other government bodies responsible for licensing and inspections. The NTA, however, will have a key role in implementing new strategies to promote quality.
7. District Delegations We recommend that the NTA optionally has offices in each district for more fluent interactions with the stakeholders (both public and private) in each district. This will allow for greater efficiency in service provisions and local alignment with the strategy.
8. Project Management Unit This unit will consist of one or more external experts and will focus on providing advice, education, training, and technical support during the first two years of implementation of the NTA, to ensure its development is effective.
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9. Themed Task Forces (with private sector) Joint working groups between the Administration and the Private Sector to discuss and reach an agreement upon matters related to the implementation of the strategy and operations management of the tourism sector. Group examples: quality system, improving public transport, marketing, etc.
10. Internal support (delivered by MECIT) Administrative functions including financial, legal, and auditing services, Human Resources, education and training, and procurement, among other, will be performed by the central services at the MECIT.
c.
Special comments Recruitment/staff selection process It is strongly recommended to appoint sound professionals for each position, based on objective criteria and specialised tests.
Executive training Whatever organisational structure is ultimately adopted, a major training effort targeting NTA senior officers and other technical officers will be essential to equip them with the necessary expertise and tools to effectively develop their responsibilities. It is advisable to deliver a ‘Mini-Master’ in tourism planning and management, lasting around 400 hours, including common and specialised topics. Key officers from other public organisations involved in the implementation of the strategy should also attend.
Technical assistance, advisory services, and the PMU The success of the strategy depends heavily on the NTA’s capacity to contract external services for a 2-3-year period to provide technical assistance and advisory services to the different departments of the NTA, and to staff the PMU.
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Phased implementation The figure below - known as an S-Curve graph - conveys how the impact of the CTS will evolve over the next 24 years along four different phases. The graph shows how tourism growth will be slow at the outset (phases 1), will then accelerate moderately as a result of the Strategy implementation (phase 2), and will increase rapidly (phase 3) until reaching a plateau (phase 4). Figure 261. Implementation phasing 2017-2030
Phase 1 Organising for growth (2017-2018): This phase will focus on laying the ground for planned growth. It will be an investment-intensive phase that will require hard work, including the execution of a range of activities such as the 1st set of experiences, investments in charming villages. Special attention will be given to establishing governing entities that will prepare the ground for implementing the different initiatives and projects. Successful completion of the initial phase will set up the institutional and managerial structure needed to fully enforce the Strategy by the end of 2018, taking into account the national and sub-national levels of government. Throughout this phase, an intensive communication campaign will be needed to target both international and local investors, announcing that the CTS has been launched and that the Government of Cyprus will undertake the necessary public investments. Phase 2 Take-off (2019-2020): During this phase, quick wins - projects in different clusters delivering value early- should be prioritised and executed. Key investments will be made in projects covering experiences (such as the Grand Tour of Cyprus), tourist accommodation and tourist infrastructure. Phase 3 Growth (2021-2025): In this phase, cluster development started in phase 2 will continue together with the development of new clusters.
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Phase 4 Stabilisation (2026-2030): This final phase of the CTS will continue in the direction of the previous phases, focusing on the completion of tourist infrastructure and supra-structure in key projects, mostly in terms of experience systems, accommodation facilities, as well as broadening and diversifying the existing tourist facilities and services.
12.3
Overall Action Plan for the implementation (OAPI) Considering the Initiatives and “Separate Action Plans” included in the CTS to reach every target set in the strategic plan (see part C of this document), the following OAPI has been prepared as a model for the implementation of the CTS. The main OAPI roadmap sets out a sequence of initiatives, summarizing the tasks that need to be completed, who is responsible for each task, their cost, and the timeframe to complete them. Since the CTS should be a live project, the action plan has been provided with a monitoring system and comprehensive oversight process. Key performance indicators (KPIs) will be used to monitor progress in the execution of initiatives and to assess whether the plan is reaching its goals.
12.3.1 Outcome 1. The Tourism Experience
Outcome 1: Deliver and exceptional tourism experience
2017
Cost (.000 €)
Initiatives and Work streams 14,9%
30.245
Initiative 1: Set up the "Experience Cyprus Programme"
7,7%
15.500
WS1: I nstall the Cyprus Experience Agency
0,4%
800
WS2: Start the Top Experience Programme
2,9%
5.800
WS3: Launch the Signature Experiences Programme
1,5%
3.000
WS4: Promote Brand Experiences
1,0%
2.100
WS5: I nitiate experience marketing and communication system
1,9%
3.800
Initiative 2: Introduce the Cyprus Quality Label System
3,4%
6.970
WS1: Set up the Cyprus Quality Labels Management Unit
0,5%
950
WS2:. Dev elop the Cyprus Quality Labels system
0,1%
200
WS3: Deploy the CQL system
0,3%
570
WS3: Market and promote the CQL system in Cyprus and the markets
1,6%
3.250
WS4: I mplement a strong monitoring and enforcement system
1,0%
2.000
Initiative 3: Run a visual pollution initiative
3,8%
7.775
WS1: Run "Dark spot" elimination programme
1,1%
2.215
WS2: "Care for Cyprus" education programme
1,5%
3.040
WS3: Enhance the built env ironment
1,2%
2.520
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2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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12.3.2 Outcome 2. Planning and development 2017
Cost (.000 €)
Initiatives and Work streams Outcome 2: Excel in planning and development
8,0%
16.205
Initiative 4: Implement the National Tourism Planning initiative
4,9%
10.025
WS1: Establish a Centralised Tourism Planning Organisation (CTPO)
0,5%
920
WS2: Launch Regional Tourism Dev elopment Master Plans
3,1%
6.200
WS3: Rev iew and Redraft the Legal and Regulatory Framework
0,4%
730
WS4: Establish the Land Acquisition Strategy
1,1%
2.175
Initiative 5: Steer Cyprus Tourism Growth modelling
1,7%
3.520
WS1: Establish a Dev elopment I ntelligence departmente at CTPU
0,2%
450
WS2: Start an online Dev elopment I ntelligence Centre
0,7%
1.420
WS3: Monitor and steer dev elopment processes
0,8%
1.650
Initiative 6: Install Product Development Unit
1,3%
2.660
WS1: Create Product Dev elopment unit within National Authority of Tourism0,2%
2018
2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
360
WS2: Elaborate strategic product portfolio dev elopment plan
0,6%
1.220
WS3: Start first 3 new product type dev elopments in 2017
0,5%
1.080
12.3.3 Outcome 3. Investors and Partners 2017
Cost (.000 €)
Initiatives and Work streams Outcome 3: Attract the right amount of vetted investors and MSMEs
6,5%
13.195
Initiative 7: Establish TourInvest Cyprus Unit within CIPA
2,2%
4.485
WS1: Activ ate the “Tourinv est Cyprus” Unit within CI PA
0,2%
370
WS2: Build trust among Cypriot and international inv estors
0,9%
1.900
WS3: Dev elop an attractiv e portfolio of inv estment oportunities
0,5%
1.045
WS4: Streamline inv estment procedures in Cyprus
0,6%
1.170
Initiative 8: Launch a MSME support programme
2,2%
4.500
WS1: Create a MSME support serv ice
0,5%
1.050
WS2: Dev elop a special start-up and entrepreneurship programme
1,7%
3.450
Initiative 9: Start Market Partnering Initiative
2,1%
4.210
WS1: Activ ate new central Market Partnering Unit within NTA
0,4%
870
WS2: Activ ate the NTA offices abroad
0,5%
1.010
WS3: Approach strategic partners
1,2%
2.330
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2018
2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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12.3.4 Outcome 4. Marketing and Seasonality
Outcome 4: Conquer more and better yielding customers
2017
Cost (.000 â&#x201A;Ź)
Initiatives and Work streams 42,0%
85.140
Initiative 10: Set up a new brand management system
5,7%
11.580
WS1: I mplement the branding system
1,1%
2.200
WS2: Align the new tourist brand v isual with the Strategy
1,2%
2.500
WS3: Perform an integrated 360Âş brand communication system
2,8%
5.680
WS4: Monitor the brand implementation and its performance
0,6%
1.200
Initiative 11: Implement a world-class Marketing Plan
30,7%
62.120
WS1: Carry out an Operational Marketing Plan
26,2%
53.100
WS2: Support the tourism industry
2,2%
4.530
WS3: Restructure the NTA offices abroad
2,2%
4.490
Initiative 12: Seasonality reduction initiative
5,6%
11.440
WS1: Create a PPS Product Club and a PPS label system
0,9%
1.920
WS2:Dev elop attractiv e products for the PPS
0,8%
1.710
WS3: Dev elop a specific PPS communication strategy
1,2%
2.510
WS4: Dev elop and implement a specific PPS sales system
1,1%
2.310
WS5: Prepare and implement the Winter Season strategy
1,5%
2.990
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2018
2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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12.3.5 Outcome 5. Benefits for local communities 2017
Cost (.000 €)
Initiatives and Work streams Outcome 5: Benefiting the local society and the environment
5,0%
10.220
Initiative 13: Elaborate the Wise Tourism Index
1,3%
2.700
WS1: Define Cyprus’ Wise Tourism I ndex
0,5%
1.070
WS2. Measure and publish the Wise Tourism I ndex results
0,4%
870
WS3: Prov ide technical support for local authorities for continuous sustainability 0,4% improv ement 760
Initiative 14: Foster carbon footprint reduction
2,1%
4.200
WS1: I mplement a programme assessing and calculating the carbon footprint
0,4%
850
WS2: Kickstart an educational programme
0,3%
600
WS3. Launch a practical carbon footprint reduction manual
0,1%
300
WS4: Support the tourism sector
0,7%
1.400
WS5: I mplement a “Carbon Footprint Friendly Company” programme
0,5%
1.050
Initiative 15: Launch “Made in Cyprus” and “Soul of Cyprus” initiative 1,6%
3.320
WS1: Launch the “Made in Cyprus” certification (MiC)
0,1%
300
WS2: Sell MiC products to the tourism industry
0,2%
450
WS3: Sell MiC products directly to tourists
0,1%
250
WS4: Promote 20 MiC shops in island hotspots
0,3%
600
WS5: Dev elop the “Soul of Cyprus” (SoC) concept and its inv entory
0,1%
300
WS6: Communicate and promote the SoC
0,3%
600
WS7: Prov ide technical assistance
0,4%
820
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2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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12.3.6 Outcome 6. Competitive diamond for the tourism sector 2017
Cost (.000 €)
Initiatives and Work streams Outcome 6: Develop a highly Competitive Diamond for the tourism sector 15,2%
30.745
Initiative 16: Create the Competitiveness Unit inside the NTA
4,2%
8.550
WS1: I nstall the Tourism Competitiv eness Unit
0,2%
500
WS2: Organise an annual Cyprus Tourism Competitiv eness Forum
1,1%
2.200
WS3: Directly support the use of best practices, new technologies, innov ation and partnerships
2,9%
5.850
Initiative 17: Reengineering of the legal and regulatory framework (partially 4,1% ongoing) 8.360 WS1: Elaboration of Cyprus Tourism Law
0,6%
1.200
WS2: Simplification of the current regulatory framew ork
1,0%
1.970
WS3: Create Public Electronic Platform for legal matters
0,7%
1.450
WS4: Create a One-Stop Shop/ fast track for administrativ e processes
0,9%
1.870
WS5: Facilitate regularisation of the unlicensed accommodation offer
0,9%
1.870
Initiative 18: Start Human Capital Initiative
5,0%
10.035
WS1: I mplement the “Cyprus Leadership Executiv e Education” programme0,4%
855
WS2: Launch an executiv e education programme at the NTA
0,6%
1.260
WS3: Upgrade the existing tourism education system
0,6%
1.280
WS4: Upgrade the existing tourism training system
0,8%
1.540
WS5: Create a Tourism Ov erseas Scholarship Programme
0,5%
920
WS6: Operate an innov ativ e online learning platform
0,6%
1.240
WS7. Training & educating foreign tourism labour
0,2%
450
WS8. Create the Cyprus Culinary Centre
1,2%
2.490
Initiative 19: Run Airline Partnership Initiative
1,9%
3.800
WS1: Activ ate Air Traffic Dev elopment Unit and a Tourism Connectiv ity Committee 0,4% (TCC) 750 WS2: Prepare demand opportunities
0,3%
660
WS3: Execute the airline partnership programme
1,2%
2.390
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2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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12.3.7 Outcome 7. Governance and management 2017
Cost (.000 €)
Initiatives and Work streams
2018
2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Outcome 7: Implement smart governance and tourism management framework 8,3% 16.800 Initiative 20: Install a new Governance System
2,9%
5.880
WS1: Constitute the Gov ernance framework
0,3%
550
WS2: Execute a Gov ernance programme
0,9%
1.770
WS3: Launch the Office of the Strategy Manager (OSM)
1,8%
3.560
Initiative 21: Transform tourism system management
1,9%
3.820
WS1: Set up the new National Tourism Authority
0,8%
1.590
WS2: I nv olv e key stakeholders in the Tourism System Management
0,6%
1.150
WS3: Launch the new Tourism System Management
0,5%
1.080
Initiative 22: Launch performance monitor
3,5%
7.100
WS1: Determine sector’s performance metrics
2,3%
4.700
WS2: Launch a Tourism I ntelligence Platform
1,2%
2.400
12.3.8 Separate Action Plans Separate Action Plans 1. Cyprus Brand
2017
Cost (.000 €) 7,2%
11.580
2. Products/Segments
11,4%
18.160
3. Priority Source Markets
61,4%
98.185
4. Seasonality Reduction
7,2%
11.440
5. Improvement of the Quality
4,4%
6.970
6. Integrated Spatial Tourism Development for major Tourism Areas
8,5%
13.545
TOTAL
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2018
2019
2020
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
159.880
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12.4
855
Major implementation milestones and roadmaps This section includes roadmaps showing the major milestones along the implementation process. Their aim is providing an overview of the scheduled initiatives and tasks to be carried out in each phase.
12.4.1. Long term milestones for 2017-2030 The figure below shows the roadmap for the next 14 years, considering the key milestones to be achieved in each period regarding: •
Cyprus TOP experiences developed.
•
Direct jobs generated.
•
Impact of tourism on National GDP.
•
Number of international tourist arrivals (business and pleasure trips).
•
Wise Tourism Index indicators.
•
New tourist accommodation keys developed.
•
Mixed-Use Resorts developed.
•
Tourism Zones of National Interest developed. Figure 262. Long term milestones 2017-2030 New tourism governance framework launched
11.000+ new hospitality keys operational 1st Top Experience launched
4 Top Experiences launched
2017-2020 Signature Experience Program (SEP) launched
22.000+ new hospitality keys operational 8 Top Experiences launched
2021-2025
15,000 new direct employments activated 1st TZNIs launched
33.000+ new hospitality keys operational
2026-2030
19.000 new direct employments activated
26.000 new direct employments activated
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.
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12.4.2. Short term milestones for 2017-20 The following roadmap shows the milestones for the next 4 years (2017-20). They are drawn from the 7 outcomes of the CTS with the aim of providing a general overview of the critical moments along the Strategy implementation process. Figure 263. First 4-year milestones 2017-20
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857
Investment programme The following chapter presents the total investment that will be required over the next 14 years to accomplish the goals of the Cyprus Tourism Strategy. The first part of the chapter describes the main types of investment considered in the Strategy, as well as the way in which investment is expected to evolve over the four phases along the 14-year lifespan of the strategy. The following part details the investment required to carry out the Cyprus Tourism by total and by type of investment, as well as the contributions by the public and private sectors and their distribution over time. The final section presents a proposal for the allocation of funding.
12.5.1 Five types of investment Successful implementation of the CTS will require significant investment over the next fourteen years, from both the public and private sectors. The breakdown is shown in the table below: Table 431. Five main types of investment Investment type Soft investment Strategy planning, 1 management, and execution (1)
Experience System Cyprus’ system of 2 tourist experiences (2)
Infrastructure and utilities 3 In tourist destinations (2)
Tourist accommodation excluding hotel 4 serviced units (For staying in Cyprus) (2)
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Comment
Public sector involvement
Investment related to planning, acquiring technology, encouraging innovation and quality, improving the legal framework, training, overhead expenditure of public bodies, etc. All of these activities are essential to successfully manage the implementation of the Strategy.
Very high (Over 80%)
This includes development of the experiential offer, upon which Cyprus’ competitive advantage will be calculated. It also includes: developing Cyprus’ “Top Experiences”, enhancing natural and cultural resources, restoring villages and traditions.
High (65-80%)
This investment is essential so that tourists can have convenient transport options to reach Cyprus and are able to move around once there. Utilities are vital to attract investment, reduce operational costs of tourism businesses, improve the wellbeing of the local communities, and reduce environmental impacts.
Low (15-35%)
Necessary to accommodate visitors and ensure an adequate level of comfort in resorts, both in urban and rural areas. It includes a large variety of accommodation: hotels, inns, B&Bs, campsites, guest houses, and special accommodation.
Very low (Below 5%)
CYPRUS TOURISM STRATEGY
Investment type
858
Public sector involvement
Comment
Relevant for the development of mixed-use resorts and beneficial to creating an Real Estate, including environment attractive to national and hotel serviced units international developers and investors. 5 (For staying in Cyprus) It includes a selection of villas, town houses in (2) varying sizes and styles, a number of which will be serviced units operated by hotels and available to tourists.
Very low (Below 5%)
(1) Soft (2)
investment Hard investment
12.5.2 Distribution of investment by implementation phases The figure below shows how investment will be spread over the next 14 years compared with tourism growth along the four phases of the Strategy implementation process. Figure 264. Investment Phasing Phase 2 Take Off
Phase 3 Growth
Phase 4 Stabilization
2021-2025
2026-2030
Low
Growth
High
Phase 1 Organizing for Growth
2017-18
2019-20
Tourism growth
Inv estment growth
Table 432. Development in four phases Phase
Investment typologies
1
Organising for growth (2017-2018)
2-year activity plan 10-12% of the total investment.
2
Take Off (2019-2020)
2-year activity plan 17-19% of the total investment.
3
Growth (2021-2025):
5-year period, in which significant investment will take place, amounting to 28-30% of the total investment.
4
Stabilisation (2026-2030)
This final development stage will need 41-43% of the planned total investment.
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12.5.3 Overall investment for the period 2017-2030 The implementation of the strategy has two main purposes that will require significant investment: 1. Develop new tourism offer: hard investment in tourist accommodation, infrastructure, tourism products, etc., as well as the soft investment required to manage related projects. 2. Improve the existing tourism offer: hard investment in tourist accommodation, infrastructure, existing tourist products etc., as well as the soft investment required to manage related projects. The method used to estimate investment is similar and in both cases based on the “tourist accommodation / total investment” ratio determined by the experience THR gained from previous projects. Given that the 5 types of investment are linked to investment in tourist accommodation: •
The total investment to develop new tourism offer will be 1,5 times the cost of the investment in new tourist accommodation (hotels, serviced units, and real estate, although the weight of real estate will be reduced).
•
The total investment needed to improve the current tourism offer is calculated using the same 1,5 ratio over the investment needed to upgrade existing accommodations. In this case, based on comparable destinations such as Istria and Playa de Palma, the investment needed is estimated to be 30% of the construction cost of new facilities.
Additionally, to estimate each of the investment components, a set of hypotheses and assumptions resulting from THR’s experience and know-how in similar projects have been applied to distribute the estimated collateral investment. This method was used for both new investments and improvements on the current tourism offer.
a.
Total investment The total investment (private and public) needed to implement the Cyprus Tourism Strategy until 2030 is estimated at 18.576 Million Euro. The investment to be funded by the Government of Cyprus through allocations of the national budget is estimated at 1.906 Million Euro throughout the 14-year lifespan of the Plan. This amount represents 10% of total investment.
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The breakdown of the projected investment by types of investment is as follow: Table 433. 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
619
3%
90%
b. Experiential System
106
160
174
158
597
3%
63%
c. Infrastructure & Utilities d. Tourism Accommodation & Resorts (excluding hotel serviced units) e. Real Estate (including hotel serviced units)
986
1.643
1.972
1.972
6.572
33%
15%
526
802
1.278
2.406
5.012
23%
0%
756
1.224
1.623
2.174
5.776
38%
0%
Total
2.466
3.938
5.270
6.902
18.576 100% 10%
Note: The numbers have been rounded up, so slight differences may be found. Note: Tourism developers 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.
A distribution of investment over four time periods, as well as the split between public and private sectors, is presented below: Table 434. Distribution (private-public) of projected investment 2017-2030 (Mill. Euro) Concept Private Public Total
Phase 1
Phase 2
Phase 3
Phase 4
Total
2017-18
2019-20
2021-25
2026-30
2017-30
2.213 253 2.466
3.534 404 3.938
4.729 541 5.270
6.194 708 6.902
16.670 1.906 18.576
% 90% 10% 100%
Note: The numbers have been rounded up, so slight differences may be found.
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 will also benefit from it. The investment required to develop the new accommodation, tourist products and attractions, infrastructure and utilities etc. amounts to 15.133 Million Euro, equivalent to 81% of the total investment. The investment needed to improve the existing accommodation, tourist sites, attractions, and services, as well as to update current infrastructure and utilities, amounts to 3.443 Million Euro, or 19% of the total investment. The distribution of investment by type, split between new investment and investment to improve the current tourism offer, is provided below:
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Table 435. Distribution of projected total investment 2017-2030 (new investment + improvements of the current offer) (Million Euro) Typology a. “Soft-Investment” b. Experiential System c. Infrastructures & Utilities d. Tourist accommodation (Services Units excluded) e. Real Estate (Services Units included)
Total % of total 2017-30 investment 619 3% 597 3% 6.572 33%
Total
New 514 382 5.040
Type of investment % Improvement % 3% 105 3% 2% 215 6% 33% 1.532 45%
5.012
23%
3.421
23%
1.591
46%
5.776
38%
5.776
38%
-
0%
18.576
100%
15.133 100%
3.443
100%
Note: The numbers have been rounded up, so slight differences may be found.
Table 436. Distribution (new investment / improvements of current offer) of projected total investment required 2017-2030 (Million Euro) Concept New Investment Investment to improve current offer Total
Phase 1 2017-18 2.006
Phase 2 2019-20 3.212
Phase 3 2021-25 4.301
460
727
969
2.466
3.938
5.270
Phase 4 2026-30 5.614
Total
%
15.133
81%
1.288
3.443
6.902
18.576
19% 100%
Note: The numbers have been rounded up, so slight differences may be found.
b.
Soft Investment The total indicative budget for soft investments needed to manage and implement the CTS is 619 Million Euro. This does not include infrastructure costs (part of the investment plan budget, according to previous points) nor does it include current civil servant and other employees’ salaries. The table below shows the breakdown of budget by task typology over the next 14 years: Table 437. Soft Investment by task typology 2017-2030 (Million Euro)
Tasks typology Planning Executing Follow up / Monitoring Technical assistance and education/ training services (2) Miscellaneous (2%) Total
Phase 1 2017-18 6 67 4
Phase 2 2019-20 7 80 4
Phase 3 2021-25 16 157 10
Phase 4 2026-30 11 145 7
Total (1) 39 449 25
14 2
17 2
37 5
26 3
94 12
92
110
224
192
619
The costs of infrastructure and current employee salaries are not included, but it includes the salaries of the related new management structures. (1) Percentage of estimated budget dedicated to improving current tourism offer = 17% (2) Technical assistance and education/ training services include those services designed to support the execution of the Tourism Strategy: OSM and PMU advisory services, cluster master-planning advisory services and other advisory and technical assistance services to improve organisational policy development, decision-making, management and administration; programme and/or project management and administration as well as professional advice and assistance for Tourism Strategy implementation. Updated version 23.03.2017
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Note: Some numbers have been rounded up/down, so slight differences may be found.
c.
Investment in the Experience System The investment needed for the 14-year period to implement the experience and attractions system as per the CTS totals 597 Million Euro. The contribution from the Government budget is estimated at 248 Million Euro, representing 65% of the total investment in the Experience System. The investment required to develop the new tourism products is estimated at 382 Million Euro. The breakdown of the projected investment required is as follows: Table 438. New product investment for Cyprusâ&#x20AC;&#x2122; Experience System 2017â&#x20AC;&#x201C;2030 (Mill. Euro) Avg. investment estimated 2017-30 x Unit 30 5 Mill. Euro Unit
Concept 1. Top Experiences in Cyprus 2. Brand Experiences (activation & support) 3. Signature experiences (activation & support) 4.Activation of sites and tourist attractions 5.Miscellaneous Total
Phase 1
Phase 2
Phase 3
Phase 4
Total Invest% ment Public (1)
23
38
45
45
150
70%
3
0,5 Mill. Euro
0,3
0,4
0,4
0,5
1,5
80%
25
2,5 Mill. Euro
6
9
16
31
63
20%
15
10 Mill. Euro
30
45
45
30
150
80%
4
5
5
4
18
50%
63
98
111
110
382
-
5%
65%
NTA + other Government authorities = Total Public Sector Some numbers have been rounded up, so slight differences may be found (1)
The investment needed to improve the tourism product is estimated at 215 Million Euro. The breakdown of projected investment required is as follows:
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Table 439. Investment to improve a current Cyprus Experience System tourism product 2017–2030 (Million Euro) Units
Concept
Unit
Total Avg. investment 2017- estimate Phase Phase Phase Phase Invest% 30 x Unit 1 2 3 4 ment Public1
1. Sites and tourism products and attractions upgrade
Site / 10 attraction
5 Mill. Euro
10
15
15
10
50
100%
2. Upgrading charming villages and town centres (1)
Villages
25 Mill. Euro
10
13
13
15
50
80%
Tour. 500 Services
100.000 Euro
10
15
15
10
50
15%
Locations 100
550.000 Euro
11
17
17
11
55
60%
-
2
3
3
2
10
60%
215
65%
3. Improve current tourism services (2) 4. Dark spots/visual pollution elimination 5. Miscellaneous (2%)
-
2
-
Total
43
62
62
48
NTA + other Government authorities = Total Public Sector Improving the environment; reducing visual pollution (3) Approximately 50% of the current tourism services offer (1) (2)
Some numbers have been rounded up, so slight differences may be found
d.
Infrastructures and utilities The total investment needed to execute the infrastructure and utilities programme required by the CTS over the 14-year period comes to 6.572 Million Euro. New investment is distributed as follows: •
Clusters and National Tourism Interest Zone infrastructure and utilities investment amounts to 2.958 Million Euro. The approximate amount to be invested by the Government of the Republic of Cyprus is 976 Million Euro, representing 33% of the total investment.
•
Resort infrastructure and utilities investment amounts to 3.615 Million Euro, 100% of which will be sourced from the private sector.
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The breakdown of the projected investment for the new infrastructure and utilities required is as follows: Table 440. Investment in new infrastructures, utilities, and public services 2017-2030 (Mill. Euro) Phase 1
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
1.1 Transportation & services
246
411
493
493
1.643
25%
1.2. Utilities (water, energy, telco, etc.)
sewage, 148
246
296
296
986
1.3. Public services security, etc.)
(health, 49
82
99
99
329
444
739
887
887
2.958
33%
2.1. Transportation & services
197
329
394
394
1.314
0%
2.2. Utilities etc.…)
345
575
690
690
2.300
Subtotal 2
542
904
1.084
1.084
3.615
0%
Total (1+2)
986
1.643
1.972
1.972
6.572
15%
Concept 1.Clusters & TZNIs infrastructure
Subtotal 1
30% 80%
2. Resort infrastructure (water,
sewage,
0%
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
Investment to improve the current tourism offer is split as follows: •
Cluster and National Tourism Interest Zones infrastructure and utilities investment amounts to 2.958 Million Euro. The approximate amount to be invested by the Government of the Republic of Cyprus is 976 Million Euro. This amount represents 33% of the total investment.
•
Resort infrastructure and utilities investment amounts to 3.615 Million Euro. 100% will be sourced from the private sector.
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The breakdown of the projected investment to improve the current infrastructure and utilities required is as follows: Table 441. Investment to improve current infrastructure, utilities, and public services 20172030 (Million Euro) Phase 1
Concept 1.Clusters & TZNIs infrastructure
Phase 2
Phase 3
Phase 4
Total Invest.
% Public1
1.1 Transportation & services
57
96
115
115
383
25%
1.2. Utilities (water, sewage, energy, telco, etc.)
34
57
69
69
230
30%
1.3. Public services (health, security, etc.)
11
19
23
23
77
80%
Subtotal 1
103
172
207
207
690
33%
2.1. Transportation & services
46
77
92
92
306
0%
2.2. Utilities (water, sewage, etc.â&#x20AC;Ś)
80
134
161
161
536
0%
Subtotal 2
126
211
253
253
843
0%
Total (1+2)
230
383
460
460
1.532
15%
2. Resort infrastructure
NTA + other Government authorities = Total Public Sector Note: The numbers have been rounded up, so slight differences may be found. (1)
e.
Tourist accommodation Investment (excluding Hotel Serviced Units) The investment needed to develop the tourist accommodation (excluding hotel serviced units) required by the CTS for the 14-year period amounts to 5.012 Million Euro: 3.421 Million Euro for new tourist accommodation and 1.591 Million Euro to improve the current offer. In both cases, 100% of the investment will be sourced from the private sector. The breakdown of the projected investment required to develop new tourist accommodation is as follows: Table 442. Investment in new tourist accommodation 2017-2030
Concept 1. Hotels and Hotel apartment 2. Inns 3. Special lodging (1)
4.Guest houses & B&Bs 5. Campsites and glamping Total
Unit
Average Phase Phase Phase Investment 1 2 3 Phase Total x unit (Mill. (Mill. (Mill. 4 Investment Units 2017-30 (Euro) Euro) Euro) Euro) (Mill. Euro) (Mill. Euro)
Key
15.074
210.000
317
475
791
1.583
3.166
Key
589
75.000
7
11
13
13
44
Key
428
200.000
13
21
26
26
86
Keys
2.408
50.000
18
30
36
36
120
653
7.500
1
1
1
1
5
355
539
868
Parcel
19.153
178.597
Villas, Mansions, Apartments, Rural Farms, etc. Note: Some numbers have been rounded up, so slight differences may be found. B&B = Bed and Breakfast (1)
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3.421
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The breakdown of the projected investment required to improve the current offer is as follows: Table 443. Investment in improving current tourist accommodation 2017-2030 Phase Average Total 1 Units Investment x Investment (Mill. Unit 2017-30 unit (Euro) (Mill. Euro) Euro) 125.000 x 1.348 135 Key 43.144 25%(3)
Concept 1. Keys to be refurbished (1) 2. Non-licensed keys that need refurbishment (2)
Key
Total
Phase 2 (Mill. Euro)
Phase 3 (Mill. Euro)
Phase 4 (Mill. Euro)
202
337
674
21.572
75.000 x 15%(4)
243
36
61
73
73
64.716
24.583
1.591
171
263
410
747
Note: Some numbers have been rounded up, so slight differences may be found. (1) THR experience shows that hotels need regular refurbishment to keep their quality standards, different types of refurbishment take place every 12,5 years and 20 years stated as a % of the construction cost. (2) THR estimate based on comparable studies is that unlicensed keys requiring upgrade would represent about 50% of current licensed accommodation offer (3) Current accommodation of 43.144 is assumed to have an average construction cost of 125.000 Euro and refurbishment cost of 25%. (4) Estimated unlicensed accommodation of 21.572 (50% of 43.144) is assumed to have an average construction cost of 75.000 Euro and refurbishment cost of 15%.
f.
Real Estate (excluding Serviced Units) The investment needed to develop the estimated real estate (including serviced units) required by the CTS over the 14-year period comes to 5.776 Million Euro. 100% of the investment will be sourced from the private sector. The breakdown of the projected investment required to develop new Real Estate is as follows: Table 444. Investment in new Real Estate 2017-2030
Concept 1. Hotel Serviced Units
Unit
Average Units investment x unit 2017-30 (Euro)
Total (Mill. Euro)
Phase 1 (Mill. Euro)
Phase 2 (Mill. Euro)
Phase 3 (Mill. Euro)
Phase 4 (Mill. Euro)
1.1 Villas
Villa
2.937
400.000
1.175
117
176
294
587
1.2 Apartments
Apt.
6.860
150.000
1.029
103
154
257
515
9.797
250.000
2.204
220
331
551
1.102
Subtotal 1 2. Second Homes 2.1 Villas
Villa
6.699
300.000
2.010
301
502
603
603
2.2 New Apartments
Apt.
15.630
100.000
1.563
234
391
469
469
22.328
160.000
1.072
1.072
Subtotal 2 Total 1+2
3.573 5.776
536 756
893 1.224
1.623
2.174
Note: Hotel Serviced Units distribution: 30% villas and 70% apartments. Second homes distribution: 30% villas and 70% apartments.
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Construction costs for Serviced Units are more expensive compared to the Real Estate (€100.000 difference for villas and €50.000 for apartments) as they include Furniture, Fixtures & Equipment as well as a contribution to the Hotel infrastructure (mechanical equipment, facilities, etc.) as they operate like a Hotel key, while the Real Estate includes only the construction cost of the residential unit (limited to land & construction). Construction costs are based on THR research and consultation with local and international hotel and real estate developers. Some numbers have been rounded up, so slight differences may be found.
12.5.4. The Cyprus Tourism Fund In order to ensure resources for the implementation of some initiatives included in the strategy, it is strongly recommended to set up a Cyprus Tourism Fund (CTF) with an average annual budget of 40 Million Euro. The National Tourism Authority will manage the fund and write the regulations. In principle, eligible public bodies and private sector players will be invited to submit applications for grant funds on a co-financing modality with a maximum amount pre-determined. Taking into consideration the strategic priorities, the breakdown of the allocation of the resources from the Cyprus Tourism Fund should be as follow:
a.
Private sector investments to develop new products and services: 15 - 20 Million Euro annual average These funds should be dedicated to developing new products and services provided by the private sector. Examples of actions eligible for funding are:
b.
•
Developing innovative tourism services (i.e. new business models, implementing innovative ideas)
•
Developing high value added products, experiences and services targeting strategic market segments (i.e. Sun & Sea, itineraries and culture, Meetings, Amateur – Pro Sports and Cycling).
•
Clustering activities including a diversity of tourism service providers and creative industries aimed at diversifying the tourism product portfolio and extend the tourism season.
Maintenance and upgrading of world-class tourist sites and attractions: 5 - 7 Million Euro annual average Most main tourist sites and attractions in Cyprus are maintained and operated by groups in the voluntary, community and local government organisations. However, these groups often lack the material and human resources to properly manage sites that are key to attract international tourists and enhance their experience. Thus, the CTF should allocate funds to finance projects aimed at restoring and upgrading tourism sites and attractions with the objective of maintaining and improving their appeal to international tourists. Projects may include technical assistance, buying equipment and small works or a combination of these.
c.
Upgrade charming villages and town centres: 4 -5 Million Euro annual average Many villages and town centres in Cyprus are currently of little or no interest to international tourists mainly due to visual pollution. The CTF will support actions/projects that contribute to the restoration of the visual aesthetics of selected public spaces of interest to existing and Updated version 23.03.2017
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potential visitors (i.e. painting facades, removing exposed utility wires, proper storage for solid waste, removing/disguising TV, and telephone antennas, installing adequate public furniture, improving terraces of cafes and restaurants, create viewpoints and pedestrian areas, install signposting, etc.).
d.
Technical studies and product innovation: 6 - 8 Million Euro annual average Given that the tourism sector faces strong international competition, introducing innovative proposals is vital for the survival of the tourism industry in Cyprus. There is real potential to generate new demand with financial contributions to support innovative projects in the public realm or to be implemented under PPP agreements. The CTF could finance market studies, master plans for new projects, feasibility studies and the preparation of executive projects, among other.
e.
Upgrade human resources capabilities and skills and quality control: 2 - 3 Million Euro annual average An allocation from the CTF will be dedicated to support human resource development, improving the productivity of the tourism businesses, and introducing service quality systems. As long as the majority of the tourism industry is made of small-medium enterprises, there will be a need to support them with: •
Professional development
•
Enterprise development
•
Skills training
In order to be competitive and attractive to investors, the Cypriot tourism industry needs to improve its productivity and the CTF should provide training for managers of tourism service providers. Additionally, to improve the competitiveness of Cyprus as a tourism destination, it is vital to improve the quality of the products and services on offer and it is recommended to introduce quality systems that will define standards to be observed by tourism businesses countrywide. Quality standards should be based on international best practices and benchmarks as It has been shown that exposure to competitors is an effective way to show tourism service providers what can and must be done to successfully compete in the international market.
f.
Support “E-marketing”: 1 - 2 Million Euro annual average Online communication and distribution channels are key marketing tools in the current market scenario. This allocation from the CTF will finance projects aimed at expanding and improving the use of e-marketing by the public and private players involved in tourism promotion and commercialisation as a way to interact with both current and potential visitors. It is vital that the industry uses the new tools and channels to its full potential. Some examples of projects that could be financed are: •
Development of integrated booking technologies and standards for services/products to be featured in online portals.
•
The generation of comprehensive, quality online content.
•
The development of itinerary planning and mapping software so tourists can search for products by location.
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Key success factors for implementation Key success factors define the areas of performance which are essential for the successful implementation of the Strategy and to reach its goals and objectives. Six key success factors have been identified:
a.
•
Engaging all levels of staff across Government organisations involved
•
Aligning the National Tourism Authority organisation and its business processes with the CTS.
•
Ensure proper management of the implementation process.
•
Launching Technical Assistance and Project Management Unit (PMU).
•
Reinforcing bottom-up and top-down communication.
•
Delivering executive training to Government officers.
•
Engaging the stakeholders.
Engaging all levels of staff across Government organisations involved An enormous amount of energy is required to bring strategies to fruition and it must be generated from within the organisation. Thus, it is of critical importance to engage all levels of staff throughout the NTA and related public organisations because the successful implementation of the Cyprus Tourism Strategy will depend on their clear understanding of their contribution, their commitment and dedication. The successful execution of the Strategy will require carrying out a large amount of related tasks that should be divided into manageable units and allocated to specific organisations and staff members to be completed within the scheduled timeframe. Communication within the NTA and with other public organisations will be essential to ensure smooth implementation. Messages need to be concise and consistent, making public officers involved feel that the Strategy is achievable, creating awareness about their respective roles and sharing progress. A change management programme should be launched from the beginning, informing the staff and senior management about what is required from each organisation to ensure that the objectives of the CTS are realised in full.
b.
Aligning the NTA organisation and its business processes with the CTS In order to effectively contribute to the execution of the Cyprus Tourism Strategy, the NTA must align its departments, supporting functions and external partners (Ministries, public agencies, private sector, etc.) with the Strategy. Strong commitment from the NTA staff is needed as well as willingness to dedicate the time needed to complete each project. Full involvement is also required to ensure the understanding and the undertaking of the Strategy and the Action Plans. Each staff member must be aware that they are fundamental in making sure that everything runs according to plans. Coordination will create focus across the organisation, making it easier to generate synergy along the Strategy execution.
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The process will ensure that the NTA is fully-aligned so as to accomplish the Strategy implementation, both operationally (the businesses’ ability to deliver its mission) and strategically (how the business is managed to achieve its vision). It includes administrative tools that will give authority to the management team, ensuring accountability and the creation and monitoring of performance objectives (i.e. performance management).
c.
Ensure proper management of the implementation process This is a critical function and the reason why a formal Office of the Strategy Manager (OSM) has been included in the institutional framework. The OSM will be responsible for prioritizing, managing, monitoring, and measuring the results of all activities related to the implementation of the Cyprus Tourism Strategy, it will ensure the efficient, effective, and equitable allocation of funding for the strategy-aligned initiatives and will keep stakeholders informed and engaged. Managing the implementation process should also include:
d.
•
Aligning and updating the plan. Continuously and proactively aligning the Strategy to respond to key market developments and trends (technological, environmental, sociocultural, political, and economic, competition, etc.).
•
Aligning the goals of the Strategy with the performance indicators. The metrics and measurements for each strategy direction and initiative are defined in the Balanced Scorecard that will be used to monitor performance and guide the decision making throughout the process.
•
Taking a results-driven approach. Ensuring a results-driven, streamlined, dynamic and adaptable tourism structure from national to local level, clear on roles, responsibilities, and relationships (thus avoiding unnecessary bureaucracy).
•
Focusing on Sustainability. Continuously focusing on sustainability and competitiveness, balancing economic, social, and environmental issues.
Launching the Technical Assistance and Project Management Unit (PMU) Continued support to the NTA will be provided through technical assistance and project management coordination will increase the chances of an effective and timely implementation of the work plans prepared to deliver the strategy. The PMU will provide specialised support in implementing initiatives, training programmes and advisory services. Specifically, the PMU will carry out the following tasks: •
Defining and maintaining project management standards across the organisation.
•
Seeking standardisation in the use of concepts, indicators, reports, etc.
•
Being the source for documentation, guidance and metrics in project management and execution.
•
Supporting the OSM by designing work teams, reporting systems, and training programmes.
•
Aiding with methodology, consensus, and coordination on all projects.
•
Developing staff competencies and abilities, including coaching and mentoring.
•
Helping the OSM to prioritise projects, making sure those with highest priority have the resources required.
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871
Reinforcing bottom-up and top-down communication Strategies are successful when bottom-up and top-down communication is adopted. Communication will be needed at the outset to present the strategy to the NTA staff, explaining how it will be implemented, and outlining how they will be involved in the process. Along implementation, the NTA’s staff will provide inputs through feedback surveys, focus groups, regular and ad-hoc meetings, among other.
f.
Delivering executive training to Government officers NTA and other relevant public officers will receive training on subjects related to the implementation and execution of the strategy, as well as selected topics directly related to the management of tourism development from a public-sector perspective. Training sessions will cover all components of the Cyprus Tourism Strategy -development, design of travel/holiday experiences, SME development, human capital, investment promotion, marketing, and communications- as well as complementary topics such as strategic thinking, decision making and analytical skills, among other. During these sessions, public officers will gain valuable insights and knowledge that will increase their confidence and ability to successfully execute the Strategy.
g.
Engaging the stakeholders •
Promoting community participation. Fostering community participation and benefits should be a cross-cutting strategic priority.
•
Improving the perception of tourism as a key sector among opinion leaders. Advocating tourism among all opinion leaders as a strategic and sustainable industry and a main contributor to the GDP in Cyprus should be a sustained effort that will require appropriate funding.
•
Leveraging partnerships. Mutually-beneficial partnerships should be sought within the public sector at all levels –national and sub-national, inter and intra institutional.
•
Boosting human capital development. In order to achieve the Cyprus Tourism Strategy Vision and introduce the Premium Destination Strategy, Cyprus needs to continuously improve the quality of services in the tourism industry. This requires quality education and training, as well as motivated, knowledgeable, and well-trained staff. Furthermore, adapting development to globalisation and new market demands will require additional efforts to improve the professional knowledge and skills of the sectors’ employees. To achieve this, particular attention needs to be given to adapting new technologies and tools for developing human capital.
•
Managing knowledge and market intelligence. Make available to the public and private sector players reliable, timely, and accessible research and knowledge (such as trends, competitors, markets, and strategies) that will guide and facilitate the work to be done.
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872
Critical activities for the upcoming 24 months The Cyprus Tourism Strategy will be launched on a formal presentation to the Council of Ministers that should endorse it, together with the short-term action plan. The CTS and the action plan will also be presented to the relevant public and private stakeholders. Broadly publicising the strategy and plan will be essential to generate support from the stakeholders and the Cyprus population at large. As it has already been mentioned, an intense preparatory phase is foreseen until the end of 2018. The 10 critical activities included in the action plan that should be given priority in the short term are listed below: Regarding the institutional framework: a. Reach an agreement on the funding mechanism for the implementation of the Cyprus Tourism Strategy b. Launch the Office of the Strategy Manager (OSM) and the Project Management Unit (PMU) c. Set up the new organisation of the National Tourism Authority (NTA) d. Activate the Inter-Ministerial Committee for Tourism (IMCT) Priorities in outcomes/initiatives: e. Launch short-term Technical Assistance support f.
Conduct practical training programme for the NTA staff
g. Deploy the National Planning effort h. Launch the Cyprus Tourism Quality Label System Prioritised projects: i.
Launch the 1st Cyprus Top Experience (CTE)
j.
Start the implementation of 1st TZNI Master Plan
The figures below show the roadmap for the 10 critical activities followed by a brief summary of each of them:
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Figure 265. Roadmap for critical activities (2017)
Figure 266. Roadmap for critical actions (2018)
12.7.1 Activities to set up the institutional framework a.
Reach an agreement on the funding mechanism for the Cyprus Tourism Strategy To achieve the established key performance indicators and targets for each strategic objective, it is important to reach an agreement on the financial resources needed to ensure the viability of the implementation process. The budget and sources of funding presented in the investment plan have been assessed, and the financial resources needed for executing the Cyprus Tourism Strategy totals approximately 1.008 Million Euros over the first 4-year period. Updated version 23.03.2017
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Each part of the investment plan has been broken down into the estimated annual costs for the first 4 years, indicating public and private contributions. A list has been prepared including both Governmental and non-Governmental organisations that should be involved in the execution and funding of each task, for which a joint formal agreement is needed.
b.
Launch the Office of the Strategy Manager and the Project Management Unit The Office of the Strategy Manager (OSM), with the support of the Project Management Unit serving the NTA will oversee the development, alignment, implementation, and management of the CTS in order to fulfil the Vision. Both will report directly to the Highest Authorities.
c.
Set up the new organisations for the National Tourism Authority The new organisation of the National Tourism Authority should be gazetted and implemented. The NTA should be aligned operationally (the business’ ability to deliver its ‘mission’) and strategically (the management of the business to achieve its vision) with the realisation of Cyprus Tourism Strategy. This involves ensuring the core business processes and the organisational structure designed to manage it are appropriate and effective. It includes administrative systems that empower management, as well as the creation and monitoring of performance objectives (performance management). This new organisation will be much more effective and critical in creating a World Class Tourism Management System that supports the successful implantation of the Cyprus Tourism Strategy.
d.
Activate the Inter-Ministerial Committee for Tourism The creation of the new Inter-Ministerial Committee for Tourism should be gazetted, together with the other organisations forming the institutional framework for tourism management. The IMCT should be launched and start to be operational without delay. Participating Ministers should be formally appointed by the President of the Government, and they will be able to delegate functions to a Deputy Minister. Additionally, Ministers will appoint a SPOC for strategy implementation. The first meeting of the IMCT should be called by the OSM who, together with the Head of the NTA, will present the new Cyprus Tourism Strategy to the Ministers indicating the inputs and involvement required from each of their respective ministries.
12.7.2. Actions related to outcomes/initiatives e.
Launch short-term Technical Assistance support In order to successfully execute the plan, it will be necessary to introduce technical support in all areas of Cyprus, built around the OSM. This guarantees optimal support to the work teams spread around Cyprus and will help to deliver efficient communication and sound relationships between all agents and stakeholders involved.
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Technical assistance should provide the following services:
g.
•
Supporting the implementation of initiatives.
•
Delivering training programs.
•
Providing advisory services.
•
Preparing technical reports and recommendations.
Conduct a practical education programme for the NTA staff The National Tourism Authority, with the support of the MECIT, will launch a practical executive education programme (Master program) for its staff. The education programme will be focused on tourism topics directly related to the Cyprus Tourism Strategy. The educational sessions will cover various areas of the Cyprus Tourism Strategy, such as product development, experience design, MSMEs, human capital, investment attraction, marketing, and communications, etc., as well as other complementary areas such as strategic thinking, decision making, analytical skills, etc.
f.
Deploy the National Planning effort The National Tourism Planning effort aims at strengthening the National Tourism Authority Planning Department and foster alignment with the Cyprus Tourism Strategy in the preparation of master plans of the main tourism clusters. Officials working at the Department will benefit from high-level technical assistance and training in spatial planning. Furthermore, as part of the initiative, the Tourism Land Bank will be updated and modernised to support the effort of attracting investors for the development of the clusters. The initiative will also foster strong engagement and coordination with sub-national government organisations and other relevant stakeholders in the field of tourism planning.
g.
Launch the Cyprus Tourism Quality Label System The Cyprus Tourism Quality Label system will provide consumers with easily recognisable symbols/seals for trustworthy standards of quality in the tourism industry. The seals will be created by the National Tourism Authority, that should also define and manage the process for application and approval. As part of the approval process, tourism businesses will receive an initial on-site assessment that will be followed by annual random checks. The assessments will be conducted by trained assessors, and approved businesses will be able to display a certificate of quality on their premises and use the quality seal logo in their promotional and marketing materials.
12.7.3. Actions related to projects h.
Start the implementation of the 1st TZNI Master Plan Cyprus will introduce the first TZNI Master Plan. A Tourism Zone of National Interest (TZNI) is a geographic area with high potential for tourism development that will be converted into a tourist destination on the basis of an integrated Master Plan. The Master Plan will define target markets and destination concept, spatial zoning and building codes, access points and transport infrastructure needed, accommodation and services to be developed or enhanced, public and private attractions to be developed or enhanced, and investments in basic infrastructure, among other.
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876
Launch the first Cyprus Tourism Experience The first Cyprus Tourism Experience should be developed and launched in the short term. It will lay the foundation for the new approach to developing tourism products and building competitive edge. The Grand Tour of Cyprus could be a good choice to break the ground.
12.7.4. Investment Glossary and Assumptions a.
Glossary Table 445. Accommodation facilities concepts
Item Hotels & Serviced Units 3 stars 4 stars 5 stars 5 starsâ&#x20AC;&#x2122; luxury Inns
Concepts 3-star accommodation keys 4-star accommodation keys 5-star accommodation keys 5-star luxury accommodation keys Inns accommodation (2, 1 and no star category)
Average investment per unit (Euros) 150.000 200.000 250.000 350.000 75.000
Special Lodging All categories
Tourist villages, apartments, Mansions, Villas, motor homes, rural farms, etc.
200.000
Guest houses offer a dining service
50.000
Guest houses and B&B All categories
Campsites and Glamping Parcels
All categories Serviced Units (included in Real Estate) Villas (30% of Serviced Villas in resorts, cities, and rural areas Units) Apartments (70% of Apartments in resorts, cities, and rural Serviced Units) areas Real Estate Villas (30% of Real Estate) Villas in resorts, cities, and rural areas Apartments (70% of Real Apartments in resorts, cities, and rural Estate) areas
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7.500 400.000 150.000 300.000 100.000
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Table 446. Infrastructure, utilities and other supporting public services concepts and assumptions Item Clusters and TZNI
Concepts
Transportation infrastructure Utilities infrastructure Supporting public services
Transportation system (motorways, roads, etc.) infrastructure for visitors to be developed inside the clusters and TZNIs Utilities system infrastructure (energy, water, sewage, telco, etc.) to be developed inside the clusters and TZNIs Supporting public services (health, security, education, information, etc.) to be developed inside the clusters & TZNIs
Resorts infrastructure Transportation infrastructure (roads, pathways, etc.) Utility infrastructure and services (energy, water, sewage, telco, etc.)
b.
Transportation infrastructure (roads, pathways, etc.) to be developed inside the resorts Utilities infrastructure (energy, water. Sewage, telco…) and services to be developed inside the resorts
Assumptions based on THR’s experience and knowledge in previous projects and studies in similar conditions to ensure an acceptable profitability Table 447. Tourist accommodation distribution in resorts, urban areas, rural areas and multipliers for serviced units and real estate Item
Hotels, Hotel apartments
Ratios/assumptions used Distribution of hotels and serviced units are as follows: • 60% resorts, 30% in cities and 10% in rural areas. Serviced Units are calculated according to the following ratios: • 1 Serviced Unit per 1 hotel room in resort. • 0,5 Serviced Unit per 1 hotel room in cities. • 0,25 Serviced Unit per 1 hotel room in rural areas. Distribution of inns and serviced units are as follows: •
Inns
Guest houses, B&B
Campsites and Glamping
Special lodgings
10% resorts, 70% in cities and 20% in rural areas.
Serviced Units are calculated according to the following ratios: • 0,25 Serviced Unit per 1 inn key in resorts. • 0,12 Serviced Unit per 1 inn key in cities. Distribution of guest houses, B&B and serviced units are as follows: • 20% resorts, 70% in cities and 10% in rural areas. • Serviced Units are calculated according to the following ratios: • 0,25 Serviced Unit per 1 guest house key in resorts. Distribution of campsites, glamping’s and serviced units are as follows: • 40% resorts and 60% in rural areas. Serviced Units are calculated according to the following ratios: • 0,25 Serviced Unit per 1 parcel in resorts. Distribution of special lodgings and serviced units are as follows: • 30% resorts, 30% in cities and 40% in rural areas Serviced Units are calculated according to the following ratios: • 0,25 Serviced Unit per 1 special lodging key.
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Item
Real Estate
Soft Investment
Experience System
Clusters and TZNI infrastructure and utilities investment
878
Ratios/assumptions used Real estate keys are calculated using the following assumptions: • 2 secondary home per 1 hotel room in resort. • 1 secondary home per 1 hotel room in cities. • 0,5 secondary home per 1 hotel room in rural areas. • 0,5 secondary home per 1 inn key in resorts. • 0,25 secondary home per 1 inn key in cities. • 0,5 secondary home per 1 guest house key in resorts. • 0,5 secondary home per 1 parcel in resorts. • 0,5 secondary home per 1 special lodging key in resorts. New development: • Soft investment is estimated to be between 2 and 4% of the total new development investment. Improvement of current situation: • Soft investment is estimated to be between 2 and 4% of the total improvement investment. New development: • Experience system is estimated taking into account the initiatives outlined, the number of units to develop and an estimated cost based on THR experience. Improvement of current tourism product offer: • Experience system is estimated taking into account the initiatives outlined, the number of units to develop and an estimated cost based on THR experience. New development: • New infrastructures and utilities, accounts for 35 to 40% of the total investment for new development. • New infrastructure and utilities for clusters and TZNI requires an investment equivalent to 45% of the budget for developing new infrastructure. Improvement of current infrastructure: • Improvement of the infrastructure and utilities requires an investment equivalent to 40-45% of the budget. • Improvement of the infrastructure and utilities in clusters and TZNI requires an investment equivalent to 55% of the budget for improving the infrastructure. New development: New infrastructures and utilities, accounts for 35 to 40% of the total investment for new development. • New infrastructures and utilities for resorts, accounts for 20 to 25% of the total investment for new development. Improvement of current infrastructure: •
Resorts infrastructure
• •
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Improvement of the infrastructure and utilities requires an investment equivalent to 40-45% of the budget Improvement of the infrastructure and utilities in resorts requires an investment equivalent to 55% of the investment required to improve the infrastructure.
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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.
Brand Adoption Process
Five-stage mental process all prospective customers go through from learning of a new product, to becoming loyal customers or rejecting it.
Business Model Canvas
A strategic management and entrepreneurial tool developed by Alexander Osterwalder that allows one to describe, design, challenge, invent, and pilot a business model.
Cluster
This British term is used regularly to group together businesses & organisations in the same territory, which specialise in an activity, product, or service.
Core Strategy
A set of proposals that determine the overall ambitions and priorities of a strategy, the key drivers of change. It consists of three main components: the goal system, the competitive advantage, and the business scope.
Customer Journey
The customer journey contains a number of key elements, where the customer shifts from awareness to engagement, and then to purchase.
Competitiveness Diamond Model
According to Michael Porter the competitiveness is the result of the engagement and interaction of four main factors: Factor conditions; Demand conditions; Related and supporting industries; Firm strategy, structure, and rivalry.
Double Occupancy Rate (DOR)
A type of travel accommodation for two persons sharing the same room, e.g. hotels.
Guiding Principles
A set of norms, rules, or ethics that represent what is desirable and conducive to a successful strategy. It determines the legitimacy of an action.
Initiatives
Actions or groups of actions/programs that establish what will be done to achieve the objective.
Key Issues
The most important factors that determine whether or not a destination can achieve its 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.
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880
(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 â&#x20AC;&#x153;why do we exist?â&#x20AC;?
Resort / MixedUse Resort
A mixed-use resort is a large planned space with a vast land area composed of: hotels, residences (1st and 2nd), retail, restaurants, entertainment and experiences, public services, and diverse amenities.
Road map
The schedule for all the initiatives defined in the plan. The final aim is to provide a well-defined and practical scheme for future activities and tasks.
Serviced Units
Real estate units that, after being sold, are given by the owner to the hotel to be rented as standard hotel keys, thereby benefitting from the hotelâ&#x20AC;&#x2122;s services. Part of the income generated by these units goes to the hotel, improving the return on investment.
Special Lodging
Type of accommodation that does have a recognised personality in the industry; mansions, villas, mobile homes, rural farms, to name a few.
Strategic Analysis
The strategic analysis consists of internal and external analysis. Once the internal and external analysis has been performed, the SWOT analysis highlights the destination's existing strengths and weaknesses, its emerging opportunities, and the threats it faces.
Strategic Objectives
A short statement outlining the specifics that a destination has to carry out in order to execute its strategy. Objectives will often be actions, such as; increase, reduce, improve, achieve, etc.
Strategic Outcomes
The different areas of a strategy that group together the related objectives, usually into between four and 6 groups. These represent the key areas of the strategy.
Strategy Direction Statements
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 is the framework of a full view of a strategy as a whole. It shows the depth of an integrated strategy. The strategy map allows organisations to describe the connections between intangible assets and value creation with clarity and precision, and to co-ordinate processes, people, and IT services for superior performance.
SWOT Analysis
Representing the Strengths, Weaknesses, Opportunities and Threats of a destination, the SWOT framework is used to identify and assess certain issues within and outside of the destination that can affect the ease of successfully reaching its goals. It is used to provide an outline for strategic decision making.
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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 it 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.
Work Stream
The progressive completion of tasks executed by different groups within an organisation that are required to finish a project or initiative.
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List of Acronyms AI
Available Income
ATD
Air Traffic Development
APAC-ME
Asia, Pacific and Middle East
B2B
Business to Business
B2C
Business to Consumer
BAP
Brand Adoption Process
BE
Branding Effect
BEs
Brand Experiences
BIS
Business Intelligence System
BSC
Balance Scorecard
BSI
British Standards Institution
BUA
Built up area
CAGR
Compound Annual Growth Rate
CEA
Cyprus Experience Agency
CEO
Chief Executive office
CFFC
Carbon Footprint Friendly Company
CIA
Central Intelligence Agency
CIPA
Cyprus Investment Promotion Agency
CIS
Commonwealth of Independent States
CNP
Customer Net Promotion
CP
Cyprus Promotion
CQL
Cyprus Quality Labels
CRM
Customer Relationship Management
CS
Competitive Set
CTE
Cyprus Tourism Experience
CTF
Cyprus Tourism Fund
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
DIT
Development Intelligence Team
DMC
Destination Management Company
DMO
Destination Management Organisations
DPCE
Daily Per Capita Expenditure
EAC
Electricity Authority of Cyprus
EDGAR
Emissions Database for Global Atmospheric Research
EU
European Union
EUR
Euro
FAR
Floor area ratio
FIT
Free Independent Travel
FRONTUR
Touristic Studies Institute (Tourspain)
F&B
Food & Beverage
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GAV
Gross Added Value
GDP
Gross Domestic Product
GHG
Greenhouse Gas
GR
Grande randonĂŠe (long distance footpath)
GSTC
Global Sustainable Tourism Council
GSV
Green Sun Vacations
HCD
Human Capital Development
IAGTO
International Association of Golf Tour Operators
IBESTAT
Balearic Island Statistics Institute
ICCA
International Congress and Convention Association
ICOLD
International Committee on Large Dams
ICR
Integrated Casino Resort
ICT
Information and Communication Technology
IFTM
International French Travel Market
ILTM
International Luxury Travel Market
IMCT
Inter-Ministerial Committee for Tourism
IPK
IPK International Tourism Consulting Group
ISO
International Organisation for Standardisation
ISQUA
International Society for Quality in Healthcare
ITB
ITB Berlin Convention
ITDPMTA
Integrated Tourism Development Plan for Major Tourism Areas
IWS
Internet World Stats
JV
Joint Venture
KPI
Key Performance Indicator
KSF
Knowledge and Skills Framework
LGTB
Lesbian, Gay, Bisexual, and Transgender
LRF
Legal and regulatory framework
MARDE
Ministry of Agriculture, Rural Development and Environment
MECIT
Ministry of Environment, Commerce, Industry and Tourism
MICE
Meetings, Incentives, Conferences, and Exhibitions
MiC
Made in Cyprus
MIS
Management Information System
MS
Markets Stability
MSMEs
Micro, Small and Medium Enterprises
MW
Megawatt
NAT
National Alliance for Tourism
NGO
Non-Government Organisation
NOAA
National Oceanic and Atmospheric Administration
NPS
Net Promoter Score
NTA
National Tourism Authority
NTO
OECD
National Tourism Organisation Overall action Plan for the Implementation of the Tourism Strategy Organisation for Economic Co-operation and Development
OSM
Office of Strategy Manager
OTA
Online Travel Agency
OAPI
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PMU
Political, Economic, Social, Technological, Legal, and Environmental Project Management Unit
PPP
Public private partnerships
PPS
Pre-post season
PR
Public Relations
RAF
Royal Air Force
RES
Renewal energy sources
RFP
Request for Proposal
RICS
Royal Institute of Chartered Surveyors in Cyprus
ROI
Return over investment
SBA
Sovereign Base Areas
SCI
Sites of Community Interest
SE
Signature Experiences
SEM
Search Engine Marketing
SEO
Search Engine Optimisation
SITES
Strategy and Special Projects Technical Support
SITV
Salon International du Tourisme et des Voyages
SoC
Soul of Cyprus
SPA
Special Protected Areas
SPOC
Single Point of Contact
SR
Social Responsibility
SWOT
Strengths, weaknesses, opportunities, and threats
TCC
Tourism Connectivity Committee
TDMP
Tourism Development Master Plan
TI
Tourism Investment
TIES
The International Ecotourism Society
TMIS
Tourism Management Information System
TO
Tour Operator
ToR
Terms of Reference
TSM
Tourism System Management
TTCI
Tourism & Travel Competitiveness Index
TTJ
Total Tourism Employment (Jobs)
TWG
Technical Working Group
TZNI
Tourism zones of national interest
UAE
United Arab Emirates
UK
United Kingdom
ULI
UNWTO
Urban Land Institute United Nations Educational, Scientific and Cultural Organisation United Nations World Trade Organisation
US/USA
United States of America
USD
United States Dollars
VAT
Value added taxes
VIP
Very Important People
VFR
Visit friends and relatives
PESTLE
UNESCO
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WEF
World Economic Forum
WTI
Wise Tourism Index
WTO
World Trade Organization
WTTC
World Travel and Tourism Council
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Kapferer, J-N. (2012). The New Strategic Brand Management. London: Kogan Page. Kaplan, R.S., Norton, D.P. (2008). The Execution Premium: Linking Strategy to Operations for Competitive Advantage. Boston: Harvard Business School Press. Le label de la restauration de qualite. Retrieved from Restaurateurs de France site: http://www.restaurateursdefrance.com/ Locum Consulting. Developing successful resorts. [PDF format]. Ministry of Interior. Government of Cyprus. Dept. of Lands & Surveys. Geographic data. My Switzerland. Grand Tour http://grandtour.myswitzerland.com/en/
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Skift Magazine. (2015). The megatrends defining travel in 2015. Retrieved from: http://skift.com/2015/01/13/new-skift-magazine-megatrends-defining-travel-in-2015/ The 20 best Mediterranean islands. (2016, June 18). Retrieved from The Telegraph site: http://www.telegraph.co.uk/travel/destinations/europe/articles/the-20-bestmediterranean-islands/ THR. (2016). Brand adoption survey for Cyprus. [PDF format]. THR. (2008). Playa de Palma Report: Business Model Destination. [PDF format]. Tourism Australia, Australia Government. (2012). Australia’s National Landscapes Program: Experiences Development strategies: Guidelines for Australia’s National Landscape Steering Committees. Sidney, Canberra: Parks Australia, Tourism Australia. [PDF format]. TravelSat. Competitive Index of Cyprus. TripAdvisor. (2016). TripBarometer: Travel Trends 2016. [PDF format]. USAID. (2006). Operations manual for a model centre of excellence. [PDF format]. Western Australia. The Experience Extraordinary Brand Handbook. Retrieved from: https://www.yumpu.com/en/document/view/27124253/the-experience-extraordinarybrand-handbook-tourism-westernWorld Economic Forum. (2015). The Travel & Tourism Competitiveness Report 2015. Geneva: World Economic Forum. [PDF Format]. World Tourism Organization. (2015). Compendium of Tourism Statistics: Data 2009 – 2013. Madrid: World Tourism Organization. [PDF Format].
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World Tourism Organization. (2016). Compendium of Tourism Statistics: Data 2010 – 2014. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (2004). Indicators of Sustainable Development for Tourism Destinations: A Guidebook. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (2015). Tourism Highlights 2015. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (2011). Tourism towards 2030. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (s.f.) World Tourism Barometer and Statistical Annex. . Retrieved UNWTO from site: http://mkt.unwto.org/es/barometer World Tourism Organization. (2015). Yearbook of Tourism Statistics: Data 2009 – 2013. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (2016). Yearbook of Tourism Statistics: Data 2010 – 2014. Madrid: World Tourism Organization. [PDF Format]. World Travel & Tourism Council. (2015). Economic Impact 2015: Cyprus. [PDF Format]. World Travel & Tourism Council. (2016). Economic Impact 2016: Cyprus. [PDF Format]. World Travel & Tourism Council. (2015). Date gateway. Retrieved from World Travel & Tourism Council site: http://www.wttc.org/datagateway/ Yachtbooker.com. (2013). What is good to know about bareboat yacht charters. [PDF Format].
Various internet websites were consulted Basque Culinary Center. http://www.bculinary.com/ California Energy Commission. http://www.consumerenergycenter.org/ Country by country. http://www.countrybycountry.com/blog Destination Canada. https://www.canada.travel/ eMarketer. https://www.emarketer.com/ Emirates. http://www.emirates.com/ Essential Journeys. http://www.essentialjourneys.co.uk Euskadi Tourism. http://turismo.euskadi.eus/es/ Family affairs and other matters. http://www.familyaffairsandothermatters.com/ Flora the Explorer. http://floratheexplorer.com/ Google Trends. https://www.google.es/trends/ Hot & Chilli – food and travel. http://www.hotandchilli.com/ Ireland tourism website. http://www.ireland.com/ Jo Igele. http://www.jo-igele.de/ Just Travelous. http://www.justtravelous.com/ Updated version 23.03.2017
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Larnaca Tourism Board. https://nso.gov.mt/en/Pages/NSO-Home.aspx Le Plus Beaux Villages de France. http://www.france-beautiful-villages.org/en My Switzerland. http://www.myswitzerland.com/ My tour du globe. http://mytourduglobe.com/ New Zealand Travel website: http://www.newzealand.com/ Petites Bulles d’Ailleurs. http://petitesbullesdailleurs.fr/ Qualmark – New Zealand tourism’s official mark of quality. http://www.qualmark.co.nz/ Reisedepeschen. http://www.reisedepeschen.de/ SimilarWeb. https://www.similarweb.com/ Tourism Australia. http://www.tourism.australia.com/ Visit Portugal. https://www.visitportugal.com/ Visit the USA. http://www.visittheusa.com/ Vueling. http://www.vueling.com/ Weltenbummlermag. http://www.weltenbummlermag.de World of Wanderlust. http://www.worldofwanderlust.com
Other documents consulted: Cabañero-Verzosa, C., Garcia, H.R. (2011). People, Politics and Change: Building Communication Capacity for Governance Reform. Washington: World Bank. Retrieved from World Bank site: http://goo.gl/28lB1T Canada Tourism Commission. (2011). Experiences: A toolkit for partners of the CTC. [PDF format]. Cipolletti, S. (2014). Tourism Spaces: The New Experience Design. AlmaTourism: Journal of Tourism, Culture and Territorial Development, 1, 92-105. Country Profiler. (2016). Cyprus Country Report. [PDF format]. Court, D.; Elzinga, D.; Mulder, S., (2009). The consumer decision journey. The McKinsey Quaterly, 3, 1-11. Cox, C., Wray, M. (2011). Best Practice Marketing for Regional Tourism Destinations. Journal of Travel & Tourism Marketing, 28(5), 524-540. Cyprus Economic Policy Review. (2007). Tourism in Cyprus: Recent Trends and Lessons from the Tourist Satisfaction Survey. [PDF format]. Cyprus Tourism Organisation. (2005). A framework for a strategic action plan for the implementation of e-marketing in Cyprus Tourism Organisation. [PDF format]. Cyprus Tourism Organisation. Product development, Diversification, and Innovation: A Strategic Approach for Developing Sustainable, Quality and Innovative Tourism Products. [PDF format].
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Cyprus Tourism Organisation. Study for the development of special products of «wellbeing και pampering» implementation of the strategic plan for tourism 2003-2010. [PDF format]. Deloitte. (2015). Travel consumer 2015. [PDF format]. Retrieved from Deloitte site: https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/consumerbusiness/deloitte-uk-travel-consumer-2015.pdf Destination Marketing Association International. (2014). Destination Next: A strategic road map for the next generation of global destination marketing. [PDF format]. Retrieved from DMAI site: http://goo.gl/PcqyZl Destination Marketing Association International. (2013). Digital & Mobile Marketing Toolkit. [PDF format]. Divol, R.; Edelman, D.; Sarrazin, H. (2012). Demystifying social media. The McKinsey Quarterly, 4, 1-11. Dupeyras, A., MacCallum, N. (2013). Indicators for Measuring Competitiveness in Tourism: A Guidance Document. OECD Tourism Papers. [PDF format]. Retrieved from OECD site: http://www.oecd.org/cfe/tourism/Indicators%20for%20Measuring%20Competitiveness%2 0in%20Tourism.pdf Duran, C. (2013). Governance for the Tourism Sector and its Measurement. Madrid: World Tourism Organisation. [PDF format]. Retrieved from UNWTO site: http://statistics.unwto.org/en/content/papers Dwyer, et al. (2006). Concepts of tourism yield and their measurement. Australia: CRC for Sustainable Tourism. [PDF format]. Retrieved from CRC site: http://www.crctourism.com.au/wms/upload/resources/Dwyer_Tourism%20Yield.pdf Dwyer, L; Knezevic Cvelbar, L.; Edwards, D. (2012). Fashioning a destination tourism future: The case of Slovenia. Tourism Management, 33, 305-316. Earth Rhythms. (2010). Experiential Tourism and the Cyprus Hotel Experience: A Canadian Perspective, with Suggestions, Ideas, and Opportunities. [PDF format]. Ecorys. (2006). Study on Strategic Evaluation on Transport Investment Priorities under Structural and Cohesion funds for the Programming Period 2007-2013: Country Report Cyprus. [PDF format]. European Commission. (2012). Annual Tourism Report 2012: Republic of Cyprus. [PDF format]. European Commission. (2013). Annual Tourism Report 2013: Republic of Cyprus. [PDF format]. European Commission. (2014). Tourism industry sub-sectors: Country Report Cyprus. [PDF format]. European Commission. (2014). Tourism in Cyprus: The way forward. [PDF format]. European Commission. (2016). Mapping and performance check of the supply side of tourism education and training: Country profile for Cyprus. [PDF format]. Gretzel, U.; Fesenmaier, D.R.; Formica, S. (2006). Searching for the Future: Challenges Faced by Destination Marketing Organisations. Journal of Travel Research, 45, 116-126. Gutierrez, E. et al. (2005). Linking Communities, Tourism & Conservation: A Tourism Assessment Process. Washington: Conservation International and The George Washington University. [PDF format]. Retrieved from The George Washington University site: http://goo.gl/ANcnqr Hawkins, D.E., Burke, J.F. (2015). Tourism Assessment and Project Development. Research paper. Washington: The George Washington University.
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JBR Hellas, et al. (2005). Theme Park Development in Cyprus: Executive Summary. [PDF format]. Klimek, K. (2013). Destination Management Organisations and their shift to sustainable tourism development. European Journal of Tourism, Hospitality, and Recreation, 4 (2), 27-47. Kouroupi, M. (2014). Positioning for Growth. [PDF format]. Koutolas, D. (2015). Hotel distribution and the hospitality sector of Cyprus: Challenges and strategies. KPMG. (2015). Restructuring of the Cyprus Tourism Organisation. [PDF format]. Laimer, Peter. (2008). A Tourism Satellite Account for Cyprus: State of the art, further work, and preliminary results. [PDF format]. Mazanec, J.A., Wöber, K, Zins, A.H. (2007). Tourism Destination Competitiveness: From Definition to Explanation? Journal of Travel Research, 46, 86-95. McCormac, M. (2011). Growing Tourism in Cyprus. [PDF format]. Ministry of Agriculture, Rural Development, and Environment. (2016). Development of Troodos Wider Area. [PPT format]. Ministry of Communications and Works, Department of Civil Aviation. Analysis and assessment of concrete needs based on the existing and future air services agreements to ensure Cyprus’s sufficient air connectivity. [PDF format]. Ministry of Tourism of New Zealand, Local Government New Zealand and Lincoln University. (2006). Tourism Planning Toolkit for Local Government. [PDF format]. Müller, H. (2004). Staging offers in tourism destinations. Research paper. TRC. [PDF format]. THR. (2015). Signature Experiences Collection. [PDF format]. OECD. (2012). Tourism Governance in OECD Countries. In: OECD Tourism Trends and Policies 2012. OECD Publishing. Retrieved from OECD site: http://dx.doi.org/10.1787/tour-2012-3-en OECD. (2004). OECD Principles of Corporate Governance. OECD Publishing. [PDF format]. Retrieved from OECD site: http://www.oecd.org/corporate/ca/corporategovernanceprinciples/31557724.pdf PhocusWright. (2015). Distribution Evolution: How Travelers Search, Shop, Buy and Share. PhocusWright, Amadeus. (2012). The future of travel search. Plog, S.C. (2001). Why Destination Areas Rise and Fall in Popularity. Cornell Hotel and Restaurant Administration Quarterly, 42(3), 13-24. Porter, W. (2015). Air Connectivity prospects to & from Cyprus. [PDF format]. Presidency. Unit for Administrative reform. (2015). Cyprus National Reform Programme 2015. Europe 2020 Strategy for: Smart, Sustainable and Inclusive Growth. [PDF format]. Qu, H.; Hyunjung Kim, l.; Hyunjung, H. (2011). A model of destination branding: Integrating the concepts of the branding and destination image. Tourism Management, 32, 465-476. Resolute Asset Management. (2015). Cyprus Economy & Real Estate Market: Prospects and Expectations for 2016. [PDF format]. Richards, G., Wildon, J. (2006). Developing creativity in tourist experiences: A solution to the serial reproduction of culture?. Tourism Management, 27, 1209-1223.
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Risteski, M.; Kocevskia, J., Arnaudov, K. Spatial planning and sustainable tourism as basis for developing competitive tourist destinations. Procedia - Social and Behavioral Sciences, 44, 375-386. Sofield, S. (2011). Tourism value chain analysis. Symposium for Developing the Southern Economic Corridor Phnom Penh, Cambodia. [PDF format]. Tourism & Transport Consult International. (2006). Famagusta Regional Tourism Strategy. [PDF format]. Travel Foundation. (2013). Optimising tourist spend in the local economy: research findings and recommendations from Cyprus and Tenerife. [PDF format]. Travel Foundation, The, Cyprus Tourism Organisation, CSTI. Optimising All Inclusive Expenditure in Paphos: recommendations for the pilot stage of potential solutions. [PDF format]. Travel Foundation, The, Cyprus Tourism Organisation, CSTI. Guidelines for meeting the Cyprus Tourism Organisation minimum standards for sustainability in hotel establishments [PDF format]. University of Cyprus. (2015). Comparisons of Productivity among European Sectors and Cyprus: The Case of Tourism Sector. [PDF format]. University of Cyprus. (2009). Visitor satisfaction with the Cypriot tourist product. [PDF format]. Van Hoven, B. (2012). Multi-sensory tourism in the Great Bear Rainforest. Landabrefid, 19(1), 31-49. Volgger, M.; Pechlaner, H. (2014). Requirements for destination management organisations in destination governance: Understanding DMO success. Tourism Management, 41, 64-75. Weiermair, K. (2006). Product improvement or innovation: what is the key to success in tourism?. In: OECD, Innovation, and growth in tourism (pp. 53-69). Paris: OECD. World Tourism Organization. (2007). A Practical Guide to Tourism Destination Management. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (1998). Guide for local authorities on developing sustainable tourism. Madrid: World Tourism Organization. [PDF format]. World Tourism Organization. (2004). Indicators of Sustainable Development for Tourism Destinations: A Guidebook. Madrid: World Tourism Organization. [PDF format]. World Tourism Organization. (1994). National and Regional Tourism Planning: Methodologies and Case Studies. Madrid: World Tourism Organization. [PDF format]. World Tourism Organization. (2011). Policy and Practice for Global Tourism. Madrid: World Tourism Organization. [PDF format]. World Tourism Organization (2000). Public-Private Sector Cooperation: Enhancing Tourism Competitiveness. Madrid: World Tourism Organization. [PDF Format]. World Tourism Organization. (2006). Structures and budgets of national tourism organizations 2004 - 2005. Madrid: World Tourism Organization. [PDF format]. World Tourism Organization. (s.f.). TedQual Certification System. Retrieved from UNWTO site: http://themis.unwto.org/content/unwtotedqual-certification-system World Tourism Organization, European Commission. (2013). Sustainable Tourism for Development Guidebook: Enhancing capacities for Sustainable Tourism for development in developing countries. Madrid: World Tourism Organization. [PDF Format].
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List of Figures Figure 1. The four phases of the project .....................................................................................................9 Figure 2. International tourist arrivals in Cyprus 2000-2015 and 2016 projection ..............................15 Figure 3. International tourism revenue, 2010-15 ....................................................................................15 Figure 4. Average expenditure per person/trip (Euro) ..........................................................................16 Figure 5. Vicious cycle of competitiveness of a tourism destination ..................................................17 Figure 6. Main source markets for Mediterranean destination by 2025 (millions) ............................18 Figure 7. Arrivals to Mediterranean by destinations in 2025 (millions) ................................................18 Figure 8. Cyprus’ strategic change agenda...........................................................................................24 Figure 9. Cyprus main tourist areas ...........................................................................................................26 Figure 10. Cyprus’ attractions and resources ..........................................................................................29 Figure 11. Cyprus’ tourism infrastructure ..................................................................................................29 Figure 12. Cyprus’ tourism services ............................................................................................................29 Figure 13. Accommodation establishments and number of beds, 2000–2015 ................................31 Figure 14. Accommodation capacity (2015) .........................................................................................32 Figure 15. Share of accommodation types per nº of beds ..................................................................32 Figure 16. Hotel beds distribution by category (2015) ...........................................................................32 Figure 17. Yearly net bed occupancy rate 2000-2014 (%) ...................................................................33 Figure 18. Main purpose of visit to Cyprus ...............................................................................................35 Figure 19. Main activities done during the trip (multiple choice question) .......................................35 Figure 20. First-time vs repeating visitors. Evolution 2005 – 2015 ...........................................................36 Figure 21. Evolution of international tourist arrivals by age of visitors, 2005-2015 .............................36 Figure 22. Evolution of the type of trip 2005-2015 ...................................................................................37 Figure 23. Evolution of main source markets 2005 – 2015 (as % of total arrivals) .............................37 Figure 24. Top 5 source markets across the competitive set ...............................................................38 Figure 25. Stay/overnights per destination (2014) ..................................................................................38 Figure 26. Evolution of type of accommodation used, 2005-2015 .....................................................38 Figure 27. Cyprus brand adoption process (No past visit to Cyprus) .................................................40 Figure 28. Brand adoption process (Past visit to Cyprus) .....................................................................40 Figure 29. Acquisition ratios by source markets ......................................................................................41 Figure 30. “To what extent do the following statements apply to Cyprus?” ....................................42 Figure 31. “What other aspects can you mention about Cyprus?” (open question) .....................43 Figure 32. What Cyprus destination do you have in mind?”................................................................44 Figure 33. “Is Cyprus a member of the EU?”............................................................................................44 Figure 34. “What is, according to you, a suitable trip to Cyprus?” .....................................................44 Figure 35. Booking the trip ...........................................................................................................................49 Figure 36. Transportation to the destination ............................................................................................49 Figure 37. Transport in the destination ......................................................................................................50 Figure 38. Feelings affecting the overall experience ............................................................................50 Figure 39. Accommodation experience..................................................................................................51 Figure 40. Food experience ........................................................................................................................51 Figure 41. Shopping experience ................................................................................................................52 Figure 42. Experiences and activities ........................................................................................................52 Figure 43. Getting back home ...................................................................................................................53 Figure 44. Cyprus customer experience journey ....................................................................................53 Figure 45. Cyprus TravelSat Index range ..................................................................................................54 Figure 46. Destination value chain TravelSat Index ...............................................................................54 Figure 47. Competitive management matrix of Cyprus .......................................................................58 Figure 48. International tourist arrivals 1990-2015 (million) ....................................................................59 Figure 49. Index of tourist arrivals, 2000-2015 ...........................................................................................59 Figure 50. Index of tourist arrivals, 2015-2025 ...........................................................................................60
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Figure 51. Direct contribution of tourism to the GDP (%) ......................................................................60 Figure 52. Direct contribution of tourism to employment .....................................................................60 Figure 53. Evolution of average expenditure per person/trip 2005-2015 (Euro) ...............................61 Figure 54. Tourism revenue (2010-2015) ....................................................................................................61 Figure 55. Expenditure per inbound arrival, 2000-2015 ..........................................................................61 Figure 56. Expenditure per night, 2000-2015 ............................................................................................62 Figure 57. Inbound travel spending index, 2000-2015 ...........................................................................62 Figure 58. Travel & Tourism competitiveness indicators.........................................................................65 Figure 59. Cyprus arrivals (1970-2015) .......................................................................................................77 Figure 60. Arrivals growth in the period 1970-2015 .................................................................................77 Figure 61. Total growth and cumulative arrivals per decade (1970 – 2015) .....................................78 Figure 62. Forecast of outbound world tourists by 2025, in millions .....................................................93 Figure 63. Departures in 2025 by source market ....................................................................................94 Figure 64. Forecast of inbound world tourist arrivals by 2025 per region, in millions ........................95 Figure 65. Forecasted arrivals by 2025 in each destination .................................................................95 Figure 66. Outbound tourism trips to Europe in 2025 by source markets ...........................................96 Figure 67.Top European destinations by number of arrivals in 2025 ...................................................96 Figure 68. Outbound tourism trips to the Mediterranean in 2025 by source markets .....................97 Figure 69. Top Mediterranean destination by number of arrivals in 2025 ..........................................97 Figure 70. International tourists arrivals to Cyprus and source markets’ share by 2025 ..................98 Figure 71. Evolution of Cyprus’ share in the arrivals to the Mediterranean .......................................98 Figure 72. Most attractive destinations for Sun & Sea trips ................................................................ 106 Figure 73. Most attractive destinations for Touring trips ..................................................................... 106 Figure 74. Most attractive destinations for Culture trips ..................................................................... 106 Figure 75. Most attractive destinations for Nature trips ...................................................................... 106 Figure 76. Most attractive destinations for Adventure trips ............................................................... 106 Figure 77. Most attractive destinations for Wellness trips ................................................................... 107 Figure 78. Most attractive destinations for City Break trips ................................................................ 107 Figure 79. Stagnation of international arrivals to Cyprus in the last 15 years ................................. 109 Figure 80. Tourism Economics' demand forecast model for 2030 .................................................... 109 Figure 81. Formula to calculate the total international arrivals growth potential ........................ 118 Figure 82. THR approach in estimating Cyprus market/product growth potential ...................... 120 Figure 83. Formula to estimate the total number of outbound leisure travel trips from EU countries ....................................................................................................................................................................... 121 Figure 84. THR approach to estimate the potential of market segments ...................................... 122 Figure 85. Results of the brand adoption process analysis (total sample) ..................................... 123 Figure 86. THR approach to estimation of market segments potential for Cyprus ....................... 124 Figure 87. Potential for Cyprus in European outbound travel per market segments (mill. trips) 124 Figure 88. Evolution international tourist arrivals per months in Cyprus (2005 – 2015) .................. 126 Figure 89. Percentage of holiday arrivals in Cyprus (May-October) from 2005 to 2015 .............. 126 Figure 90. Share of inbound arrivals per month to Europe, Spain, and Cyprus in 2015 ............... 127 Figure 91. International tourist arrivals by month in 2015 in four selected destinations................ 128 Figure 92. Shares of arrivals per month in Malta in 2015 compared to 2005 ................................. 129 Figure 93. Share of annual arrivals in November – April (2015) ......................................................... 130 Figure 94. Low season arrivals in Malta and Cyprus in top European source markets in 2015 ... 130 Figure 95. Cyprus’ seasonality curve compared with the Canary Islands’ in 2015 ...................... 131 Figure 96. Average max. temp. by country ......................................................................................... 132 Figure 97. Average sea temp. by country ............................................................................................ 132 Figure 98. Main attractions of Cyprus .................................................................................................... 132 Figure 99. Process to estimate the size of the European outbound travel market ....................... 135 Figure 100. Cyprus’ potential seasonality curve emulating Malta’s performance in low season ....................................................................................................................................................................... 140 Updated version 23.03.2017
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Figure 101. Process used to identify SWOT elements .......................................................................... 146 Figure 102. SWOT according to the BSC ............................................................................................... 148 Figure 103. Main goal: to deliver value to stakeholders .................................................................... 159 Figure 104. The four elements of the competitive advantage of Cyprus ...................................... 162 Figure 105. Cyprus’ Experiences System ............................................................................................... 164 Figure 106. Cyprus’ Signature Experience Process .............................................................................. 172 Figure 107. Product / segment prioritisation matrix ............................................................................. 179 Figure 108. Geo-markets prioritisation matrix ....................................................................................... 181 Figure 109. Evolution of the Positioning Strategy ................................................................................. 188 Figure 110. Source market Outline of the Strategy Direction groups by outcome ...................... 191 Figure 111. Sequence used to develop the Strategy Directions ...................................................... 191 Figure 112. Cyprus’ Brand Identity Prism................................................................................................ 228 Figure 113. Cyprus’ development areas and clusters ........................................................................ 234 Figure 114. Proposed organisational chart for the Cyprus Experience Agency ........................... 238 Figure 115. Proposed organisational structure of the CQL Management Unit ............................. 246 Figure 116. Processes within the CQL system ....................................................................................... 247 Figure 117. Digital marketing tactics per goal ..................................................................................... 310 Figure 118. Emirates “Inspire me” web page ....................................................................................... 316 Figure 119. Visit the USA – “Tune your USA trip” web page ............................................................... 317 Figure 120. Australia’s YouTube channel .............................................................................................. 318 Figure 121. Euskadi’s experiences booking platform .......................................................................... 321 Figure 122. Visit Portugal live chat .......................................................................................................... 322 Figure 123. Examples of Video uploading - Switzerland and Canada ........................................... 323 Figure 124. User generated content of New Zealand ........................................................................ 324 Figure 125. Online reputation management tools examples ........................................................... 324 Figure 126. Product prioritization matrix ................................................................................................ 414 Figure 127. Example of action plan implementation table............................................................... 419 Figure 128. Sun & Sea destinations according to their popularity ................................................... 421 Figure 129. Top 5 European source markets for Sun & Sea outbound demand ........................... 422 Figure 130. Cyprus short/mid-term potential in the European outbound Sun & Sea market ..... 423 Figure 131. Sun & Sea product business model ................................................................................... 424 Figure 132. Overview of Sun & Sea product development actions ................................................ 425 Figure 133. Target segments proposal for Sun & Sea product .......................................................... 426 Figure 134. Preliminary source markets prioritization for Sun & Sea tourism in Cyprus .................. 427 Figure 135. Current Sun & Sea offering of Cyprus does not communicate experience ............. 428 Figure 136. Illustrative example of digital customer satisfaction survey in hotels .......................... 430 Figure 137. Property operating models ................................................................................................. 431 Figure 138. Outdoor pool in San Alfonso del Mar Resort in Chile ..................................................... 435 Figure 139. Most popular Itineraries & Culture destinations ............................................................... 439 Figure 140. Itineraries & Culture outbound trips from Europe by source markets ......................... 439 Figure 141. Cyprus short/mid-term potential in European outbound Itineraries & Culture trips . 440 Figure 142. Itineraries & Culture product business model .................................................................. 442 Figure 143. Overview of Itineraries & Culture product development actions ............................... 443 Figure 144. Target segments for Itineraries & Culture ......................................................................... 444 Figure 145. Preliminary source market prioritization for Itineraries & Culture trips to Cyprus ....... 445 Figure 146. Illustrative example of routes in Cyprus ............................................................................ 445 Figure 147. Current religious routes of Cyprus do not communicate experience ........................ 446 Figure 148. Grand Tour of Switzerland platform ................................................................................... 447 Figure 149. Hotels partners for Grand Tour of Switzerland (selection) ............................................. 448 Figure 150. Property operating models ................................................................................................. 449 Figure 151. Branding visuals for different cultural itineraries & routes .............................................. 450
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Figure 152. Top 10 EU countries by relative use of bicycle as most used mode of transport, in 2014, % of the total population ............................................................................................................... 455 Figure 153. Top 10 EU countries by absolute use of bicycle as most used mode of transport, in 2014, in millions ........................................................................................................................................... 456 Figure 154. Location of offered cycling tourism itineraries by continent in 2014 .......................... 456 Figure 155. Cycling Tourism product business model ......................................................................... 458 Figure 156. Overview of Cycling Tourism product development actions ...................................... 459 Figure 157. Preliminary source markets prioritization for cycling tourism in Cyprus ....................... 462 Figure 158. Example of cycling routes signage: Istria, Croatia ......................................................... 464 Figure 159. Example of cycling routes experiental system: Istria, Croatia ...................................... 465 Figure 160. Istra Bike website ................................................................................................................... 467 Figure 161. Examples of cycling tourism labels .................................................................................... 468 Figure 162. Example of photo database: Istria, Croatia .................................................................... 469 Figure 163. Sport tourism outbound trips from Europe by source market ....................................... 475 Figure 164. Sport Tourism product business models ............................................................................ 477 Figure 165. Overview of Sports Tourism product development actions ......................................... 478 Figure 166. Preliminary prioritization of sports tourism segments for Cyprus ................................... 479 Figure 167. Preliminary source markets prioritization for sports tourism in Cyprus.......................... 480 Figure 168. Illustrative examples of sport complexes master plans.................................................. 481 Figure 169. Illustrative examples of hospitality plus sports complexes ............................................. 481 Figure 170. Examples of sport tourism alliances ................................................................................... 482 Figure 171. Illustrative proposal of the organisational structure of the company ......................... 482 Figure 172. Example of national sport-dedicated website: SportMalta ......................................... 483 Figure 173. Types of sporting events: impact on the destination and budget requirements ..... 485 Figure 174. Types of events organised by European MICE buyers in 2013 ..................................... 490 Figure 175. Meetings & Events product business model .................................................................... 493 Figure 176. Overview of Meetings & Events product development actions ................................. 494 Figure 177. Examples of successful Convention Bureauâ&#x20AC;&#x2122;s and their work ...................................... 496 Figure 178. Good examples of in-destination support ....................................................................... 498 Figure 179. Good examples of meetings & events sector development and awareness raising ....................................................................................................................................................................... 499 Figure 180. Good examples of capacity building initiatives and joint collaboration in the meetings & events sector .......................................................................................................................................... 500 Figure 181. Source market prioritisation matrix .................................................................................... 506 Figure 182. Tourism Economics' demand forecast model ................................................................. 510 Figure 183. THR demand forecast model.............................................................................................. 511 Figure 184. Cyprus growth potential (in million arrivals) ..................................................................... 512 Figure 185. Impact of the Premium Destination Strategy on the demand (in million arrivals) ... 513 Figure 186. THR approach for setting source market targets ............................................................ 514 Figure 187. International arrivals to Cyprus 2015-2030* ...................................................................... 514 Figure 188. Decreasing the dependency on UK and Russia ............................................................. 516 Figure 189. Distribution of arrivals among source market Tiers 2015-2030 ...................................... 516 Figure 190. Increase of average expenditure...................................................................................... 520 Figure 191. Source market snapshot for Cyprus .................................................................................. 531 Figure 192. Arrivals projections for Cyprus ............................................................................................. 532 Figure 193. Arrivals projections for Cyprus ............................................................................................. 533 Figure 194. Arrivals projections for Cyprus ............................................................................................. 534 Figure 195. Arrivals projections for Cyprus ............................................................................................. 535 Figure 196. Arrivals projections for Cyprus ............................................................................................. 536 Figure 197. Arrivals projections for Cyprus ............................................................................................. 537 Figure 198. Arrivals projections for Cyprus ............................................................................................. 538 Figure 199. Arrivals projections for Cyprus ............................................................................................. 539 Updated version 23.03.2017
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Figure 200. Arrivals projections for Cyprus ............................................................................................. 540 Figure 201. Arrivals projections for Cyprus ............................................................................................. 541 Figure 202. Arrivals projections for Cyprus ............................................................................................. 542 Figure 203. Arrivals projections for Cyprus ............................................................................................. 543 Figure 204. Arrivals projections for Cyprus ............................................................................................. 544 Figure 205. Arrivals projections for Cyprus ............................................................................................. 545 Figure 206. Arrivals projections for Cyprus ............................................................................................. 546 Figure 207. Content of this Plan (14 actions) ........................................................................................ 551 Figure 208. Destination net value formula ............................................................................................ 552 Figure 209. Proposed organisational structure of the CQL Management Unit ............................. 553 Figure 210. Illustrative examples of labelling system ........................................................................... 557 Figure 211. Processes within the CQL system ....................................................................................... 558 Figure 212. A successful example: New Zealand Qualmark ............................................................. 560 Figure 213. Action Plan (13 actions) ....................................................................................................... 572 Figure 214. The brand identity prism ...................................................................................................... 573 Figure 215. Proposed Cyprus Brand Identity Prism .............................................................................. 574 Figure 216. Brand architecture ................................................................................................................ 576 Figure 217. Integrated 360º brand communication system .............................................................. 576 Figure 218. Examples of India and New Zealand big ideas .............................................................. 577 Figure 219. Some leading international branding agencies ............................................................. 578 Figure 220. Examples of strong tourism brand visuals and baselines ............................................... 579 Figure 221. International examples of destination brand handbooks ............................................ 580 Figure 222. Example of branded content campaign ........................................................................ 582 Figure 223. Examples of Co-op marketing actions between Tourism Ireland & airline companies ....................................................................................................................................................................... 583 Figure 224. Tourism arrivals 2015 Cyprus vs. Canary Islands ............................................................... 589 Figure 225. Cyprus’ positioning objective for the low season in the competitive set .................. 589 Figure 226. Plan for Seasonality Reduction (11actions) ..................................................................... 590 Figure 227. Occupation rates projected with Playa de Palma’s product /segment portfolio diversification strategy .............................................................................................................................. 595 Figure 228. Occupation rates projected with Cyprus’ priority product /segments ..................... 596 Figure 229. Larnaca off-season tours and activities............................................................................ 597 Figure 230. Consumers perception of Cyprus as an all-season destination .................................. 600 Figure 231. Cyprus tourism regions ......................................................................................................... 609 Figure 232. Main infrastructure installations .......................................................................................... 621 Figure 233. Key Development Guidelines ............................................................................................. 623 Figure 234. Five Planning Concepts ....................................................................................................... 624 Figure 235. Relationship of Planning Concepts ................................................................................... 624 Figure 236. Graphical explanation of the interrelation of planning concepts .............................. 625 Figure 237. Proposed urban environment enhancements................................................................ 632 Figure 238. Existing and proposed Golf courses .................................................................................. 652 Figure 239. Proposed tourism planning divisions and clusters ........................................................... 654 Figure 240. Long term milestones 2017-2030 ........................................................................................ 666 Figure 241. First 4-year milestones 2017-20 ............................................................................................ 666 Figure 242. Potential development locations in Paralimni ................................................................ 683 Figure 243. Potential development locations in Ayia Napa ............................................................. 696 Figure 244. Potential development locations in Larnaca (City & Suburbs): .................................. 707 Figure 245. Potential development locations Larnaca in (Mazotos & Coastal) ........................... 716 Figure 246. Potential TZNI location in Pissouri - Avdimou .................................................................... 737 Figure 247. Preliminary concept land use plan for Pissouri - Avdimou ............................................ 737 Figure 248. Potential development locations in Omodos ................................................................. 746 Figure 249. Potential development locations in Pafos ....................................................................... 757 Updated version 23.03.2017
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Figure 250. Potential development location in Pafos – Geroskipou ................................................ 758 Figure 251. Potential development locations in Kathikas (Akamas) ............................................... 767 Figure 252. Potential development locations in Polis - Neo Chorio and Limni Bay ...................... 778 Figure 253. State owned land in the city of Nicosia ........................................................................... 806 Figure 254. Total tourism employment (direct and indirect jobs) by 2030 ..................................... 814 Figure 255. Projection of Direct Tourism Production by 2030 ............................................................. 822 Figure 256. “Premium & soft growth” model Strategy Map .............................................................. 829 Figure 257. Institutional Framework for the implementation of the CTS .......................................... 834 Figure 258. The OSM’s mandate: The 6 key functions to perform .................................................... 838 Figure 259. OSM proposed organisational structure ........................................................................... 841 Figure 260. NTA proposed organisational chart .................................................................................. 845 Figure 261. Implementation phasing 2017-2030 .................................................................................. 848 Figure 262. Long term milestones 2017-2030 ........................................................................................ 855 Figure 263. First 4-year milestones 2017-20 ............................................................................................ 856 Figure 264. Investment Phasing ............................................................................................................... 858 Figure 265. Roadmap for critical activities (2017) ............................................................................... 873 Figure 266. Roadmap for critical actions (2018) .................................................................................. 873
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List of Tables Table 1. Factors and variation intervals proposed for the scenarios ..................................................19 Table 2. Assumptions per scenario (annual variations) .........................................................................20 Table 3. Tourism demand projection 2025- 2030 (million) .....................................................................20 Table 4. Overnight stays projection (million) ...........................................................................................20 Table 5. Tourism expenditure projection at constant 2015 prices (million Euro) ..............................20 Table 6. Some top attractions to see and things to do in Cyprus per region ...................................30 Table 7. Main activities done in Cyprus ....................................................................................................34 Table 8. Cyprus brand’s current status by market..................................................................................45 Table 9. Associated attributes per market to Cyprus’ brand ...............................................................46 Table 10. Market presence of Cyprus in comparison with other destinations ..................................47 Table 11. Destination value chain assessment according to specific indicators ............................55 Table 12. Pillars of the Travel and Tourism (T&T) index ...........................................................................63 Table 13. Travel and Tourism (T&T) Competitiveness ranking ...............................................................63 Table 14. Cyprus’ position amongst the competitive set in the competitiveness pillars ................64 Table 15. Tourism product competitiveness as assessed by THR .........................................................68 Table 16.Competitors’ digital performance ............................................................................................70 Table 17. Main positive and negative aspects of Cyprus according to stakeholders ...................80 Table 18. Most attractive destinations for Sun & Sea vacations per source market .................... 105 Table 19. Main competitors by product according to the CTO offices abroad .......................... 107 Table 20. Main competitors per priority products according to the CTO offices abroad .......... 108 Table 21. Growth potential according to Tourism Economics.......................................................... 110 Table 22. Types of tourists in terms of average daily per capita expenditure ............................... 110 Table 23. Distribution mix by markets and demand positioning for international demand (%) . 110 Table 24. Destination positioning strategies in terms of client mix ................................................... 111 Table 25. 10 Countries’ expenditure per day and per stay (€) ......................................................... 111 Table 26. Inconsistencies identified when analysing statistical data .............................................. 112 Table 27. Assumptions per scenario (annual variations) .................................................................... 113 Table 28. Likelihood of each scenario to occur according to experts’ opinions ......................... 113 Table 29. International arrivals growth according to the Standard Destination Strategy .......... 114 Table 30. Markets mix by Destination Strategy (% of each market) ................................................ 115 Table 31. International arrivals growth potential according to the Premium Destination Strategy ....................................................................................................................................................................... 115 Table 32. International arrivals growth potential according to each Strategy ............................. 116 Table 33. International arrivals growth potential according to the Standard destination strategy ....................................................................................................................................................................... 117 Table 34. Source market share in total arrivals to Cyprus from 2000 to 2030 ................................. 117 Table 35. Growth potential by source market based on the Standard Destination Strategy.... 118 Table 36. Total international arrivals potential by source market .................................................... 119 Table 37. Growth potential by source market based on the Premium Destination Strategy .... 119 Table 38. Outbound leisure travel for at least 4 nights abroad from 27 EU countries .................. 121 Table 39. Size of the European outbound travel per market segments (number of trips (millions)) ....................................................................................................................................................................... 122 Table 40. Estimates of Cyprus potential in European outbound travel demand ......................... 123 Table 41. Potential for Cyprus in European outbound travel per market segments (thousands of trips) .............................................................................................................................................................. 124 Table 42. Market segments’ potential for Cyprus in European outbound travel per source markets (thousands of trips) .................................................................................................................................... 125 Table 43. Shares of arrivals per season among the competitive set in 2015 ................................. 128 Table 44. Shares of arrivals per season in Malta (2000 – 2015).......................................................... 129 Table 45. Shares of arrivals per season among the competitive set in 2015 ................................. 131
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Table 46. “Do you consider Cyprus as an all year-round destination?” ......................................... 133 Table 47. Perception of Cyprus obtained in the Brand Adoption Survey ...................................... 133 Table 48. Conversion ratio obtained during the Brand Adoption Survey per source market .... 134 Table 49. Average conversion ratio obtained in the Brand Adoption Survey .............................. 134 Table 50. Outbound leisure travel for at least 4 nights abroad from 27 EU countries .................. 135 Table 51. Cyprus’ Potential in the low season for the European outbound travel market ......... 136 Table 52. Estimated growth of the total international arrivals to Cyprus according to the Premium Destination Strategy .................................................................................................................................. 137 Table 53. Estimated growth assigned to the conversion ratio obtained in the Brand Adoption Survey due to the impact of Marketing actions.................................................................................. 137 Table 54. Comparison of Cyprus potential demand in the low season with and without Marketing Actions ......................................................................................................................................................... 138 Table 55. Share of arrivals per season to Cyprus compared with Malta ........................................ 139 Table 56. Cyprus arrivals per month considering Malta’s seasonality ............................................. 139 Table 57. Share of arrivals per season to Cyprus compared with Malta ........................................ 140 Table 58. Monthly arrivals to Cyprus (Malta’s seasonality) compared to competitors (2015) ... 141 Table 59. Share and total arrivals during the period November – April in 2015 ............................ 141 Table 60. SWOT elements to be considered by the Strategy ........................................................... 147 Table 61. Tourism demand results of the considered demand positioning (2030) ....................... 160 Table 62. Cyprus business model’s competitive advantage ............................................................ 174 Table 63. Components of the product attractiveness assessment ................................................. 175 Table 64. Results of the product attractiveness assessment ............................................................. 176 Table 65. Cyprus’s competitiveness criteria for products / segments ............................................. 177 Table 66. Cyprus’s competitiveness results for products / segments............................................... 178 Table 67. Product attractiveness and competitiveness assessment results ................................... 179 Table 68. Geo-market attractiveness criteria....................................................................................... 180 Table 69. Cyprus’s competitiveness criteria for geo-markets ........................................................... 180 Table 70. Types of tourists in terms of average daily per capita expenditure ............................... 182 Table 71. Destination positioning strategies in terms of client mix ................................................... 182 Table 72. Quantitative criteria selected to assess the tourism strategies ....................................... 183 Table 73. Qualitative criteria selected to assess the tourism strategies .......................................... 183 Table 74. Average daily per capita expenditure (Euro) .................................................................... 185 Table 75. Average length of stay hypothesis (days) ........................................................................... 185 Table 76. Price elasticity coefficient of the demand segments ....................................................... 185 Table 77. Price increase coefficient of the demand segments ....................................................... 185 Table 78. Tourism accommodation propensity by market (%) ......................................................... 186 Table 79. Distribution mix by markets and demand positioning for international demand (%) . 186 Table 80. Distribution mix by markets and demand positioning for domestic demand (%) ....... 186 Table 81. Tourism demand results of the considered demand positioning (2030) ....................... 187 Table 82. Demand projection 2020-2030 (Premium Destination Strategy) .................................... 188 Table 83. Tourism overnight stays estimates 2020-2030 (Premium Destination Strategy) ............ 189 Table 84. Tourism accommodation room-nights projections per market in 2020-2030 (Premium Destination Strategy) ................................................................................................................................ 189 Table 85. Economic impact projections in 2020-2030 (Premium Destination Strategy) .............. 189 Table 86. The Six Separate Action Plans ................................................................................................ 221 Table 87. Objectives per product/segment ......................................................................................... 222 Table 88. The 7 types of action that we will mostly use for the product development ............... 223 Table 89. Cyprus source market prioritisation....................................................................................... 224 Table 90. Marketing “toolbox” components for Cyprus source markets ....................................... 225 Table 91. Potential marketing models for Offices in source markets............................................... 313 Table 92. Digital marketing actions per goal ....................................................................................... 315 Table 93. Social networks catered towards national and international tourists to manage ..... 317 Updated version 23.03.2017
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Table 94. International online travel publications ............................................................................... 319 Table 95. Travel blogs awarded or recommended by media ......................................................... 319 Table 96. Global Sustainable Tourism Council Criteria ....................................................................... 335 Table 97. Sustainable Tourism baseline issues and indicators ........................................................... 336 Table 98. The Six Separate Action Plans ................................................................................................ 410 Table 99. Overview of six priority products ........................................................................................... 415 Table 100. Overview of target segments and priority target markets per product ..................... 415 Table 101. Overview of arrival targets for each product .................................................................. 416 Table 102. Overview of revenue targets (in million â&#x201A;Ź) for each product ........................................ 416 Table 103. The 7 types of action that are most frequently used in the product/segment plans417 Table 104. Compliance between product plans and initiatives ...................................................... 418 Table 105. Estimated Sun & Sea tourist arrivals and revenues in Cyprus in 2015 ........................... 422 Table 106. Sun & Sea tourist arrivals & revenue targets ..................................................................... 423 Table 107. Examples of international hospitality brands to be targeted ........................................ 432 Table 108. Overview of Sun & Sea actions by priority, type, planning and budgets ................... 434 Table 109. Infrastructure investment requirements for Sun & Sea product development .......... 437 Table 110. Stakeholders involved ........................................................................................................... 437 Table 111. Estimate of Itineraries & Culture tourist arrivals and revenues in Cyprus in 2015 ....... 440 Table 112. Itineraries & Culture tourist arrivals & revenue targets .................................................... 441 Table 113. Overview of Itineraries & Culture actions by priority, type, planning and budgets .. 451 Table 114. Infrastructure investment requirements for Itineraries & Culture ................................... 453 Table 115. Stakeholders involved ........................................................................................................... 453 Table 116. Cycling tourism arrivals and revenues in Cyprus in 2015 ................................................ 457 Table 117. Cycling tourism arrival & revenue targets ......................................................................... 458 Table 118. Cyclist segments ..................................................................................................................... 461 Table 119. Examples of cycling associations and their missions ....................................................... 466 Table 120. Overview of Cycling tourism actions by priority, type, planning and budgets ......... 471 Table 121. Infrastructure investment requirements for Cycling product development .............. 472 Table 122. Stakeholders involved ........................................................................................................... 473 Table 123. Sport tourism arrivals and revenues in Cyprus in 2015 ..................................................... 476 Table 124. Sport tourism arrival & revenue targets .............................................................................. 476 Table 125. Overview of Sport stages actions by priority, type, planning and budgets ............... 486 Table 126. Infrastructure investment requirements for Sports product development.................. 487 Table 127 Stakeholders involved ............................................................................................................ 488 Table 128. 2015 ICCA Europe Country & City rankings ...................................................................... 491 Table 129. Meetings & Events arrivals and revenues in Cyprus in 2014 ........................................... 491 Table 130. Meetings & Events arrivals and revenue targets.............................................................. 492 Table 131. Assessment of the competitiveness of Cyprus by Meetings & Events business models ....................................................................................................................................................................... 495 Table 132. Overview of Meetings & Events actions by priority, type, planning and budgets .... 501 Table 133. Stakeholders involved ........................................................................................................... 502 Table 134. Arrival and revenue targets by 2030 .................................................................................. 504 Table 135. Source markets grouping into Tiers ..................................................................................... 506 Table 136. Arrivals to Cyprus by priority source market ...................................................................... 507 Table 137. Arrivals to the Mediterranean by priority source markets for Cyprus ........................... 508 Table 138. Share of Cyprus in arrivals to Mediterranean ................................................................... 509 Table 139. Overview of different destination strategies ..................................................................... 512 Table 140. Estimated weight by source market (vegetative) ........................................................... 515 Table 141. Estimated weight by source market ................................................................................... 517 Table 142. Arrival targets per source markets ...................................................................................... 518 Table 143. Per person expenditure by source markets (in EUR) ....................................................... 519 Table 144. Impact on per person expenditure increase according to different strategies ....... 520 Updated version 23.03.2017
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Table 145. Expenditure per person according to the Premium Destination Strategy (in EUR) ... 520 Table 146. Revenue targets per source markets, in EUR (000) .......................................................... 521 Table 147. Main barrier level per source markets ................................................................................ 524 Table 148. Acquisition ratios .................................................................................................................... 525 Table 149. Impact of Cyprus Marketing Toolbox per barrier type ................................................... 527 Table 150. New role of Cyprus Tourism Offices abroad ..................................................................... 528 Table 151. Recommended marketing models according to source markets prioritisation ....... 529 Table 152. Products to be sold ................................................................................................................ 532 Table 153. Overview of arrival and revenue targets for Cyprus ....................................................... 532 Table 154. Source market action plan .................................................................................................. 532 Table 155. Products to be sold ................................................................................................................ 533 Table 156. Overview of arrival and revenue targets for Cyprus ....................................................... 533 Table 157. Source market action plan .................................................................................................. 533 Table 158. Products to be sold ................................................................................................................ 534 Table 159. Overview of arrival and revenue targets for Cyprus ....................................................... 534 Table 160. Source market action plan .................................................................................................. 534 Table 161. Products to be sold ................................................................................................................ 535 Table 162. Overview of arrival and revenue targets for Cyprus ....................................................... 535 Table 163. Source market action plan .................................................................................................. 535 Table 164. Products to be sold ................................................................................................................ 536 Table 165. Overview of arrival and revenue targets for Cyprus ....................................................... 536 Table 166. Source market action plan .................................................................................................. 536 Table 167. Products to be sold ................................................................................................................ 537 Table 168. Overview of arrival and revenue targets for Cyprus ....................................................... 537 Table 169. Source market action plan .................................................................................................. 537 Table 170. Products to be sold ................................................................................................................ 538 Table 171. Overview of arrival and revenue targets for Cyprus ....................................................... 538 Table 172. Source market action plan .................................................................................................. 538 Table 173. Products to be sold ................................................................................................................ 539 Table 174. Overview of arrival and revenue targets for Cyprus ....................................................... 539 Table 175. Source market action plan .................................................................................................. 539 Table 176. Products to be sold ................................................................................................................ 540 Table 177. Overview of arrival and revenue targets for Cyprus ....................................................... 540 Table 178. Source market action plan .................................................................................................. 540 Table 179. Products to be sold ................................................................................................................ 541 Table 180. Overview of arrival and revenue targets for Cyprus ....................................................... 541 Table 181. Source market action plan .................................................................................................. 541 Table 182. Products to be sold ................................................................................................................ 542 Table 183. Overview of arrival and revenue targets for Cyprus ....................................................... 542 Table 184. Source market action plan .................................................................................................. 542 Table 185. Products to be sold ................................................................................................................ 543 Table 186. Overview of arrival and revenue targets for Cyprus ....................................................... 543 Table 187. Source market action plan .................................................................................................. 543 Table 188. Products to be sold ................................................................................................................ 544 Table 189. Overview of arrival and revenue targets for Cyprus ....................................................... 544 Table 190. Source market action plan .................................................................................................. 544 Table 191. Products to be sold ................................................................................................................ 545 Table 192. Overview of arrival and revenue targets for Cyprus ....................................................... 545 Table 193. Source market action plan .................................................................................................. 545 Table 194. Products to be sold ................................................................................................................ 546 Table 195. Overview of arrival and revenue targets for Cyprus ....................................................... 546 Table 196. Source market action plan .................................................................................................. 546 Updated version 23.03.2017
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Table 197. Marketing Toolbox per source market from Tier 1 and 2 ................................................ 547 Table 198. Marketing Toolbox per source market from Tier 3 ........................................................... 548 Table 199. Functions within the Cyprus Quality Labels Management Unit .................................... 554 Table 200. Stakeholders involved ........................................................................................................... 565 Table 201. Action Plan, Budget, and Planning .................................................................................... 565 Table 202. Positioning statement approach proposed ..................................................................... 574 Table 203. Cyprus Brand attributes, personality, and values proposal ........................................... 575 Table 204. Some good examples of Big Ideas ..................................................................................... 577 Table 205. Stakeholders role in this plan ................................................................................................ 585 Table 206. Action Plan, Budget and Planning ..................................................................................... 586 Table 207. Benefits to be offered by ‘PPS Destinations’ and basic requirements ........................ 593 Table 208. Product potential to generate PPS demand from selected source markets ............ 594 Table 209. Some off-season events and festivals held in Cyprus ..................................................... 598 Table 210. Stakeholders role in this plan ................................................................................................ 604 Table 211. Action Plan, Budget, and Planning .................................................................................... 605 Table 212. Tourism accommodation typologies ................................................................................. 614 Table 213. Re-categorisation of Tourist Accommodation ................................................................. 615 Table 214. Cyprus: Existing Tourist Accommodation 2015 ................................................................. 616 Table 215. Cyprus: Existing Tourist Accommodation 2015 – by Area .............................................. 616 Table 216. Accommodation evolution by district (beds) .................................................................. 617 Table 217. Accommodation evolution by typology (beds) .............................................................. 617 Table 218. Ammochostos: Existing Tourist Accommodation 2015 ................................................... 618 Table 219. Larnaca: Existing Tourist Accommodation 2015 .............................................................. 618 Table 220. Limassol: Existing Tourist Accommodation 2015 ............................................................... 619 Table 221. Pafos: Existing Tourist Accommodation 2015 .................................................................... 619 Table 222. Troodos mountains: existing tourist accommodation 2015 ........................................... 620 Table 223. Nicosia: Existing Tourist Accommodation 2015 ................................................................ 620 Table 224. Serviced Unit & Residences Multipliers ............................................................................... 639 Table 225. Utility Service Consumption by Typical Tourist .................................................................. 641 Table 226. Estimated utilities demand from International tourists between 2015 and 2030 ....... 641 Table 227. Utilities, responsible and planning framework .................................................................. 641 Table 228. Distribution of demand from International tourists in 2015 and 2030 ........................... 642 Table 229. Investment in new utilities 2017-2030 (Mill. Euro) .............................................................. 642 Table 230. Investment to improve current utilities 2017-2030 (Million Euro) .................................... 642 Table 231. Investment in new infrastructures, 2017-2030 (Mill. Euro) ................................................ 643 Table 232. Investment to improve current infrastructure,2017-2030 (Million Euro) ........................ 644 Table 233. Investment in new public services 2017-2030 (Mill. Euro) ............................................... 644 Table 234. Investment to improve current public services 2017-2030 (Million Euro) ..................... 644 Table 235. Cyprus: Projected Growth in Tourism Arrivals to 2030 ..................................................... 648 Table 236. Cyprus: Projected Tourist Accommodation 2030 ............................................................ 648 Table 237. Marinas projected in Cyprus ................................................................................................ 650 Table 238. Golf courses projected in Cyprus ........................................................................................ 651 Table 239. Share of keys and arrivals 2015 ............................................................................................ 657 Table 240. Alternative approaches to allocate .................................................................................. 659 Table 241. International overnight stays distribution per accommodation type (2014) ............. 660 Table 242. Evolution of share and overnight stays distribution per accommodation type ........ 661 Table 243. Building specifications for tourism development ............................................................. 662 Table 244. Area per key............................................................................................................................ 662 Table 245. Total land required for tourism development ................................................................... 663 Table 246. Distribution of required land between resorts, cities, and rural areas ......................... 664 Table 247. Additional land requirements for golf courses ................................................................. 664 Table 248.Main stakeholders and their roles ........................................................................................ 668 Updated version 23.03.2017
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Table 249. The four types of hard investment 2017-2030 (Million Euro) ........................................... 669 Table 250.Soft investment related to the implementation ................................................................ 669 Table 251. Evolution of international tourist arrivals in Paralimni (2011- 2015) ................................ 677 Table 252. Top 3 source markets for Paralimni (2014) ......................................................................... 677 Table 253. Tourism performance in Paralimni (2015) .......................................................................... 677 Table 254. Accommodation supply in Paralimni (2015)..................................................................... 678 Table 255. Elements supporting and limiting Paralimni Vision ........................................................... 678 Table 256. Recommendations by product segment for Paralimni .................................................. 679 Table 257. Projected growth in tourist arrivals for Paralimni (2030) .................................................. 681 Table 258. Tourist accommodation projection for Paralimni (2030) ................................................ 682 Table 259. Tourism services improvement needed in Paralimni ....................................................... 685 Table 260. Utility service requirements in Paralimni (2015 and 2030) ............................................... 685 Table 261. Urban environment improvement needed in Paralimni ................................................ 686 Table 262. Action plan for Paralimni integrated development plan .............................................. 687 Table 263. Stakeholders for Paralimni integrated development plan ............................................ 687 Table 264. Estimated budget for the implementation in Paralimni (Millions) ................................. 688 Table 265. Evolution of international tourist arrivals to Ayia Napa (2011- 2015) ............................ 689 Table 266. Top 3 source markets 2014 for Ayia Napa ........................................................................ 690 Table 267. Tourism performance in Ayia Napa (2015) ....................................................................... 690 Table 268. Accommodation supply in Ayia Napa (2015) ................................................................. 690 Table 269. Elements supporting and limiting Ayia Napaâ&#x20AC;&#x2122;s Vision ..................................................... 691 Table 270. Recommendations by product segment for Ayia Napa ............................................... 692 Table 271. Projected growth in tourist arrivals in Ayia Napa (2030) ................................................. 693 Table 272. Tourist accommodation projection for Ayia Napa (2030) ............................................. 694 Table 273. Tourism services improvement needed in Ayia Napa .................................................... 696 Table 274. Utility service requirements in Ayia Napa (2015 and 2030) ............................................ 697 Table 275. Urban environment improvement needed in Ayia Napa ............................................. 697 Table 276. Action plan for Ayia Napa integrated development plan ........................................... 698 Table 277. Stakeholders for Ayia Napa integrated development plan ......................................... 699 Table 278. Estimated budget for the implementation in Ayia Napa (Millions) .............................. 699 Table 279. Evolution of international tourist arrivals in Larnaca (2011- 2015) ................................. 700 Table 280. Top 3 source markets for Larnaca (2014) .......................................................................... 701 Table 281. Tourism performance in Larnaca (2015) ............................................................................ 701 Table 282. Accommodation supply in Larnaca District (2015) ......................................................... 701 Table 283. Elements supporting and limiting Larnaca City and Suburbs Vision ............................ 702 Table 284. Recommendations by product segment for Larnaca City and Suburbs ................... 703 Table 285. Projected growth in tourist arrivals in Larnaca City and Suburbs (2030) ..................... 704 Table 286. Tourist accommodation projection for Larnaca City and Suburbs (2030) ................. 705 Table 287. Tourism services improvement needed in Larnaca City and Suburbs ........................ 708 Table 288. Utility service requirements in Larnaca City & Suburbs (2015 and 2030) ..................... 708 Table 289. Urban environment improvement needed in Larnaca City ......................................... 709 Table 290. Action plan for Larnaca City integrated development plan ....................................... 710 Table 291. Stakeholders for Larnaca City integrated development plan ..................................... 710 Table 292. Estimated budget for the implementation in Larnaca City (Millions) .......................... 711 Table 293. Elements supporting and limiting Coastal Larnaca Vision ............................................. 712 Table 294. Recommendations by product segment for Coastal Larnaca .................................... 713 Table 295. Projected growth in tourist arrivals in Coastal Larnaca (2030) ...................................... 714 Table 296. Tourist accommodation projection for Coastal Larnaca (2030) .................................. 715 Table 297. Tourism services improvement needed in Coastal Larnaca ......................................... 717 Table 298. Utility service requirements in Coastal Larnaca (2015 and 2030) ................................. 718 Table 299. Urban environment improvement needed in Coastal Larnaca .................................. 718 Table 300. Action plan for Coastal Larnaca integrated development plan ................................ 719 Updated version 23.03.2017
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Table 301. Stakeholders for Coastal Larnaca integrated development plan .............................. 720 Table 302. Estimated budget for the implementation in Coastal Larnaca (Millions) ................... 720 Table 303. Evolution of international tourist arrivals in Limassol (2011- 2015).................................. 722 Table 304. Top 3 source markets for Limassol (2014)........................................................................... 722 Table 305. Tourism performance in Limassol District (2015) ............................................................... 722 Table 306. Limassol District: Accommodation Supply 2015 ............................................................... 723 Table 307. Elements supporting and limiting Limassol Vision ............................................................. 723 Table 308. Recommendations by product segment for Limassol City and Suburbs .................... 724 Table 309. Projected growth in tourist arrivals for Limassol City and Suburbs (2030) .................... 725 Table 310. Tourist accommodation projection for Limassol City and Suburbs (2030) .................. 726 Table 311. Tourism services improvement needed in Limassol City and Suburbs ......................... 728 Table 312. Utility service requirements in Limassol City and Suburbs (2015 and 2030) ................. 728 Table 313. Urban environment improvement needed in Limassol City and Suburbs .................. 729 Table 314. Action plan for Limassol City and Suburbs integrated development plan ................ 730 Table 315. Stakeholders for Limassol City and Suburbs integrated development plan .............. 730 Table 316. Estimated budget for the implementation in Limassol City and Suburbs (Millions)... 731 Table 317. Elements supporting and limiting Pissouri - Avdimou Vision ........................................... 732 Table 318. Recommendations by product segment for Pissouri - Avdimou .................................. 733 Table 319. Projected growth in tourist arrivals for Pissouri - Avdimou (2030) .................................. 734 Table 320. Tourist accommodation projection for Pissouri - Avdimou (2030) ................................ 735 Table 321. Tourism services improvement needed in Pissouri - Avdimou ...................................... 738 Table 322. Utility service requirements in Pissouri - Avdimou (2015 and 2030) ............................... 738 Table 323. Urban environment improvement needed in Pissouri - Avdimou ................................ 739 Table 324. Action plan for Pissouri - Avdimou integrated development plan .............................. 740 Table 325. Stakeholders for Pissouri - Avdimou integrated development plan............................. 740 Table 326. Estimated budget for the implementation in Pissouri - Avdimou (Millions) ................. 741 Table 327. Elements supporting and limiting Omodos Vision ............................................................ 742 Table 328. Recommendations by product segment for Omodos ................................................... 743 Table 329. Projected growth in tourist arrivals for Omodos (2030) ................................................... 744 Table 330. Tourist accommodation projection for Omodos (2030) ................................................. 744 Table 331. Tourism services improvement needed in Omodos ........................................................ 747 Table 332. Utility service requirements in Omodos (2015 and 2030) ................................................ 747 Table 333. Urban environment improvement needed in Omodos ................................................. 748 Table 334. Action plan for Omodos integrated development plan ............................................... 749 Table 335. Stakeholders for Omodos integrated development plan ............................................. 749 Table 336. Estimated budget for the implementation in Omodos (Millions).................................. 750 Table 337. Evolution of international tourist arrivals in Pafos (2011- 2015) ...................................... 752 Table 338. Top 3 source markets for Pafos (2014) ............................................................................... 752 Table 339. Tourism performance in Pafos (2015) ................................................................................. 752 Table 340. Accommodation supply in Pafos (2015) ........................................................................... 753 Table 341. Elements supporting and limiting Pafos City and Suburbs Coastal Vision .................. 753 Table 342. Recommendations by product segment for Pafos......................................................... 754 Table 343. Projected growth in tourist arrivals for Pafos City and Suburbs (2030) ......................... 755 Table 344. Tourist accommodation projection for Pafos City and Suburbs (2030)....................... 756 Table 345. Tourism services improvement needed in Pafos City and Suburbs .............................. 759 Table 346. Utility service requirements in Pafos City (2015 and 2030) ............................................. 759 Table 347. Urban environment improvement needed in Pafos City and Suburbs ....................... 760 Table 348. Action plan for Pafos City and Suburbs integrated development plan ..................... 761 Table 349. Stakeholders for Pafos City and Suburbs integrated development plan ................... 761 Table 350. Estimated budget for the implementation in Pafos City and Suburbs (Millions) ....... 762 Table 351. Elements supporting and limiting Kathikas Vision ............................................................ 763 Table 352. Recommendations by product segment for Kathikas ................................................... 764 Updated version 23.03.2017
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Table 353. Projected growth in tourist arrivals for Kathikas (2030) .................................................... 765 Table 354. Tourist accommodation projection for Kathikas (2030) ................................................. 766 Table 355. Tourism services improvement needed in Kathikas ......................................................... 768 Table 356. Utility service requirements in Kathikas (2015 and 2030) ................................................ 768 Table 357. Urban environment improvement needed in Kathikas .................................................. 769 Table 358. Action plan for Kathikas integrated development plan ................................................ 770 Table 359. Stakeholders for Kathikas integrated development plan .............................................. 770 Table 360. Estimated budget for the implementation in Kathikas (Millions) .................................. 771 Table 361. Evolution of international tourist arrivals in Polis and Limni Bay (2011- 2015) .............. 772 Table 362. Top 3 source markets for Polis and Limni bay (2014) ....................................................... 773 Table 363. Tourism performance in Polis and Limni Bay (2015) ......................................................... 773 Table 364. Accommodation supply in Polis and Limni Bay 2015 ...................................................... 773 Table 365. Elements supporting and limiting Polis Vision .................................................................... 774 Table 366. Recommendations by product segment for Polis and Limni Bay ................................ 775 Table 367. Projected growth in tourist arrivals for Polis and Limni Bay (2030) ................................ 776 Table 368. Tourist accommodation projection for Polis and Limni Bay (2030) .............................. 776 Table 369. Tourism services improvement needed in Polis and Limni bay ..................................... 779 Table 370. Utility service requirements in Polis and Limni Bay (2015 and 2030) ............................. 779 Table 371. Urban environment improvement needed in Polis and Limni Bay ............................... 780 Table 372. Action plan for Polis and Limni Bay integrated development plan ............................. 781 Table 373. Stakeholders for Polis and Limni Bay integrated development plan ........................... 781 Table 374. Estimated budget for the implementation in Polis and Limni Bay (Millions) ............... 781 Table 375. Evolution of international tourist arrivals in the Mountains (2011- 2015) ...................... 783 Table 376. Top 3 source markets for the Mountains (2014) ............................................................... 783 Table 377. Tourism performance in the Mountains (2015) ................................................................. 783 Table 378. Accommodation supply in the Mountains (2015) ........................................................... 784 Table 379. Elements supporting and limiting Troodos Vision ............................................................. 784 Table 380. Recommendations by product segment for Troodos .................................................... 785 Table 381. Projected growth in tourist arrivals in Troodos (2030) ...................................................... 786 Table 382. Tourist accommodation projection for Troodos (2030) .................................................. 787 Table 383. Tourism services improvement needed in Troodos ......................................................... 788 Table 384. Utility service requirements in Troodos (2015 and 2030) ................................................. 789 Table 385. Urban environment improvement needed in Troodos ................................................... 789 Table 386. Action plan for Troodos integrated development plan ................................................. 790 Table 387. Stakeholders for Troodos integrated development plan ............................................... 791 Table 388. Estimated budget for the implementation in Troodos (Millions) ................................... 791 Table 389. Elements supporting and limiting Marathasa Valleyâ&#x20AC;&#x2122;s Vision ........................................ 793 Table 390. Projected growth in tourist arrivals for Marathasa Valley (2030) .................................. 794 Table 391. Tourist accommodation projection for Marathasa Valley (2030) ................................ 795 Table 392. Tourism services improvement needed in Marathasa Valley ....................................... 796 Table 393. Utility service requirements in Marathasa Valley (2015 and 2030) ............................... 797 Table 394. Urban environment improvement needed in Marathasa ............................................. 797 Table 395. Action plan for Marathasa Valley integrated development plan ............................... 798 Table 396. Stakeholders for Marathasa Valley integrated development plan ............................. 799 Table 397. Estimated budget for the implementation in Marathasa Valley(Millions) .................. 799 Table 398. Evolution of international tourist arrivals in Nicosia (2011- 2015) ................................... 801 Table 399. Top 3 source markets for Nicosia (2014) ............................................................................ 801 Table 400. Tourism performance in Nicosia (2015) .............................................................................. 801 Table 401. Accommodation supply in Nicosia (2015) ........................................................................ 802 Table 402. Elements supporting and limiting Nicosiaâ&#x20AC;&#x2122;s Vision ........................................................... 802 Table 403. Projected growth in tourist arrivals for Nicosia (2030) ..................................................... 804 Table 404. Tourist accommodation projection for Nicosia (2030) ................................................... 805 Updated version 23.03.2017
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Table 405. Utility service requirements in Nicosia (2015 and 2030) .................................................. 807 Table 406. Action plan for Nicosia integrated development plan .................................................. 809 Table 407. Stakeholders for Nicosia integrated development plan ................................................ 809 Table 408. Estimated budget for the implementation in Nicosia (Millions) .................................... 810 Table 409. Estimate of new tourism jobs (direct, indirect and induced) by 2030 ......................... 814 Table 410. Distribution of new employment in the tourism sector by job categories, by 2030 1 . 815 Table 411. Estimate of average daily expenditure 2030 by travel motivation and customer value proposition (Euro)....................................................................................................................................... 817 Table 412. Estimated tourism direct (D) and total (D+I) production by travel motivation .......... 818 Table 413. Estimated Premium tourism income by travel motivation (Mill. Euro) .......................... 819 Table 414. Share of tourism expenditure and tourism production in the GDP (CAGR =2,3%) ... 820 Table 415. Value Gap ............................................................................................................................... 821 Table 416. Factor affecting Value Gap in Direct Tourism production ............................................ 821 Table 417. Tourism Income per economic activity (million Euro) ..................................................... 823 Table 418. Impact of the current tourism model on Cyprus’ economic activity Million Euro..... 824 Table 419. Expected increase of tax revenue as a result of the strategy ...................................... 825 Table 420. Impact of the Strategy on the quality of life for Cypriots ............................................... 826 Table 421. Location of the new accommodation keys ..................................................................... 827 Table 422. Main figures for each of the three proposed growth models ....................................... 828 Table 423. Cyprus CO2 emissions (Ktons CO2)...................................................................................... 831 Table 424. Ministries directly involved in the implementation of the Strategy ............................... 835 Table 425. The three key roles of the OSM ............................................................................................ 837 Table 426. The 6 key functions: OSM tasks, roles, and responsibilities .............................................. 839 Table 427. Head of OSM Chief Strategy Officer (CSO) (1 position) ................................................. 842 Table 428. Strategy Managers (3 positions) .......................................................................................... 842 Table 429. Analysts (5 positions) .............................................................................................................. 843 Table 430. SPOCs at the NTA Directorates (3 positions) ..................................................................... 843 Table 431. Five main types of investment ............................................................................................. 857 Table 432. Development in four phases ................................................................................................ 858 Table 433. The five types of investment 2017-2030 (Million Euro) ..................................................... 860 Table 434. Distribution (private-public) of projected investment 2017-2030 (Mill. Euro) .............. 860 Table 435. Distribution of projected total investment 2017-2030 (new investment + improvements of the current offer) (Million Euro) ........................................................................................................... 861 Table 436. Distribution (new investment / improvements of current offer) of projected total investment required 2017-2030 (Million Euro) ....................................................................................... 861 Table 437. Soft Investment by task typology 2017-2030 (Million Euro) ............................................. 861 Table 438. New product investment for Cyprus’ Experience System 2017–2030 (Mill. Euro) ...... 862 Table 439. Investment to improve a current Cyprus Experience System tourism product 2017– 2030 (Million Euro) ...................................................................................................................................... 863 Table 440. Investment in new infrastructures, utilities, and public services 2017-2030 (Mill. Euro) ....................................................................................................................................................................... 864 Table 441. Investment to improve current infrastructure, utilities, and public services 2017-2030 (Million Euro)................................................................................................................................................ 865 Table 442. Investment in new tourist accommodation 2017-2030................................................... 865 Table 443. Investment in improving current tourist accommodation 2017-2030 .......................... 866 Table 444. Investment in new Real Estate 2017-2030.......................................................................... 866 Table 445. Accommodation facilities concepts .................................................................................. 876 Table 446. Infrastructure, utilities and other supporting public services concepts and assumptions ....................................................................................................................................................................... 877 Table 447. Tourist accommodation distribution in resorts, urban areas, rural areas and multipliers for serviced units and real estate ........................................................................................................... 877
Updated version 23.03.2017
Republic of Cyprus
Innovative Tourism Advisors Diagonal 605, 9th 5th Tel. +34.93.206.38.50 08028 Barcelona - Spain www.thr.es
Updated version 23.03.2017