hotel profitability — Hotel profitability is essential for the sustainability of Cyprus’ tourism sector, as emphasised by the president of the hoteliers association (Pasyxe), Thanos Michaelides. He argues that the focus should shift from merely monitoring arrival figures to ensuring that hotels operate profitably, which in turn supports necessary investments and modernisation.
Hotel profitability: Shifting the Focus from Arrivals to Profitability
As Cyprus wraps up a steady but unremarkable season, Michaelides conveyed to the Cyprus News Agency (CNA) that profitability is crucial. He described it as “the driving force for the necessary investments and the continuous modernisation of hotel units.” This shift in focus is vital for maintaining and improving the quality of the tourist experience.
Emphasising the Cypriot Experience
Michaelides highlighted the importance of investing in the authentic Cypriot experience, which he believes is the country’s strongest comparative advantage. He stated that while it is essential to attract visitors, the quality of their experience is what will encourage repeat visits and enhance the reputation of Cypriot tourism.
Air Connectivity and New Markets
The president of Pasyxe also discussed the significance of air connectivity in boosting tourism. He pointed out that emerging markets, particularly Poland and Israel, are proving to be positive examples in this regard. By ensuring direct flights and enhancing accessibility, Cyprus can continue to attract a diverse range of tourists.
Fine-tuning Regulatory Frameworks
On the regulatory front, Michaelides noted that there is no pressing need for major revisions to the hotel classification code, which has recently undergone updates with notable success. However, he stressed that greater attention should be given to the operating licence process, which he described as complicated due to the involvement of multiple public departments and local authorities.
Streamlining Licensing Procedures
Michaelides expressed concerns regarding the multiple licences and strict deadlines that make compliance a challenge for hotel operators. He revealed that the association has already submitted proposals aimed at creating a more functional and efficient licensing procedure that benefits both the state and the private sector.
Seasonal Patterns and Customer Expectations
Reflecting on the current season, Michaelides observed that occupancy levels and customer requirements have remained relatively stable compared to the previous year. He anticipates that the next year will follow a similar trend or possibly see slight improvements. While arrivals have shown an upward trajectory, he cautioned that this does not necessarily translate into higher occupancy rates.
The Link Between Profitability and Investment
Michaelides firmly believes that maintaining healthy profitability is essential for ongoing investment in the hotel sector. He stated, “If there is healthy profitability, the investor will continue to invest in the industry. If profitability suffers, investment will decrease, and this at the end of the day will also reduce the quality of the tourism industry as we know it today.” This perspective underscores the need for a balanced approach that prioritises both visitor numbers and financial viability.
Addressing Labour Shortages
Another pressing issue facing the hotel industry is labour shortages, a challenge that extends beyond Cyprus and affects many parts of Europe and the developed world. Michaelides noted that while the expedited issuance of permits for third-country workers has provided some relief, more work is needed to address the industry’s staffing needs.
Enhancing Working Conditions for Better Training
He pointed out that improving training opportunities for workers hinges on better working conditions. Allowing seasonal staff to return for more consecutive years can help build experience and productivity, ultimately benefiting the industry as a whole. Michaelides also mentioned that further improvements are required in the rules governing the employment of third-country nationals, particularly to align with the seasonal nature of the tourism sector.
Looking Ahead: Optimism for Future Growth
As the hotel industry in Cyprus reflects on its current state, there is cautious optimism for future growth. By prioritising profitability, investing in the authentic Cypriot experience, and addressing regulatory and labour challenges, the sector can position itself for sustainable success. Michaelides’ insights serve as a reminder of the importance of balancing visitor numbers with the economic realities of running a successful hotel business in today’s competitive environment.
