Site Loader

My name is Georgia CEO of Windmills Car Hire and entrepreneur!

As we all know corona various is spreading around the world with WHO (world health organisation) advising people to take actions regarding to their personal health!

Here is comes some critical questions ;

1) Would that affect the tourist arrivals in the island? The answer is YES!

Trips cancellations :Already airlines are cancelling flights  until the end of April. It is a worldwide phenomenon and many tourist resorts and attractions are suffering. Unfortunately the only way to access Cyprus is by plane or with cruise from Greece and other few destinations.  Cancellations in flights it means no arrivals in Cyprus. When flights open again though for a significant time of period I believe they will add new regulations regarding how many passengers can travel in each flight based on the airplane model. So based in that assumptions and be realistic , I believe that season either will be completely lost or partly lost. I believe each independent family business will reduce it’s profit 80 percent. The critical questions is how many business can survive , how many business can survive after such a crisis. Let’s keep in mind that family business in tourist sector most of them are already suffering from ALL INCLUSIVE all these year and they work under their losses. 

Cancellations in all other touristic services. For example our company is dealing with 100 percent cancellation in April of course and 50 percent cancellations for May. Hotels , cruises , wedding parties I assume they have more or less the same numbers. 

Unemployment : Most of the population for one month will not be able to gain as much money as the previous months despite the fact that some governments decrease taxes for that period, freeze mortgages and took the decision to  support employees  by providing them  60,70 percent of their salary for April! That actions are not enough to safe tourism. Because we are travelling on our saving ( most of us ) .People who are travelling in May June July August, September they will continue to cancel their holidays because they did not safe enough money for holidays this year ! Lack of income can influence the amount of tourist and most important the quality of tourists arriving in Cyprus. 

2) Family business will have enough cash flow or business to survive?

The answer : ” Depends”

Another big obstacle for independent family business such as car hires, shops, souvenirs is that they have to pay rent in order to operate their business. As a result they will require to pay rent for whole year around but operating less months for this year. Their expenses will run monthly.  Business which are owning their place will be in better positions. But again not in really good because , if they decide to run their services then they have to employ people and pay salaries. Let’s hope that will be enough business to cover their expenses at least. More expenses less profit as simple as that. 

3) Coronavirus can affect other business/ fields except tourist sector?

Yes it can easily! Such as plumbers, mechanics, services in general. Our economy around 60 % is driver from tourism so yes will had impact in another services and fields in the island . It is like domino when one domino falls then the other they follow. The reason is simple and base on basic economics. Consumption will become less, businesses will find it hard to survive in tourism and they will influence other services and business internal and externally. 

4) For how long do I believe that situation can last?

Issues in tourist sector will last until 2021 I believe. For the season 2021 business will be able to function properly with less risk. Governments are in a process to establish  new regulations  for airlines in order to motivate them to cut flights. If that new regulations and motivation are profitable enough for them ( because business is all about money) they might continue to postpone flight or limit the number of passengers for each flight. If airlines decrease the amount of passengers for each flight without governments recovering their losses , then that will have impact in ticket price.Airplanes tickets will be extremely expensive for some people to travel. Another issue that I can see raised from all that is bankruptcy some tours operator that I consider them as a ” zombies companies” such as Biblio Globus for example. 

Taking all that things into consideration, we need to prepare to take actions, be patient and think alternatives options such as re allocating costs, financial management analysis, realistic scenarios in operations management and supply chains for each business. Calculation careful all the inputs we need to add in our business, continue to process ( how much will cost to use our inputs , running expenses , afford , time ) in order to result in output.  The most hard part is to answer the question how many output will be enough for company to survive ? The best question is how many outputs will be enough for my business in order to make my living and only to survive?

My final thought is when things they get better in 2021 lets assume , do you think that tourist sectors will not collapse ? Many of you will say yes. I  might agree in a global level. What else can contribute into collapse of tourist sector in Cyprus ? Well the answer is in my previous articles regarding all inclusive and my presentation in my LinkedIn Profile. How about climate change as well. Can climate change influence tourist sector in Cyprus? ( another question for another time )




3 Replies to “Keep an eye on affects of coronavirus on tourist sector : Hypothesis in Cyprus”

  1. Cyprus Finance Minister Constantinos Petrides has opened himself up to ridicule by claiming Cyprus economy will shrink by about five per cent.

    If we look at European countries in lockdown, with most sectors shut down, economies will shrink by far more than five percent.

    Only five percent with total collapse of Cyprus tourist industry?

    Or is this a tacit admission that the only beneficiaries of the tourist sector are a handful of hoteliers and the foreign tour companies?

  2. Two questions need to be addressed.

    What action to stop coronavirus entering Cyprus?

    What action once coronavirus reaches Cyprus?

    Coronavirus is out of control in Iran, will spread across Middle East and into Turkey, will then reach occupied northern Cyprus.

    Crossing from the north should be limited to Ledra Palace on foot with everyone screened. Medical assistance provided to the north if requested, sharing of data.

    Temperature screening at all ports of entry, airports and ports.

    Any cases, isolated for 14 days. all contacts traced and isolated.

    Israel is placing all visitors in 14 days quarantine.

    These measures will slow, will not halt, coronavirus in Cyprus.

    Once Cyprus has coronavirus there will be no tourists. Even if no coronavirus, there will be no tourists.

    What then?

    Small businesses will collapse, as they have not been viable for years, killed by all-inclusive hotels and tour companies.

    Hotels are not dong well, screwed for years by tour companies and their own laziness and stupidity.

    What we have seen of the tourism ministry does not give cause for hope.

    We met with them early last season, they politely listened. When we asked for a follow up meeting at the end of season to see what they were doing, especially in light of Thomas Cook collapse, they stalled and no meeting took place.

    If a bail out is to take place, there has to be structural changes.

    Large bars that attract the dregs of the tourist industry should not be bailed out. To be replaced with top quality coffee shops and traditional tavernas.

    A clampdown on noise. No noise audible in the street, quiet after midnight.

    Example would be coffee shops in Athens, restaurants in Plaka.

    Examples in Cyprus few and far between, but in the back streets of Larnaca near Lazarus Church we have Paul’s Coffee Shop and Lazaris Bakery Bar.

    Quality craft beer from small craft beer breweries, coffee from best coffee roasteries, wine from local vineyards.

    Where restaurants are bailed out they have to improve service and quality of food served. Most would fail, they have been in a race to the bottom, cutting service and quality.

    Hotels must improve. They must change. No all-inclusive hotels, minimise dependency of bookings with tour companies to less than 20%, and eventually phased out. Tour companies would be required to pay at end of each month. The focus on quality and service. No hotel group to be bailed out, Only local hotels of less than five hotels.

    If tourist industry to be bailed out, it has to be to attract quality tourists, not the dregs of the industry.

    Note: There is now a collapse of bookings in England

  3. Do you wish for visitors from England where coronavirus spreading rapidly but no action other than telling people to wash their hands and stay home if feel sick?

    Italy is in lock down. Italy resembles Wu Han in January. Police are driving around the streets warning people to stay home

    Meanwhile in UK, nada, other than placing entirely the responsibility on individuals to wash their hands and to stay home if fall sick.

    No closing down sporting events, no suspending flights to infected areas, sends out entirely the wrong message.

    No small wonder many of the people I speak to do not take covid-19 seriously, think no worse than seasonal flu.

    We see what the future holds by looking to other countries, and yet still no action.

    Covid-19 twice as infectious as seasonal flu, ten times the lethality.

    Mortality rate 3.4% (in Italy exceeds 4%).

    Covid-19 has mutated into a more aggressive strain.

    People are advised not to travel, avoid crowded places: sporting events, pubs, planes, airports,

    First are in Greece to report covid-19 was Thessalonika. Cheap labour from the region brought over to Cyprus. Will they be put in 14-day quarantine?

    What planes to quarantine and put into lock down hotels?

    In Cyprus, local businesses are not in a good financial state to survive loss of visitors. For the last few years their businesses have not been viable, killed by all-inclusive hotels and failure of government to act.

    Hotels could cut their prices for direct bookings, but too stupid too greedy. And I doubt it will work. Too risky to travel. Airlines are cutting flights, laying off staff, to try and remain in business. Many airlines will go bust, too few passengers.

Leave a Reply