Determinants of Tourism for “Sun and Sea’ Cyprus

Abstract

1. Introduction Tourism contributes to the economic growth of a country, as it is considered a creator of jobs and the engine for economic, social and cultural development (Adamou and Clerides, 2009; Halicioglu, 2004; Idowu and Bello, 2010; Pantazidis, 1997; Jo'hannesson and Huijbens, 2010; Giacomelli, 2006; Onder et al., 2009; Eurostat, 2010). Tourism can help rural areas become tourism centers with many job opportunities. It is estimated that in 2010 tourism generated 221 million jobs around the world and by 2015 it is expected to generate 269 million jobs (Tarlow, 2010). Economies benefit by hotel and restaurant expenditures and taxes, conventions and meetings, transportation taxes and foreign capital investment, especially in hotel construction. (Tarlow, 2010). Export income produced by international tourism ranks fourth after fuels, chemicals and automotive products and it is considered a renewable, infinite export commodity (Mladenovic and Zlatkovic, 2009; Tarlow, 2010). Halicioglu (2004) supports that international tourism ranks first as foreign currency receipts are more than petroleum products, motor vehicles, telecommunication equipment and textiles. Tourism is also a powerful tool for every country to promote its traditional heritage (Idowu and Bello, 2010). Tourism has been for many years a major source of income in Cyprus and has contributed in the economic growth of the island (Clerides and Pashourtidou, 2007; Sola, 2008; Eurostat, 2010; Cyprus Tourism Organisation (CTO), 2010). Cyprus is now an established tourist destination in an extremely competitive environment. Although Cyprus possesses huge and knowledge of over 30 years in the tourism industry, nowadays tourism in Cyprus is passing through a slowdown phase. Therefore Cyprus is called to utilize its accumulated and make a fresh start within the new global competitive environment (CTO, 2010). Existing literature has shown that international tourist demand is mainly affected by economic recessions and financial problems, political instability, natural disasters and energy costs (Beirman, 2008; Hall, 2010; Li et al., 2010). Numerous studies exist regarding the determinants of tourism in many countries, but literature regarding Cyprus is inadequate. The current study will examine the determinants of tourism for Cyprus and aims to provide new evidence and interesting insight. 2. Tourism in Cyprus A mosaic of nature and culture, a whole magical world concentrated in a small, warm and hospitable island in the Mediterranean, at the crossroads of three continents, between East and West that offers a multidimensional, qualitative tourist experience (CTO, 2010). Cyprus is considered to be one of the most tourism-dependent regions in the world, with a strong tourism tradition. It is among the countries with a traditional tourist product and belongs to the European market, which still holds the lion's share in the international tourism market (Sola, 2008). Rich history, warm summers, and nice beaches are the main traits of Cyprus that attract tourists. The tourism industry started to grow in the mid-1960s. However, after the Turkish invasion in 1974, there was a huge reduction in the arrivals of visitors in Cyprus. Therefore, emphasis was given in this sector and tourism recovered in the 1980s. By the end of 1980s tourism became the key driver of economic growth for Cyprus. Income receipts were 20% of GDP and arrivals of visitors were 2.5 times the population (Adamou and Clerides, 2009). The tourism sector was affected again in 1991 due to the Gulf War, and it improved in 2000. Cyprus has been an active member of the World Tourism Organization (UNWTO) since the 1970s (Sola, 2008). The vision of CTO is to make Cyprus a qualitative tourist destination that will satisfy the visitor with various interests and quests and ensure the continuous improvement of the quality of life of the locals (CTO, 2010). …