Chrysaimili Psilogeni: The major problems of the sector remain unsolved – Billions of dollars in revenue lost
Under the existing conditions it will be a relatively satisfactory year for tourism, but obviously it could be better.
By Panagiotis Rougalas
The general director of STEK, Chrysaimili Psilogeni, is ringing the bell for the problems that have remained unsolved for many years in tourism, stressing that the revenues of the last decades show losses of billions of euros.
In her interview with “K”, the general director of STEK points out that arrivals alone cannot be a criterion for whether a tourist year was ultimately good, highlights the issue of seasonality, and explains that short-term leases damage tourism product of Cyprus. Ms. Psilogeni estimates that, given the circumstances, this year will be a relatively satisfactory year, but obviously it could be even better.
– In a recent press conference, you presented some worrying facts in relation to the course of Cypriot tourism. Does it bother you the most?
– With the opportunity you are giving me, let me clarify that our goal is not to target anyone, let alone the Ministry of Tourism, with which we have an excellent relationship. After all, in our presentation we referred to data not about what applies today but over time since 2001. You realize that for a period of 23 years, any responsibility does not concern just one person or an institution, but many, not excluding ourselves.
As a general conclusion, what worries us the most is the saturation presented by our tourism product as reflected in the long-term revenues of the last decades, which, analyzing them, demonstrate losses of billions. We are also troubled by the fact that the major problems of the sector, quality, seasonality, dependence on specific markets, have remained the same for many years.
– However, the country's tourism product has shown particular resilience despite the adversities of the last years mainly.
– We do not argue or zero. At the same time, however, we should not be complacent either. We would be remiss if we did not say that we are troubled by the fact that in recent years we have lost billions in revenue if we take inflation into account. We would be doing ourselves an injustice if we said that we are not concerned about the dependence on certain markets, with all that this entails for a destination, having fresh memories of the loss of our second largest market, Russia. Or that the average gross occupancy of 3, 4 and 5 star hotels in 2023 (56.6%) was lower than in 2001 (58.5%). We're not pointing fingers, we're just pointing out the big perennial problems in the field, which should concern us all and take action as soon as possible to address them.
The 'issue' seasonality
– You mentioned the issue of seasonality earlier. Is it as intense as it was 20 years ago?
– Maybe it will be even stronger today. In 2002, in the summer season (April-October) we had 81.5% of arrivals and 83.3% of the entire year's revenue in these months alone, and in 2023, these percentages have increased to 82.9% and 88 % respectively. They were at similar levels in both 2022 and 2019, i.e. before the pandemic. Such strong seasonality creates significant structural problems related to service quality, labor issues, infrastructure issues and so on.
At the same time, the danger of climate change is no longer knocking on our door, it has entered our lives. Already in recent years – and especially this year – we have seen reports in international Media that discourage tourists from visiting countries in southern and southeastern Europe due to high temperatures. Given that the temperature will continue to rise, despite the efforts being made, what will be the fate of a destination that largely attracts tourists during the months when the temperatures will be, for many, unbearable? At a time when, due to the comparatively mild winter climate, our country can easily be promoted as an ideal destination for all months of the year.
– This year will finally be good for Cypriot tourism. ;
– Good is a very general word. We are certainly not zeroing in, nor are we squeamish. Under the circumstances it will be a relatively satisfactory year, but obviously it could be better. You know, after the pandemic we have entered the era of hyper-tourism for good. We see in more and more countries and regions there are protests about the very large flows of tourists and the problems that are created for the local residents. Therefore, arrivals alone cannot be a criterion for whether a tourism year was ultimately good. Tourists are definitely coming, but beyond that we have to look at many other factors before deciding how successful a year is or much longer to decide if our tourism product is successful and long-term sustainable. In the modern era, all sectors rely on the collection and analysis of data to reach conclusions and build their strategy. It's something we're lagging behind on and we should put a lot of emphasis on it as soon as possible so that whatever decisions we make are scientifically documented.
Uneven competition between hotels and Airbnb
– As an Association, you stated many times your opposition to the short-term rental phenomenon. Given that this is a trend that tourists are looking for, do you think it is wise not to provide it as a tourist destination?
– We realize, understand and accept that this is a particularly popular trend among tourists. We never called for a complete ban on short-term rentals. On the other hand, it would not be an exaggeration to say that we were too late to regulate this particular issue and even today we are not doing it to the extent that we should. As a result, hotels have for years faced unequal competition at all levels (registered self-catering accommodation currently has around 38% of the beds offered by hotel establishments, while the same amount is estimated to be the beds in unlicensed self-catering accommodation), the state had losses of tens of millions of euros over the years, and the country's tourism reputation was at risk due to insufficient operational control. At the same time, strong social problems have also been created, since the reduction in the supply of long-term rentals has driven up rent prices.
Our recommendations are specific and can be summarized as follows:
• The rental of property for a short period is allowed only for a specific period of time, which does not exceed 90 days per year.
• In the city centers where the problem of finding permanent housing is more intense, to seriously consider the possibility of a complete ban on short-term rental properties. the specific accommodations.
• To collect statistical data from the platforms, so that there is a real picture of tourist overnight stays on the island and to verify the correct declaration of income to the Tax Department.
• To approve the short-term apartment lease
