Cyprus tourist arrivals dive amid recession

Cyprus tourist arrivals plunged 10.8 per cent during the first six months of this year, official figures showed, signalling a tough year ahead for the key sector.

The recession in Europe is having a knock-on effect on the Mediterranean holiday island's tourism market with the rate of decrease in arrivals accelerating in June.

Between January and June 883,002 tourist arrivals were recorded, compared with 989,851 over the same period last year.

In June alone arrivals were 260,931 as against 307,237 in June 2008 - a sizable year-on-year decline of 15.1 per cent.

There was a hefty 19.5 per cent decline in arrivals from Britain, the island's largest holiday market, a similar decrease of 18.8 per cent from Russia and a lower 10.8 per cent dip from Sweden in June.

The government estimates that arrivals will be down 10 per cent in 2009. To help ease the crisis, it is urging Cypriots to holiday at home by offering subsidised hotel stays for lower income groups.

Twelve per cent fewer Cypriots also travelled abroad in May, although some industry experts attribute this partly to fears about swine flu.

Most tourists to Cyprus come from recession-hit European Union countries.

Total tourism receipts for 2008 dropped 3.5 per cent to €1.79 billion from €1.85 billion in 2007.

Tourism contributes around 12 percent to the island's GDP.

Bumper tourism revenues helped the island achieve GDP growth of 4.4 per cent in 2007 and 3.7 per cent in 2008, and hotel bookings are said to be around 20 per cent down for this summer.

Because of concerns that the global financial crisis will mean lower tourism revenues the finance ministry has revised its GDP growth forecast for this year to around one per cent.

The European Commission estimates GDP growth in Cyprus to be a modest 0.3 per cent, still making it the only eurozone country to register positive growth in 2009.