Cyprus revenue plunges - July 29, 2009

Revenue in Cyprus's vital tourism sector plummeted in the first half of this year, signalling a rocky year ahead for the Mediterranean island's economy, official figures showed.

Income from tourism, which makes up 12 per cent of gross domestic product, fell 15.8 per cent to an estimated €565.8 million in the six months to June from €671.9 million a year ago.

Last month alone the slide was 23.6 per cent - the steepest monthly drop this year - with revenue from holidaymakers down to €175.4 million from 229.6 million in the same month last year.

Tourism income for last year as a whole fell 3.5 per cent to €1.79 billion from 1.85 billion in 2007.

Average daily spending by tourists last month was €68.4 and the average stay was 9.8 days.

The biggest spenders were Irish visitors, splashing out €116.8 a day while Britons were the most frugal, spending only €57.2 a day on average.

The drop in revenue is coupled with a 10.8 per cent decrease in tourist arrivals for the first six months of the year.

The government projects a 10 per cent drop in tourism arrivals this year and Cypriots are being urged to holiday at home this summer to ease the negative impact.

Bumper spending by holidaymakers helped the island achieve GDP growth of 4.4 per cent in 2007, easing to 3.7 per cent last year.

The finance ministry has further trimmed its GDP growth estimate to around one per cent for this year mainly due to a deflated tourism sector and stagnant property market.

But Cyprus still expects to be the only eurozone country to have positive GDP growth this year.