Cyprus ranks the lowest among competitor markets in terms of price competitiveness, according to KPMG’s Cyprus Hospitality Report which was recently released aiming to provide an overview of the hospitality market performance.
The report shows that the average daily stay in Cyprus costs €138, while in Istanbul it is €77, in Lisbon €114 and in Athens €120. Madrid is slightly more expensive than Cyprus with the average daily stay costing €139, but Rome’s is even higher at €147.
At the same time, Cyprus has the fourth highest net bed occupancy rate versus direct competition with 73%, compared with Rome’s 70% and Istanbul’s 69%. Lisbon and Athens are the two cities with the highest net bed occupancy, reaching 78% and 77%, respectively. In Madrid the average net bed occupancy is 75%.
As for investment in new luxury hotels – 3 stars and higher- over the past 10 years, this has greatly benefited Paphos and Famagusta districts with the number of available beds increasing by 11% and 16%, respectively. These two areas contributed with more than 90% of the total increase in available beds.
However, despite the rising demand in tourism and need for additional bed capacity over the past decade, Nicosia and Larnaca performed poorly in terms of quality, according to the report.
In addition, budget hotels of one and two stars have increased by 89%, while luxury beds available decreased by 10%. Limassol is the only city recording a rising number of high-end, 4 to 5-star hotels, and a decline in one to two-star hotels.
With a 7.8% year on year increase in tourist arrivals, 2018 was the most successful year recorded for the Cyprus tourism industry, with the number of tourist arrivals reaching 3.9 million. Since 2014, tourist arrivals have risen for five consecutive years, reaching peak levels in 2018.
In revenue terms, tourism accounted for the equivalent of 13.1% of nominal GDP in 2018, rising by a modest 2.7% to €2.7 billion, according to the prior year.