Cypriot tourism is recovering despite sanctions-hit Russia

Next to the sparkling waters of the Mediterranean Sea in the Cypriot resort of Ayia Napa, bars are hopping with foam dancing parties as tourist numbers recover after two tough years of the pandemic.

But one key nationality is effectively absent: Russian visitors, as the once lucrative market has been hit by European Union sanctions imposed after Moscow invaded Ukraine.

“This year we expected 800,000 Russian tourists,” said Haris Loizides, head of the Cyprus Hotel Association.

The Russian market “was wiped out from one day to the next,” said Christos Angelides, chairman of the Pancyprian Association of Hotel Managers. “Nobody was prepared for this big change.”

Key sector tourism, which contributed 2.68 billion euros ($2.72 billion) in 2019, 15 percent of GDP, is still grappling with the cost of the disastrous years of Covid travel chaos.

In 2019, before the start of the Covid-19 pandemic, a fifth of tourists were Russians – 782,000 out of 3.9 million – making it the holiday island’s second largest market after Britain.

Last year, despite strict Covid travel restrictions, that proportion rose to more than 25 percent, with arrivals from Russia totaling nearly 520,000 out of 1.93 million.

Operators had hoped that Russian numbers would return to pre-pandemic levels this summer.

Around 18,000 Russians live in Cyprus, many of them in the coastal city of Limassol – dubbed by some “Moscow on the Mediterranean”.

But while EU sanctions against Russia continue and bloodshed on Ukraine’s battlefields continues, only 17,000 Russian tourists came to Cyprus between January and June.

“Our hotel is doing well, but others — who have had 100 percent Russian customers — are not,” said Angelides, who is also the manager of the Napa Mermaid Hotel.

Nicosia and Moscow have close political and cultural ties, but when Russia sent troops to Ukraine, the Cypriot parliament unanimously passed a resolution condemning the invasion.

Cyprus, the EU’s easternmost member, backed the bloc’s actions towards Moscow, including a flight ban and sanctions excluding some Russian banks from the SWIFT financial system.

The tourism ministry says fewer Russian visitors could mean about $600 million in potential lost revenue.

Overall, tourist arrivals in Cyprus are recovering thanks to strong demand in other key markets following the lifting of coronavirus restrictions.

From January to June, Cyprus welcomed 1.2 million visitors, almost five times the previous year, and the white sandy beaches of Ayia Napa are crowded with sun-seekers and party-goers.

But that’s still 25 percent less than the same period in 2019, when 1.63 million tourists came to Cyprus.

“We limited the damage a bit, but it’s impossible to replace this huge number of customers,” Angelides added.

In the first half of this year, British tourists accounted for nearly two-fifths of visitors, followed by Israelis who accounted for seven percent of visitors, then Poland, Germany and Greece.

“There have been many attempts by multiple sectors to encourage tourists from other markets, such as the German, Polish, Italian and French markets,” said Charis Papacharalambous, spokesman for the Association of Cyprus Travel Agents (ACTA).

But it is still “very difficult to fill the huge void” left by Russian tourists, he added, with industry experts fearing the impact could be worse as many Russians used to prefer to visit later in the year.

For Loizides of the island’s hotel association, the war in Ukraine poses another problem.

Soaring global fuel costs triggered by the conflict have pushed up electricity prices.

As tourists turn the air conditioning on full blast to counter Cyprus’ sweltering heat, hotels are struggling with “astronomical bills,” Loizides said.

“The EU must remedy this and help businesses, especially at a time when inflation is raging,” he added.