Cyprus Steps Up Infrastructure Projects to Fuel Tourism Growth

Cyprus’s government is backing plans to build more golf courses and marinas and develop a new casino resort in a bid to secure continued growth in tourism, which is set to break arrival and revenue records this year, Minister Georgios Lakkotrypis said in an interview.

The Cypriot economy returned to growth in 2015 after three years of recession, mainly due the tourism industry. Cyprus has transformed itself from the sick patient of the euro zone in 2013, when a haircut on deposits was imposed, to a poster child for economic adjustment. Output expanded 2.7 percent in the first quarter, mainly on increased contributions from hotels and restaurants.

“We’re having, and will have, a fantastic year,” the tourism minister said in Nicosia, citing a recovery in Russian arrivals, rising numbers of U.K. visitors following initiatives targeted at Cyprus’s largest tourist-source market and the Mediterranean island’s status as a safe destination. “We need to make sure this growth is sustainable,” he said.

Tourist arrivals rose almost 22 percent in the four months of the year, while sector revenue increased 19 percent in the first quarter, showing significant growth in the winter months, Lakkotrypis said. Many Russian tour operators are seeking alternative destinations to other vacation spots in the region.

Setting Cyprus Apart

“We’re moving ahead with major infrastructure projects as part of a 10-year strategic plan that will differentiate us from the competition, including new golf courses, marinas and an integrated casino resort,” Lakkotrypis said.

Cyprus extended the deadline to submit binding proposals to build and manage the casino resort, originally due next month, to October, following a request from two of the three bidding groups, Bloomberry Resorts Corp., Hard Rock Resort Cyprus Consortium and NagaCorp Ltd. Lakkotrypis said he still plans to award the contract near the end of the year.

Construction of a new luxury marina with capacity to berth 600 vessels of as long as 60 meters on the island’s southeast coast is expected to begin in July at the latest, Lakkotrypis said. The project, including villas, a 6-star hotel and retail outlets, is backed by Egyptian billionaire Naguib Sawiris.

A 12 percent rise in air traffic in the first four months of the year also signals renewed, sustainable interest in tourism on the island, the minister said, pointing to the launch of new local airlines like low-cost operator Cobalt, scheduled to begin operations this month, and the return of carriers like Italy’s Alitalia, which resumed flights between Rome and Larnaca on June 8 after a six-year absence.

To contact the reporters on this story: Paul Tugwell in Athens at ptugwell1@bloomberg.net, Georgios Georgiou in Nicosia at ggeorgiou5@bloomberg.net, Jerrold Colten in Milan at jcolten@bloomberg.net. To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net, Anabela Reis