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Cyprus Trade, Restaurants, and Hotels
Since the late 1970s, the largest and most dynamic
component of
the service sector has been that of wholesale and retail
trade,
restaurants and hotels (tourism). It grew at double-digit
rates
between 1979 and 1988, except for 1986 (see
table 15,
Appendix).
Its contribution to the GDP in current terms quadrupled
between
1979 and 1988. By the late 1980s, with about 50,000
workers, it had
also become the largest source of employment.
Tourism gained importance in this subsector during the
1980s,
but had not overtaken trade. Trade (wholesale and retail)
contributed C£76.7 million, in current terms, to GDP in
1979 (79.56
percent of the sector) and C£217.3 million (55.4 percent)
in 1988.
Restaurants and hotels (tourism) contributed C£19.7
million in 1979
(20.43 percent of the total sector) and C£174.6 million
(44.55
percent) in 1988. The value added to GDP by trade nearly
tripled in
current prices between 1979 and 1988, and that of
restaurants and
hotels (tourism) increased about nine times.
Tourism was seriously disrupted by the Turkish invasion
of
1974. Only 47,000 tourists came to the island in 1975,
down from
264,000 in 1973. However, under the influence of the
emergency
economic action plans of 1976-78, 1979-81, and 1982-86,
earnings
from tourism increased at least 20 percent for eleven
straight
years, and the number of tourists who visited the Republic
of
Cyprus went from 165,000 in 1976 to 1,376,000 in 1989.
Foreign
currency earnings from tourism amounted to almost C£500
million in
1989. Earnings were so significant that tourism was a
greater
source of foreign exchange than the export of domestic
goods from
1986 through 1989.
Most of the tourists who came to the
government-controlled
areas were middle-income Europeans. For many years,
British
visitors were the most numerous and made up about
one-third of the
total. Swedes were the second largest group in the late
1980s,
closely followed by Germans. Most tourists came for stays
of about
ten days and arrived during the warm months, despite
efforts by the
Cyprus Tourism Organisation (CTO) to achieve a more even
seasonal
distribution of visits. In the late 1980s, the CTO began
to be
successful in increasing conference tourism as a step
toward this
goal.
By the late 1980s, efforts were underway to raise the
quality
rather than quantity of tourism because the south's
ability to
receive more tourists had reached a saturation point. A
one-year
ban on licenses for new hotels in coastal areas was
announced in
March 1989 to check unplanned development. The volume of
demand had
surpassed the available infrastructure to support it, with
resulting problems of traffic congestion, water shortages,
and
inadequate sewerage capacity.
Future growth was to depend on attracting wealthier
tourists,
who would spend more money during their stays. This aim
was to be
accomplished by turning away from simple sun-and-sea
tourism and
developing higher quality hotels with facilities such as
golf
courses, marinas for yachting, and casinos. Emphasis was
also to be
placed on building mountain resorts and developing the
island's
archaeological sites for sightseeing.
Data as of January 1991
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