TOURISM experts said yesterday it was too early to draw conclusions about how the industry would be affected by the escalating crisis in the Middle East, while businesses expressed fears that rising oil prices would contribute to inflation.
“We must not forget Cyprus has established the reputation of a safe destination, and the fact that it’s in the Middle East is irrelevant, because it is still considered one of the safest, traditional tourism destinations, something that will help us counter this situation,” said Alecos Oroundiotis, acting chairman of the Cyprus Tourism Organisation (CTO) board.
He said that although military operations in neighbouring countries was an unwelcome development, Cyprus’ tourism market had for the time being remained unaffected by it and could even benefit.
“But we do not cease to have some concerns. Cyprus is very near Lebanon and the events in Lebanon might at some stage, either positively or negatively, affect Cyprus’ tourist development. At the moment, we don’t feel there is any danger of it affecting us, but it’s still too early to draw conclusions.”
In fact, Oroundiotis said it was too early to do anything except wait and see how developments would unfold. He said if the crisis came to an end soon, then the island would suffer no consequences, but that if violence increased “things will be different”.
Association of Cyprus Travel Agents (ACTA) chairman Akis Kelepeshis also said drawing conclusions was premature, but admitted cruises from Cyprus to the eastern Mediterranean might be affected.
Specifically, he said it was possible the number of tourists who used Cyprus as a base for travelling to Israel, Syria and Lebanon by cruise ship might decrease slightly.
Kelepeshis said: “As a first evaluation it could perhaps affect the arrivals of such tourists that come here… But it’s still too early. We have to see how things develop. We might have some tourists coming here instead of Lebanon. There will pluses and minuses and those will only become apparent as the situation develops.”
Commerce Minister Antonis Michaelides said yesterday the situation in the Middle East would most certainly have consequences on the island’s economy.
Speaking to reporters following a meeting with the Cyprus Chamber of Commerce and Industry (KEVE), Michaelides made it clear that the government was keeping a close eye on the situation and would show its “human face” when deemed absolutely necessary, doing everything it could to minimise the negative impact on consumers.
He was referring to public concern over oil prices, and explained that the government’s hands were tied due to a European Union ban on state subsidies for energy products.
“The European Union is not in favour of government measures to reduce fuel product prices in any way, because these kinds of state interventions do not cure the problem, instead it encourages the over consumption of energy, particularly electricity.”
Michaelides added: “And if all these [petrol products] are subsidised, sufficient energy conscientiousness will not be developed, which to a great extent is what needs to be developed so as to deal with this huge problem.”
The minister said the government had a human face and was prepared to show it, but not at the expense of its primary goals.
“We cannot deter from our main goal, which entering the eurozone, by throwing money around freely,” he said.
KEVE representatives added that inflation trends due to oil price increases were dangerous and, that Cyprus not only had to fulfil its public deficit criteria, but by next year also had to meet its inflation criteria.
“So the government policy that aims to hold down the inflation increases will have to be supported and I would say that in this framework, the government’s position to freeze hiring in the public sector is positive, because it will hold down these inflationary tendencies,” a KEVE official said.
