growing tourism in cyprus
DESCRIPTION
Cyprus' economy depends on tourism and holidays, but volumes and values are falling. This presentation summarises the problems with tourism and holidays in Cyprus and recommends strategies to get visitor numbers growing and grow the adventure and discovery holiday sectors.TRANSCRIPT
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© Mike McCormac 2011
GROWING TOURISM IN CYPRUS
TOURISM HAS CHANGED. SO MUST CYPRUS
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© Mike McCormac 2011
• Summary
• The old days aren’t coming back
• A new approach is needed
• That’s based on today’s market
realities
• This is an analysis of:
• The facts
• The opportunity
• What needs to happen
• Contents
• Situation
• Opportunities
• Strategies
• Appendices
INTRODUCTION
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© Mike McCormac 2011
SITUATION
TOURISM HAS CHANGED. SO MUST CYPRUS
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© Mike McCormac 2011
• Actual tourist numbers to
Cyprus have fallen 33%
between 2000 and 20101
• Worldwide tourism has
grown c.25% in the same
period2
• That means in market terms
Cyprus tourism has fallen
47% in the last ten years
10 YEARS OF DECLINING TOURIST NUMBERS
0
500
1,000
1,500
2,000
2,500
3,000
Nu
mb
ers
of
visi
tors
on
ho
liday
(,0
00
)
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© Mike McCormac 2011
• Actual tourist revenue in
Cyprus has fallen 24%
between 2000 and 20101
• In the same period inflation
in Cyprus has been 30%1
• That means in real terms
Cyprus tourist revenue has
fallen 44% in the last ten
years
10 YEARS OF DECLINING TOURISM REVENUE
0
500
1000
1500
2000
Tou
rism
Re
ven
ue
(€
m)
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© Mike McCormac 2011
• In the period 2001 to 2010:
• Package holidays declined from
75% to 54% of the total
• Individual travel grew from 25%
to 46% of the total
PACKAGES DECLINE, INDIVIDUAL TRAVEL GROWS
0%
10%
20%
30%
40%
50%
60%
70%
80%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Pe
ren
tage
of
tota
l
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© Mike McCormac 2011
• Self packaging has peaked
• Customers don’t have time
to organise it themselves
• They want their holiday to
be easy
• Factors:
• 30% increase in the importance
of comfort
• 40% increase in the importance
of security (bonded tour
operator)
• 40% increase in the importance
of destination knowledge
DECLINE IN SELF PACKAGING
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© Mike McCormac 2011
• Between 2000 and 2010:
• UK visitors have declined from
64% to 58%
• German visitors have declined
from 11% to 8%
• Russian visitors have increased
from 6% to 13%
2000 2010
UK 64% 58%
Germany 11% 8%
Greece 5% 7%
Switzerland 4% 2%
Norway 3% 4%
Russia 6% 13%
Sweden 6% 6%
France 2% 2%
UK REMAINS THE PRIMARY SOURCE
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© Mike McCormac 2011
• Negative
• Expensive
• Poor quality
• Downmarket
• Rip off Cyprus
• Untidy
• Positive
• Weather
• Sea
• Countryside
• English speaking
• Weddings
PERCEPTIONS OF CYPRUS
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© Mike McCormac 2011
IMPACT OF SOCIAL MEDIA
• Quotes from Total Media Social Travel Report:
• “Almost 70% of consumers use the internet to book their holidays, compared to 23% by phone and just 8% with travel agents”
• “Consumers aged 35-44 were found to be most likely (74%) to book online”
• “Price (80%) was cited as the main reason for using the internet along with information (53%) and convenience (50%)”
• “Online reviews from the likes of TripAdvisor are now more influential than brochures, advertising, travel supplements and agents”
• “People trust complete strangers over recommendations from the travel industry”
• “The holiday industry is facing a social media revolution”
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© Mike McCormac 2011
• The web today is about
social networking
• Static websites are not good
enough
• People browsing the web
want to be involved
• User reviews like Tripadvisor
are trusted more than
commercial sites
• YouTube
• Yahoo
• Blogger
• Baidu
• Windows Live
• Wikipedia
• QQ.com
WORLD’S TOP 10 WEB SITES IN ORDER
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© Mike McCormac 2011
• More than 500 million users. More popular than Google in USA
• YouTube
• Over 500 million visits every month. 92 billion page views each month
• 200 million users. 110 million tweets daily
WHY SOCIAL MEDIA CANNOT BE IGNORED
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© Mike McCormac 2011
• One in three UK holidaymakers use Tripadvisor for information.
• Of those, one third change their plans as a result
• Tripadvisor consistent Cyprus themes:
• ‘Expensive’
• ‘Rip off’
• ‘Scams’
• ‘Ghost town’
IMPACT OF TRIPADVISOR
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• Major tour operators
seeking to increase their
share of revenue
• Trend to all inclusive will
reduce revenue in Cyprus
and damage tertiary
businesses
IMPACT OF ALL INCLUSIVE
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© Mike McCormac 2011
• 1 in 4 UK couples now marry
abroad
• 27% increase in British
couples marrying abroad
between 2005 and 20102
• Up from 45,000 in 2005 to
just over 57,000 in 2010
• Cyprus is in the top ten of
destinations for UK
weddings abroad
• But indications are Cyprus’
share is slipping
WEDDINGS HAVE BEEN A SUCCESS STORY
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© Mike McCormac 2011
• Underfunded
• 20% budget reduction in 2011
• High costs
• High administration costs as a
percentage of budget
• Cost base growing
• Needs
• Budget growth
• Administration and operating
cost reduction
CYPRUS TOURISM ORGANISATION
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© Mike McCormac 2011
• Example – golf
• Why do Elea and Secret
Valley work?
• Focus on quality activity product
• Why do Secret Valley and
Minthis Hills/Tsada fail?
• Focus on property development
• Activity product secondary
IMPLEMENTATION MATTERS
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© Mike McCormac 2011
CONCLUSIONS
• Radical action needs to be taken to reposition and promote the Cyprus’ tourism product because:
• Today’s customers want more than sun, sea and sand
• Volumes and revenues will continue to decline
• Traditional packaged holidays will decline faster
• Despite optimism about Russia, the UK remains the primary market
• Cyprus’ current tourism product is expensive and sub-standard
• The internet is the primary means to research and book holidays
• ‘All inclusive’ will further damage local businesses
• Weddings have been a success story but quality needs to improve
• Independent travel is a growing opportunity
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© Mike McCormac 2011
OPPORTUNITIES
TOURISM HAS CHANGED. SO MUST CYPRUS
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© Mike McCormac 2011
• What are Cyprus’ assets?
• Weather
• Sea
• Mountains
• Long season
• Open access to countryside
• What are Cyprus’ liabilities?
• Perceptions:
• High cost
• ‘Rip off’
• Down market
• Beaches not as good as
competing destinations
• Long flight
• Untidy
BACK TO BASICS
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© Mike McCormac 2011
• Cyprus’ climate makes a long
season possible
• Shoulder months are a
growth opportunity
• March, April
• October, November
LENGTHEN THE SEASON
0%
2%
4%
6%
8%
10%
12%
14%
16%
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
De
c
Visitors by Month (%)
2009 2010
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© Mike McCormac 2011
• Top five growth sectors.
Three fit Cyprus’ strengths
• Environmentally friendly holiday
• Adventure holiday
• Nature and wildlife holiday
• Discovery holiday
• Special interest holiday
FASTEST GROWING SECTORS
0% 100% 200% 300%
Special interest holiday
Discovery holiday
Nature and wildlife holiday
Adventure holiday
Environmentally friendly
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© Mike McCormac 2011
• The Adventure Travel Trade
Association defines
adventure travel as:
• Any tourist activity including
two of the following three
components:
• A physical activity
• A cultural exchange
• Interaction or engagement with
nature
ADVENTURE HOLIDAYS
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© Mike McCormac 2011
• Special interest
• Culture
• Nature
• Wildlife – especially bird watching
• Walking and hiking
• Cycling
• Mind, body, spirit – and health
• Photography
• Wine/vineyard
• Pottery
• Active adventure
• Mountaineering
• Off road cycling
• Sailing
• Water sports
• Diving
• Off road driving
• Horse riding
ADVENTURE TRAVEL INCLUDES
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• Statistics
• 400,000 passengers a year
• £180m per annum
• Forecast to grow 70% over next
three years
• Average spend increased 21%
from £987 in 2006 to £1,198 in
2009
• Largest operators
• Tour operators take 50% of the
market
• The Adventure Company (TUI)
• Explore
• Exodus (TUI)
• Geckos
• Headwater
• …
UK OVERSEAS ADVENTURE TRAVEL MARKET4
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© Mike McCormac 2011
• Demographic groups:
• Younger people in the 16-34 age
group
• Single professionals, especially
females
• Affluent active families
• Inquisitive 50+ males and
females
• Typical customer profile:
• Confident, well travelled
consumers wanting more than
sun, sea and sand
• Demanding an authentic ‘off the
beaten track’ experience
• Active
WHO TAKES ADVENTURE HOLIDAYS?
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© Mike McCormac 2011
• Rural tourism
• Agrotourism
• Nautical tourism
• Marinas, beaches, cruises
• Casinos
• Cultural tourism
• Cultural and artistic events
• Wine Routes
• Religious tourism
• Nature tourism
• Nature trails
• Sports tourism
• Football, cycling, golf
• Health
• Conference and incentive
• Weddings and honeymoons
CTO SPECIAL INTEREST TOURISM INCLUDES…
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• Some solutions
• Group similar activities
• Run activities to a calendar
• For example
• A week’s activities including
mountain biking, climbing and
hiking
• A week’s activities staying in an
Agrotourism location and
exploring vineyards
EACH ACTIVITY IS A SMALL MARKET OPPORTUNITY
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© Mike McCormac 2011
SUMMARY OF OPPORTUNITIES
• Cyprus is potentially a year round destination – for the right
sort of holidays
• Cyprus can be positioned for:
• Adventure holidays
• Nature and wildlife holidays
• Special interest holidays
• The market for these opportunities is growing
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© Mike McCormac 2011
STRATEGIES
TOURISM HAS CHANGED. SO MUST CYPRUS
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© Mike McCormac 2011
TWO CORE STRATEGIES FOR CHANGE
• Communication
• Update communication and promotion channels to fully capitalise on the
internet/social media opportunity
• Focus on the growth adventure sectors
• Reposition from ‘Love Cyprus’ to ‘Fun Cyprus’
• Review the infrastructure
• Active promotion
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© Mike McCormac 2011
• Customers believe social
media
• Advertising investment
is being negated by the
social media effect
• It’s like a big hole in the
bottom of the promotion
bucket
PLUG THE HOLE IN THE ADVERTISING BUCKET
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© Mike McCormac 2011
• Communicate differently:
• The target market is highly
internet aware
• Forums
• Live chat
• Decrease conference spend,
increase internet spend
• With better information:
• Customers want lively, engaging
information
• Create a virtual ‘try before you
buy’ using:
• Videos
• Google Earth
• Customer testimonials and
photos
COMMUNICATION IS THE FIRST THING TO CHANGE
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ADVENTURE HOLIDAY REQUIREMENTS
• Access to the countryside or coastline
• Facilities for the activity
• Activity providers such as accredited activity operators,
outdoor education centres, schools and freelance instructors
• Accommodation catering for the needs of participants
• Simple, visible booking services for lessons, courses and taster
sessions
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INFORMATION REQUIREMENTS
• The Internet is the primary source of information for adventure activity takers
• Participants want pre-visit activity information
• Some people can be influenced by at-destination information on local activity providers
• Sports governing bodies and associations are a key source of information for participants
• Some activities will require pre-visit and at-destination information including:
• Access and parking arrangements
• Equipment hire, repair and sales
• Times, charges, contact information
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© Mike McCormac 2011
DESTINATION MANAGEMENT OPPORTUNITIES
• Development of specific activity focussed marketing
• Coverage of adventure activities on websites with specific information
• Key marketing messages: trying out, learning, or pursuing an adventure sport
• Encouraging and supporting the development of:
• Local networks of operators to provide a basis for networking and business referrals
• Collaborative marketing initiatives
• Promotion of environmental and quality messages to operators
• Business support and training into the sector
• Facilitating local adventure activities information services
• Creating local booking services for adventure activity courses and sessions
• Promotion of appropriate adventure sports events and competitions
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© Mike McCormac 2011
ACCOMMODATION OPPORTUNITIES
• Development of activity specific accommodation
• Differentiation by providing activity specific facilities
• Providing local information
• Target individuals looking for activities in specialist magazines
• Develop working relationships with local activity operators
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SUMMARY OF STRATEGIES REQUIRED
• Move the message from ‘sun’ to ‘sun and fun’
• Need a big focus on the internet –content and social media
• Analyse the special interest sub-sectors to get best fit between:
• Current volume
• Potential, growth
• Cyprus’ attributes
• Work on improving product quality in the target sub-sectors
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© Mike McCormac 2011
• Mike McCormac is a sales
and marketing consultant
specialising in the travel and
tourism sector and living in
Cyprus.
• Contact Mike at:
• +357 99 860725
• www.salessuccessandmore.com
ABOUT THE AUTHOR
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APPENDICES
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© Mike McCormac 2011
SOURCES
• 1: Republic of Cyprus Statistical Service
• 2: Mintel
• 3: Total Media Social Travel Report
• 4: YouGov