Tourism-related activities generate approximately 20 percent of the Republic of Cyprus (ROC) GDP. In the three years prior to COVID-19, the ROC experienced consecutive record-setting arrivals reaching four million tourists per year. COVID-19 travel restrictions reduced tourist arrivals by approximately 90 percent in 2020. However, arrivals improved in 2021 and have shown a drastic increase to date for 2022 based on the Cyprus statistical service numbers. Although tourist arrivals have not yet returned to pre-COVID-19 numbers, they are showing steady year-on-year growth. Domestic hospitality spending replaced some of the lost income, and several significant tourism investments are progressing. Projects involving U.S. hotel brands that are new to the Cyprus market are expected to proceed as planned, some through U.S. investment funds. Tourism infrastructure is being upgraded, and the Deputy Ministry of Tourism is re-evaluating the country’s tourism strategy to pursue new markets. Other projects that continue include Europe’s largest casino resort, due to open in the third quarter of 2022, and the Larnaca marina and port redevelopment (a $1.2 billion investment) following the Limassol marina mixed-use development. Cypriot tourism has earned numerous awards, including a listing among Global Top 100 Sustainable Destinations. Although primarily a “sun and sea” destination, Cypriot officials are endeavoring to diversify investment in new sectors such as medical, sports, or wellness tourism. Cyprus offers many advantages in this area, including a strategic location, expanding air connectivity, mild Mediterranean climate, existing high-standard hospitals, clinics with internationally educated doctors, and near-universal use of the English language.
Leading Sub-Sectors and Opportunities
Construction of Greenfield Tourism Projects:
In addition to acquiring existing tourism infrastructure, investors should consider prospects in constructing large, Greenfield tourism projects in the following sub-sectors: seafront tourist developments, theme parks, retirement and rehabilitation centers, athletic tourism projects, medical and wellness tourism, agrotourism, cultural and religious tourism, wedding destination tourism, convention events, and golf courses combined with residential developments. Non-EU entities interested in constructing large Greenfield development projects in Cyprus must be properly licensed in their country of origin.