Cyprus set to suffer a €600m blow due to Russian airspace ban
The far-reaching consequences of the sanctions imposed on Russia are gradually becoming clearer, with many other economies also being impacted by the geopolitical climate in Europe.
As Russian tourists find themselves running out of options for holiday destinations due to the airspace ban, countries like Cyprus are also facing financial implications.
Impact on tourism
Cyprus is expected to lose around €600 million this year as a consequence of the Russia-Ukraine conflict. Nearly 14% of the Mediterranean island nation’s GDP is generated from tourism, making the country quite dependent on the industry.
And Russians and Ukrainians account for a significant chunk of tourists to the country – one-fifth in 2019. This year, Russian arrivals are almost non-existent.
The country’s proximity to Russia (it’s a short flight away), sunny weather, and sandy beaches have always been a big draw for travelers from Russia. But with the EU banning all Russian flights, tourists from the country are finding it difficult to travel abroad.
Such was the inflow of tourists from Russia that the ban directly affected many small businesses and travel agencies in Cyprus. Euronews quotes Haris Loizides, board president of the Cyprus Hotel Association, as saying,
“There are hotels, especially in the Famagusta area, Ayia Napa and Protaras which are suffering mostly because they had the extensive contracts with tour operators from Russia. And they are facing huge difficulties at the moment.”
Solution
Business owners in Cyprus are now trying to find other ways to get more Russian tourists into the country. Loizides says that they are maintaining close cooperation with Russian clients and exploring possibilities of getting them into Cyprus through points in Europe or outside Europe, which are not affected by the sanctions. Some of these countries include Serbia, Georgia, and Israel.
Other countries in the region, which benefited from Russian tourists include Turkey and Egypt. They are also expecting revenue loss this year due to the ongoing war in Ukraine. In fact, data from Statista reveals that European countries expect three million fewer Russian arrivals in the upcoming months, based on the number of seats booked for inbound flights between February and August 2022.
However, not all is lost, as Cyprus’ Deputy Minister for Tourism, Savvas Perdios still expects over 2 million tourists this year, with other countries, including the UK and Germany, expected to provide a steady flow of travelers.
S7 Airlines, which was close to launching its low-cost subsidiary next month, has also put those plans on hold for the foreseeable future due to the current aviation climate. It seems like the country is staring at a long year ahead.
