Measures to boost tourism

The cabinet has approved nine incentive schemes to boost the coronavirus-stricken tourism sector which welcomed three million fewer tourists last year.

Pandemic lockdowns and travel restrictions saw Cyprus tourist arrivals drop by 84.1% in 2020.

Announcing the schemes, the Deputy Ministry of Tourism said new and upgraded versions of previous plans form part of the 2030 National Tourism Strategy.

One of the schemes, includes incentives to boost alternative tourism, such as conferences, international sports events, attracting foreign teams to choose Cyprus as their training base ahead of a new season.

Another scheme provides incentives for the certification of recreational diving services in Cyprus. The schemes also include incentives to boost agrotourism by organising events to promote local food products and wines and organising familiarization trips for niche tourism on the island. One of the schemes provides for incentives for hosting cruise ships.

“Beyond the specialized objectives served by each plan, the deputy ministry is

generally aiming, through their implementation, at upgrading the tourist product and attracting larger flows of visitors to our country outside the peak period,” the tourism ministry said.

Since February 6, travelling to Cyprus has become a harder task after authorities tightened controls at airport fearing the import of more potent strains of the virus.

People now arriving at Larnaca and Paphos airports from category A and B countries need to self-isolate for three days and undertake a PCR test for coronavirus upon ending their quarantine.

Previously, passengers from category A destinations did not need to present a negative PCR test to enter, while those from category B countries required one, but did not need to self-isolate.

Following concerns over new potent strains of coronavirus infiltrating Europe, Cyprus health authorities have decided to step up measures for arrivals at airports.

Women in Cyprus are still paid less than their male colleagues with the gender pay gap at 10.4% but the island is taking baby steps in eradicating gender-based inequality.

Although better off than the EU average of 16%, Cyprus women are still paid EUR 10 less for every EUR 100 their male colleagues are earning.

In a message on Tuesday, marking the International Equal Pay Day, the Committee for Gender Equality said its aim is to address the issue of the gender pay gap in Cyprus.

According to the Committee, the gender pay gap is the difference between the average salary of men and the average salary of women in the economy as a whole.

However, the Committee argues, the pay gap is not an indicator of the general quality between men and women as it only reflects pay and the different working conditions for men and women.

The index does not take into account the percentage of low-skilled or unskilled women and a wide pay gap is usually a typical characteristic of a highly segregated labour market, such as Cyprus, or where a significant proportion of women work part-time.

The Committee said research has shown that actions taken by the social partners contribute to reducing the pay gap while legal interventions also plays a part in strengthening monitoring mechanisms related to supporting women’s employment and reconciling work and family life.

“A continuous effort is needed to consolidate a work culture free from direct and indirect discrimination, as reflected in national policy and collective agreements.”

Cyprus has made slow but steady progress in closing the gender gap the workplace and the society.

Based on Eurostat data on gender pay gap trends, the European Trade Union Confederation (ETUC) calculated in October that the EU’s earnings divide will not be eliminated until the next century at the current pace of change.

However, Cyprus is slightly better off, as according to the ETUC, its gender pay gap is expected to be erased in 2051 while it will take the EU up until 2104.

It said the gender pay gap in the EU has narrowed by just 1% in the last eight years, at this rate, women in the EU will have to wait another 84 years to achieve equal pay if current wage trends continue.

In Cyprus, the gap was 16.8% in 2010 and fell to 13.7% in 2018, so according to the ETUC, if Cyprus keeps closing the gap at the same rate, then it will be overcome in 30 years.

Meanwhile, in the latest EU Gender Equality Index released earlier in October, Cyprus ranked 21st in the EU with a score of 56.9 out of 100, increasing its mark by 7.9 points since 2010 (+0.6 since 2017), making slightly faster progress towards gender equality than other EU Member States.

The European Commission expects the Cyprus economy to grow by 3.2% against a recession of 5.8% for 2020, according to its winter economic forecasts issued Thursday.

GDP growth is expected to remain stable at 3.1% in 2022 but the forecast is lower than the government’s prediction of a bigger rebound this year.

Finance Minister Constantinos Petrides predicts the Cyprus economy will bounce back from the pandemic with 4.5% GDP growth following a 5.5% contraction last year.

The Commission said: “real GDP rebounded strongly in the third quarter of 2020 (+9.4% compared to the second quarter)…driven by domestic demand, which was mainly underpinned by fiscal stimulus, while exports of goods and services decreased”.

It said the recovery “lost some steam” towards the end of the year as lockdown measures were reintroduced to combat a resurgence in COVID-19 infections.

“Economic sentiment and consumer confidence worsened in the last two months of the year and again in January 2021. Real GDP is estimated to have contracted by 5.8% in 2020,” the forecast noted.

“In 2021, a partial recovery is forecast, with real GDP growth expected to reach 3.2%. Containment measures have become stricter since the start of the year, but they affect a smaller share of economic activity than in spring 2020.”

The forecast said, “as restrictions are expected to continue until vaccinations pick up and cases drop, the recovery is expected to take place mainly in the second half of 2021”.

Domestic demand is expected to be the main contributor to growth.

“Policy measures adopted to mitigate the impact of the crisis have been extended into 2021, and some of them, such as the loan repayment moratorium, are planned to remain in place at least until June 2021. “These measures should continue to support employment, household incomes and help businesses to maintain their capacity. Furthermore, construction activity has so far escaped disruption from the lockdown measures.”

Tourism, a key sector for Cyprus, has borne the brunt of the pandemic with receipts significantly declining by around 85% in 2020.

“This trend is expected to be only partially reversed in 2021.

“On the supply side, interruptions to airline capacity and, on the demand side, varying progress with vaccinations in Cyprus’s main tourist markets and lower confidence in air travel are expected to weigh on the sector’s recovery.”

According to the EU, headline inflation fell to -1.1% in 2020, dragged down by lower prices for energy and processed foods.

And the VAT rate reduction in the hospitality industry led to a fall in the prices of services.

Inflation is forecast to turn positive in 2021 and 2022, at 0.7% and 1.1%, respectively, underpinned by higher energy and services prices.