Thanos Michaelides: One should not only look at the number of visitors we attract but also their income level, which defines the revenue

Thanos Michaelides, President of the Cyprus Hotels Association and CEO of Thanos Hotels and Resorts, reflects on the core values of the island’s hospitality industry.

Among other things, he notes the industry has long been a beacon of innovation, tirelessly striving to elevate guest experiences and enhance the country’s allure to the international community, while remaining respectful of Cypriot tradition.

You have been in the hospitality sector of Cyprus for a very long time. What would you pinpoint as the island’s strong points and competitive advantages?

The concept of hospitality acquires greater value when it carries with it a narrative, a history. Known as one of the world’s most iconic beach destinations, our island has a whole lot more to say, with a range of advantages over other European Mediterranean destinations. A key geographical location at the crossroads of Europe and the Middle East, a warm climate for sun lovers, a plethora of sights that offer visitors glimpses into our island’s fascinating history spanning thousands of years, countless natural beauty spots, as well as myriad experiences for every traveller. Having been in the hospitality sector and managed hotels since the 1970s, I have seen our Group grow and evolve. Throughout the years, we have been monitoring what our visitors seek and have invested in crafting authentic experiences to create unforgettable memories for everyone who chooses Cyprus for their holidays.

How do you incorporate local culture and aesthetics into the services and experiences you offer your guests?

The insight gained from the hotels we have been operating in Cyprus – the Anassa, the Annabelle and Almyra, the all-day Antasia Beach Club and the latest expansion of our business ventures to Greece with the Amyth hotels of Agios Stefanos and Super Paradise in Mykonos (Amyth Nicosia is expected within 2024) – has enabled us to realise the importance of dedicating time and effort to get to know our guests. To effectively incorporate local culture and aesthetics into our product, we first seek to understand our guests’ characteristics, identify which parts of our culture are of interest to them and what their sensitivities are. Then we develop the best way to communicate with them. This is a continuous exercise, constantly evolving to adapt to the shifts in people’s interests and preferences. One also needs to take into account the cultural differences between people of different nationalities. It is vital to be genuine and true to your local culture. Our guests value authenticity above all, delivered in a particular way that they can relate to. We incorporate many ways to communicate with our guests, from personal interactions to cultural events that bring them close to Cypriot traditions and the local art scene, but also to the local community. At the end of the day, it is about being challenged to deliver the optimal. Over the years, we have never tried to find the easiest thing to do but have insisted on the best thing to do.

How do you balance luxury with sustainability in your services?

Our hotels have been honoured with sustainability awards and distinctions over the years, highlighting our commitment to sustainable practices and corporate social responsibility. Our dedication to implementing environmentally friendly initiatives has set a benchmark for the hospitality industry. We have never tried to exaggerate regarding our activities, nor appeared to be ‘green’ with meaningless statements. It’s vital to remain honest. Some of our actions include the application of various water-saving measures. We use grey water for garden watering, monitor consumption with meters, and encourage guests to reduce linen changes. We employ energy-efficient chillers, AC units, and LED light fixtures in line with our commitment to reduce energy consumption. Heat recovered from the chillers warms the swimming pools, while daily consumption is monitored and employees are educated in energy management. Sustainability is a vast subject with many components, an interconnected web of participants. It includes hotel establishments visitors and the Government, both central and local. All stakeholders need to play their part to improve the sustainability of our tourist model. Our commitment also extends to other initiatives, such as embracing culture and the arts, enhancing educational opportunities for the next generation and contributing to animal welfare through a registered charity.

Cyprus relies heavily on the sun and sea to attract tourists. Can the island really be transformed into a year-round destination?

Tourism has always been the main driving force of the Cypriot economy. Having overcome various – and often successive – crises that have challenged the sustainability of the sector, the industry is recovering. With perseverance and vision, we are all working tirelessly to maintain growth, while looking for ways to enrich our product, so that the country becomes a year round destination. Firstly, Cyprus has the potential to improve the performance of the hospitality sector during the summer. Our high season should not be taken for granted. One should not only look at the number of visitors we attract but also their income level, which defines the revenue and, in the end, the profitability of the sector. We should aim at raising the occupancy of the hotels during the summer season, to have a flat occupancy curve, and also increase per visitor revenue. Ultimately, we need to balance the environmental cost with the revenue per guest. Tourism is changing, it’s evolving, and travellers are looking for new experiences. In the eternal dilemma of sea or mountain, Cyprus should be able to provide both. The island’s allure is not exhausted by the warm summer months but rather extends all year round. Authenticity in the experiences we offer, dedication to customer satisfaction and continuous development of the tourism product to respond to the rapid changes in the worldwide market are vital ‘ingredients’ that we need to take into consideration. In the meantime, we need to ensure that the main tourist resorts are fully operational during the winter months, in order to give travellers the experience that they would expect – nobody wants to holiday in a ghost town! We need to highlight the country’s cultural and natural wealth in a way that creates memories that will compel visitors to share and promote their experiences. Our product must also be enriched to attract more interest beyond the sea and sun. There are many opportunities for niche tourism, such as sports, nature exploration, health and wellness, gastronomy, wine, etc. Niche tourism requires highly developed itineraries and facilities that will satisfy expectations and needs. Other crucial factors to support are the availability of a flexible labour market, that will enable hotels to operate all year round, as well as a sophisticated marketing campaign to successfully reach the desired target audience. It’s worth mentioning one highly anticipated project in rural Cyprus – the Berengaria Hotel. Through the partnership between bbf: and Thanos Hotels, we are restoring the “hidden jewel of Prodromos” and feel confident that the Berengaria will make history in the new era of mountain tourism in Cyprus.

Short-term rentals are on the rise. How is the luxury hospitality sector adapting to this growing trend and continuing to attract investment?

There is, indeed, a growing trend in alternative tourist accommodation preferences, with an increasing number opting for self-catering options like Airbnb. Cyprus has also seen a surge in this type of accommodation, a trend aligning with the preferences of younger generations across Europe, who seek flexibility and lower cost. However, it is observed that while some may be excited to see a wide range of options on the Airbnb platform, additional variables such as accessibility, security, host experience and professionalism may discourage the viewer. In our industry, hotels are rated by certain standards and certifications, while Airbnbs are graded based on their profile descriptions, photos and guest ratings. Consequently, our Deputy Ministry of Tourism emphasises the need for proper regulation, pointing out that entrepreneurs/operators of short-term rentals must be officially registered. Although this market offers new multiple alternatives, there’s an urgent need for better control as they have been blamed for causing rents to rise, which in turn creates social issues. Meanwhile, a significant number of consumers, especially those of high-end status, still show a preference for full-service hotels that offer top quality amenities and service.

What do you see as the biggest opportunities for – and threats to – the hospitality sector in the next decade?

Hospitality is one of the fastest-changing industries, constantly affected by external factors such as consumer trends, staffing fluctuations and, of course, economic and geopolitical issues. This means that hotels need to be agile in responding to any changes that may affect them if they want to stay afloat in a highly competitive market. There are many good reasons why our tourist model has developed in the way it has but it is always advisable to think of ways to re-enhance it to remain viable. The needs and preferences of the modern-day tourist are rapidly shifting and we need to at least be on point, if not ahead of the curve. Among the main challenges we face is a declining labour force and, while the shortage of labour is a phenomenon that most developed economies face, what is of particular concern for Cyprus is the fact that we are an island with a small population that is not increasing. There is a structural issue with our demographics which is not being addressed. Additionally, we have historically relied on a handful of countries to attract visitors to Cyprus, which has created dependencies on particular markets, such as the UK, that we seem unable to shake off. The lack of alternative markets poses an increased risk to the business model, as proven in the past couple of years by the wars in Ukraine and neighbouring Gaza, which have affected the Russian and Israeli markets. As far as positive prospects are concerned, opportunities lie in leveraging the technology we utilise to enhance guest experiences, continuing to upgrade sustainable practices to reduce environmental impact, and focusing on embracing diverse cultural trends to attract a wider customer base.

(This article first appeared in the 2024 edition of The Cyprus Journal of Wealth Management, commissioned by Eurobank Cyprus and published by IMH. Click here to view the article. Click here to view the entire magazine online.)