Mountain area hoteliers calling for 10 new support measures

The Chairman of the Board of the Agros Development Company Proodos Public Ltd, which owns the Rodon Mount Hotel & Resort in Agros has emphasised the need to support and provide compensatory measures for the hotels in the mountains, warning of the risk of a permanent interruption of their operations, for Cyprus’ countryside and local economy.

Antonis Pissarides’ comments were published in the August 2024 edition of the Cyprus Hotel Association’s monthly online publication ‘Xenodochos.’

Pissarides said that " without compensatory measures, which on the one hand to reduce operating costs and on the other hand to increase occupancies and revenues, the future is not bright for the hotel industry, a sector of particular importance to the mountainous areas.”

Pissarides said that he had in the past prepared a study with recommendations for compensatory measures aimed at the sustainable tourism development of the mountainous areas, which he submitted to all competent bodies.

"We keep the countryside alive"

According toPissarides, most of the hotels in the mountainous and semi-mountainous resorts of Cyprus (altitude above 600 m.) operate 24 hours a day and attract local and foreign vacationers/visitors, mainly people with special interests.

As a result, he added, "they keep the Cypriot countryside alive and at the same time allow parallel developments, such as agriculture, dining and leisure centres and family-based crafts that produce/make/trade traditional foods, sweets, drinks and various other products".

In addition, he underlined, "they offer employment and jobs to young people, while through their operation they contribute positively to the creation of new households, who choose, due to employment in hotels, agriculture or crafts, to settle in the countryside and in this way help to combating urbanism," while at the same time, "the hotels of the mountainous and semi-mountainous resorts operate under unusual conditions."

Difficulties for hotels

Pissarides noted that, "due to reduced demand they are forced to operate most days of the year with very low occupancy and with reduced prices, especially on weekdays, except during the months July and August and that’s because of the Social Insurance Services’ Subsidised Holiday Schemes."

The Subsidised Holiday Scheme for People with Low Pensions, which has been successfully implemented in recent years, he added, “provided additional income and financial support. Economic relief for the period of the pandemic was provided by the Emergency Plan to Support Domestic Tourism of the Deputy Ministry of Tourism.”

“In 2020, the decree was issued on the minimum wages and benefits of staff working in hotels. This decree, together with the pandemic and the wars that followed, all increased the management and operation costs of the hotels, disproportionately in the mountains. As a result, the operating conditions of the mountain hotels became very difficult,” Pissarides emphasised.

He went on to indicate that "if special incentives-grants are not given and if substantial support measures are not taken by the state, so that they regain their lost comparative advantage and their glory, the mountain hotels will cease to be viable, with the risk of a permanent interruption of their operations now visible, with all that this means or implies for the Cypriot countryside and for the local economy."

In order to avoid the worst and any unpleasant developments for the countryside and the economy, he explained further, "we suggest two sets of compensatory measures, as special incentives to the hotels of the mountainous and semi-mountainous resorts", underlining that similar support measures apply both in Greece and in other European countries.

Support measures

More specefically, he added, the first package concerns measures to reduce the operating costs of businesses in the mountains and the second set of measures will help increase occupancy and revenues.

Regarding the measures that reduce operating costs, Pissarides said he recommends:

1. Reduction of taxes paid to the state:

(a) Reduction of VAT from 9% to 5%.

(b) Other types of tax reductions can be examined.

2. Reduction or even abolition of overnight charges paid to Community Councils.

3. Subsidy of energy costs (electricity, gas, oil)

4. Special employment allowance for the staff for the winter season, in order to avoid the suspension of work (work allowance and not unemployment).

5. Special incentives/grants for renovation projects - digital upgrading - energy efficiency or even for expansions, with the aim of upgrading the tourist product and services offered in the mountain resorts.

6. Special incentives for creating green hotels.

Regarding the measures to increase hotel occupancy and revenue, Pissarides said that he recommends:

7. Scheme for Social Insurance-Subsidised Holidays: To increase the amount granted, to be announced in time and to continue to cover the months of July-August-September.

8. Scheme for low-income pensioners:

(a) Be extended to cover persons with special needs and other categories of vulnerable groups.

(b) To increase the amount and extend the period granted.

9. Scheme to Support Domestic Tourism by the Deputy. Tourism: To be brought back and established for the mountain hotels.

10. Targeted campaigns to highlight and promote the natural and built environment, as well as the historical, religious, cultural and environmental sites of mountainous Cyprus. Information campaigns, both in Cyprus and abroad, must be initiated by the Deputy Ministry of Tourism and focus on the special stakeholders and the new tourism model.

(Source: InBusinessNews)