“Finance Ministry’s forecasts that tourist arrivals will drop by 5% by the end of the year compared to 2002 are optimistic”, the Hoteliers' Association (PASYXE) General Manager, Zacharias Ioannides, told StockWatch on Friday, expressing at the same time his reservations on Ministry’s estimates for 2003, 2004, 2005 and 2006.

The Finance Ministry estimates that tourist arrivals will reach 2.7 million by 2006.

Mr. Ioannidis explained that the first two months of autumn are usually a high season period for tourist arrivals from the Central Europe. “Given that tourist arrivals from Germany, Switzerland, the Netherlands etc usually increase for September and October, we anticipate that the slowdown recorded by these markets until now, is likely to exacerbate the situation during these months”, Mr. Ioannidis said.

In July, German tourist arrivals dropped by 10%, while for January-July they recorded a slump of 34%. However, the average contribution of Germany to the total tourist arrivals on the island since 1980 hardly amounts to 8%.

Mr. Ioannidis has also expressed his reservations on the Ministry’s estimates for the next three years. “Tourist reservations for winter and summer 2004 will show a decline”, he said.

“To secure such a growth in the Cyprus tourist industry, the government must take a number of measures to deal with the reduced competitiveness, the increased operating cost, seasonability and the reduced productivity”, Mr., Ioannidis concluded.