The Cyprus tourist industry will probably pay the price of the outrageous price hike in crude oil to $50 per barrel and will have to deal with the possible drop in tourist arrivals and tourist revenues.
According to forecasts, the market cost of fuel represents 15% of the total cost of the air companies. The increase in the price of oil to more than $50 per barrel forced British Airways to increase the surcharge to $5 per flight. This development affects Cyprus, since 50% - 60% of the total tourist arrivals are British. In its September report, the EIU anticipates that the rally in the price of crude oil will affect negatively Cyprus due to its distance from the main tourist markets.
The increase in the cost of fares will not affect largely tourist arrivals in Cyprus. The surcharge is low in relation to the price of the ticket, a Cyprus Airways representative said.
Similarly, a British Airways representative told StockWatch that the slight increase in the price of fares will not affect the Company’s turnover, given the size of British Airways and the social class of its passengers.
Repercussions
However, the increased energy cost has slowed down the economic activity worldwide, with negative repercussions on the purchasing power of the consumers. “The repercussions from the price hike in oil cannot be calculated at the current stage”, a Planning Office source said.
“The increased cost of oil will affect the second important cost ratio for energy of the hotel industry and the labour cost”, PASYXE General Manager, Zacharias Ioannides said.
“What will actually affect tourists is the increase in the price of hotels, consumer goods and services”, the BA representative added.
CTO: Optimistic for winter
A CTO representative told StockWatch that the organization is optimistic for the winter season due to the agreements that it has reached in the past few months.
“We cannot proceed to forecasts for the next season at the current stage since we are still not aware of the programs of the tour operators”, Thasos Katsourides noted.
According to forecasts, the market cost of fuel represents 15% of the total cost of the air companies. The increase in the price of oil to more than $50 per barrel forced British Airways to increase the surcharge to $5 per flight. This development affects Cyprus, since 50% - 60% of the total tourist arrivals are British. In its September report, the EIU anticipates that the rally in the price of crude oil will affect negatively Cyprus due to its distance from the main tourist markets.
The increase in the cost of fares will not affect largely tourist arrivals in Cyprus. The surcharge is low in relation to the price of the ticket, a Cyprus Airways representative said.
Similarly, a British Airways representative told StockWatch that the slight increase in the price of fares will not affect the Company’s turnover, given the size of British Airways and the social class of its passengers.
Repercussions
However, the increased energy cost has slowed down the economic activity worldwide, with negative repercussions on the purchasing power of the consumers. “The repercussions from the price hike in oil cannot be calculated at the current stage”, a Planning Office source said.
“The increased cost of oil will affect the second important cost ratio for energy of the hotel industry and the labour cost”, PASYXE General Manager, Zacharias Ioannides said.
“What will actually affect tourists is the increase in the price of hotels, consumer goods and services”, the BA representative added.
CTO: Optimistic for winter
A CTO representative told StockWatch that the organization is optimistic for the winter season due to the agreements that it has reached in the past few months.
“We cannot proceed to forecasts for the next season at the current stage since we are still not aware of the programs of the tour operators”, Thasos Katsourides noted.
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