Cyprus Eyes Rebound from Loss of Russian, Ukrainian Tourists

Tourists visit the sea caves during sunset in the southern coastal resort of Ayia Napa in the southeast Mediterranean island of Cyprus, Sunday, May 29, 2022.  (AP Photo/Petros Karadjias)
Tourists visit the sea caves during sunset in the southern coastal resort of Ayia Napa in the southeast Mediterranean island of Cyprus, Sunday, May 29, 2022. (AP Photo/Petros Karadjias)
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Cyprus Eyes Rebound from Loss of Russian, Ukrainian Tourists

Tourists visit the sea caves during sunset in the southern coastal resort of Ayia Napa in the southeast Mediterranean island of Cyprus, Sunday, May 29, 2022.  (AP Photo/Petros Karadjias)
Tourists visit the sea caves during sunset in the southern coastal resort of Ayia Napa in the southeast Mediterranean island of Cyprus, Sunday, May 29, 2022. (AP Photo/Petros Karadjias)

Archimandrite Agathonikos bows before the silver-covered icon of the Virgin Mary to offer prayers for an end to the war between “peoples of the same religion” in Ukraine.

Until the outbreak of the COVID-19 pandemic, hundreds of Russian and Ukrainian Orthodox faithful visiting Cyprus would come daily to venerate the relic. Tradition dictates it was fashioned by Luke the Evangelist from beeswax and mastic and blessed by the Virgin herself as a true representation of her image, AFP said.

With the war and a European Union ban on Russian flights, the estimated 800,000 Russian and Ukrainian vacationers that head to Cyprus each year for its warm, azure waters and religious history stretching back to the dawn of Christianity are practically down to zero. In record-setting 2019, they made up a fifth of all tourists to the island nation in the Mediterranean Sea south of Turkey.

“We’ve had many worshippers from these two countries fighting today,” Agathonikos said. “I wish and pray to our Virgin that these two peoples who fight today are shown the way to peace — the faithful in both countries should pray for that.”

He is the abbot of Kykkos Monastery on the northeastern ridgeline of Cyprus’ Troodos mountain range, which has been home to the icon for nearly a thousand years. It, the tomb of St. Lazarus in Larnaca and the monastery of Stavrovouni that houses a large piece of the Holy Cross are important Cyprus stops for Russians and Ukrainians on pilgrimages to the Holy Land, Agathonikos said.

Their absence this year, coming on the back of a steep drop in tourism at the pandemic’s outset, has cut into the revenue of a country whose tourism sector accounts for more than 10% of its economy. Other nations that rely on Russian and Ukrainian visitors like Turkey, Cuba and Egypt also braced for losses just as tourism began bouncing back.

Cyprus Deputy Minister for Tourism Savvas Perdios estimates the loss from Russian and Ukrainian visitors will total about 600 million euros ($645 million) this year, with expectations before the war that the number of visitors would be approaching that of 2019.

Cyprus is one of the shortest flights from Russia to any Mediterranean holiday destination, but the EU flight ban negated that advantage.

Businesses are hurting, especially local travel agencies that work with big tour operators focusing on the Russian market. Some hotels on Cyprus’ popular eastern coastline that catered to Russian vacationers are feeling the sting, too, said Haris Loizides, board president of the Cyprus Hotel Association.

An additional burden weighing on hotel owners is high inflation that has cranked up operating costs, he said.

Vassos Xidias, proprietor of a seafood tavern bearing his name overlooking the small Ayia Napa harbor, says his business has dropped by as much as 50% this year because of losing the Russian market.

“There’s a huge problem in our work," Xidias said. “Now, we’ll see how much this will be covered by the European market and others. It’s the gamble that we’re waiting to see over the next four months that remain” of the tourist season.

Despite the upheaval, officials say that thanks to foresight and planning to find new markets even before Russia invaded Ukraine, Cyprus is projected to make up a sizable chunk of the lost revenue.

More vacationers are expected this summer from European markets, including Scandinavian countries, France and Germany, who spend more per day on average than Russians.

“Now we are a point of comparison where, you know, a Russian person will be leaving in Cyprus around 60 euros per person per day, whereas other nationalities, around 90 euros,” Perdios says.

While there were no direct flights from France to Cyprus two years ago, 20 flights will take off each week this year. Weekly flights from Germany and Scandinavian countries have increased to 50 and 30, respectively, this year — higher than in 2019.

Lozides says hotel owners may be reporting fewer bookings than 2019, but higher guest spending is expected to boost revenue.

Both Loizides and Perdios say this optimism is driven by the public’s desire to get away after two years of pandemic lockdowns.

“Nothing is going to stop people from traveling this year,” Perdios said.

Loizides said hotel owners haven’t given up entirely on bringing Russian tourists this summer. He says they’re looking into possibly getting Russians to Cyprus through countries not bound by the flight ban, like Serbia, Georgia and Israel.

Perdios says his ministry’s revamped tourism strategy has gained traction in European markets as it highlights what Cyprus has to offer beyond sun and surf.

That includes vegan-friendly hotels and winery tours through mountainous villages to learn about wines such as Commandaria, winner of the first international wine competition in 1224.

“We have done so much work in order to be able to stand before you today and say, ‘Hey, you know what? It’s going to be an OK season. It’s going to be a decent season. It’s not a disaster. And we’re going to be all right,'” Perdios said.



US Election Weighs on Markets

US Dollar banknotes are seen in this illustration picture taken June 14, 2022. (Reuters)
US Dollar banknotes are seen in this illustration picture taken June 14, 2022. (Reuters)
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US Election Weighs on Markets

US Dollar banknotes are seen in this illustration picture taken June 14, 2022. (Reuters)
US Dollar banknotes are seen in this illustration picture taken June 14, 2022. (Reuters)

The dollar softened and stocks fell on Monday as investors treaded carefully hours before the US presidential election, with a US Federal Reserve interest-rate cut also expected later in the week.

In the US presidential race, Democratic Kamala Harris and Republican Donald Trump remain virtually tied in opinion polls ahead of Tuesday's vote. It might not be clear who won for days after voting ends.

“Tuesday will shape the direction of the world economy and geopolitics for the next four years,” Deutsche Bank analysts wrote.

They cautioned that “there remains a large degree of uncertainty around both the result, including the very tight House (of Representatives) race, and when we will know it.”

Trump's policies on immigration, tax cuts and tariffs may put upward pressure on inflation, bond yields and the dollar, analysts say, while Harris is seen as the continuity candidate.

Uncertainty over the outcome is one reason markets assume the Federal Reserve will choose to cut rates by a standard 25 basis points on Thursday, rather than repeat its outsized half-point easing.

The Bank of England also meets Thursday and is expected to cut by 25 basis points, while the Riksbank is seen easing by 50 basis points and the Norges Bank is expected to stay on hold.

The Reserve Bank of Australia holds its meeting on Tuesday and again is expected to hold rates steady.

“Based on current data, we see no reason for (the Federal Open Market Committee) to rush through rate cuts,” said analysts at ANZ. “The election and uncertainty over the future fiscal path also support arguments for caution in recalibrating monetary policy.”

The euro extended an early climb to be up 0.5% at $1.0891 and looked set to test resistance around $1.0905. The dollar fell 0.6% on the yen to 152.60. The dollar index eased 0.1% to 103.80.

Dealers said the dip in the dollar might be linked to a poll that showed Harris taking a surprise 3-point lead in Iowa, thanks largely to her popularity with female voters.

“Markets are seemingly scaling back some Trump trades, and we suspect the next two days can see some abnormal swings in USD crosses due to tighter volatility conditions ahead of a closely contested and highly binary US election,” ING FX strategist Francesco Pesole said.

European stocks were flat, while oil prices climbed nearly 3% on Monday on OPEC+'s decision for a month's delay in plans to increase output, while investors also focused on the US presidential election.

British stocks outperformed continental indexes to add 0.5%, helped by the energy sector.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7%, recovering from its fall to a five-week low on Friday.

Chinese blue-chip stocks gained 1.4%, with the Shanghai Composite Index up 1.2%.

Wall Street also notched slim gains ahead of Tuesday's US election. Futures had the S&P 500 up 0.2% ahead of Monday’s opening bell, while the Nasdaq and Dow Jones were seen 0.1% higher respectively.

Bonds have rallied on Monday as a result of the latest swing in the polls, with yields on 10-year US treasuries down 10 basis points at 4.28%.