Sustainable Tourism Development in Northern Cyprus and Prospects for Convergence

1
Sustainable Tourism Development in Northern
Cyprus and Prospects for Convergence

• Dr. Bulent Kanol
• (PhD in Management)
• Executive Director
• The Management Centre of the
• Mediterranean

2
Outline

• Introduction
• Literature Review
• Methodology
• Research and Findings
• Analysis and Discussions
• Conclusion and Recommendations

3
Introduction

• The paper aims to help those policy makers who
  are seeking ways of developing the economy of
  Northern Cyprus and managing a smooth convergence
  of the two economies currently existing in
  Cyprus.

4
Literature Review

• Contemporary Developments
• Sustainable Tourism Development
• Cooperation and Peace with Tourism

5
Contemporary developments

• World Tourism Organisation
• 1995 564 mill. tourists 399bill.US
• 2020 1,602 mill. 2,000bill.US
• Top Providers Germany, Japan, US, China and UK.

6
Contemporary Developments-2

• West- Europe will loose its share in tourism
  intake
• Central-Eastern and Eastern-Mediterranean
  (Turkey, Cyprus and Israel) countries will
  increase their share.
• Average growth for the East-Med countries are
  given as 4.6.
• Middle Eastern countries have a big potential to
  increase their share through its natural and
  cultural resources
• Key to success of tourism in the Middle East is
  the political stability of the region

7
Contemporary Developments-3

• Mega-Trends
• Globalisation/localization
• The impact of Electronic technology
• Polarisation of tourist tastes Comfort based and
  adventure based
• 3Es concept (Entertainment, excitement and
  education)
• (This is in contrast to 3Ss Sea, Sand and Sun.)
• Sustainable tourism and socio-environmental
  consciousness.

8
Cyprus and Tourism

• Cyprus seats in the middle of what one can
  describe as the cross-road of the growth of
  tourism activity with its strategic geographical
  location that connects Central and Eastern
  Europe, Middle East and Eastern Mediterranean

9
Sustainable Tourism Development

• Sustainable tourism development meets the needs
  of present tourists and host regions while
  protecting and enhancing opportunities for the
  future. It is envisaged as leading to management
  of all resources in such a way that economic,
  social and aesthetic needs can be fulfilled while
  maintaining cultural integrity, essential
  ecological processes, biological diversity, and
  life support systems.
• WTO, 1998. Guide for Local Authorities on
  Developing Sustainable Tourism.

10
Sustainable Tourism-2

• Natural, historical, cultural and other resources
  for tourism are conserved for continuous use in
  the future, while still bringing benefits to the
  present society.
• Tourism development is planned and managed so
  that it does not generate serious environmental
  or socio-cultural problems in the tourism area
• The overall environmental quality of the tourism
  area is maintained and improved where needed
• A high level of tourist satisfaction is
  maintained so that the tourist destinations will
  retain their marketability and popularity.
• The benefits of tourism are widely spread
  throughout the society

11
Cooperation and Peace with Tourism

• tourism is strongly dependent on peace and
  security (Pizam and Mansfeld, 1996)
• Vietnam is now a holiday destination
• Political unrest, war depressions and civil
  strife discourage tourism (McIntosh et al,1995)
• the relationship between tourism and peace has
  two dimensions according to Michalic (1996)
• On the one hand tourism can be a vital force for
  peace (WTO,1980) and on the other hand, tourism
  needs peace for its development and prosperity.
  (Young- Sun,2004)

12
Co-operation and Peace with Tourism-2

• The Case of North-South Korea
  (Young-Sun 2003)
• The two political leaders of two Koreas (North
  and South) recognised the importance of tourism
  in building peace when they met in Pyongyang on
  April 13-15 to end over fifty years of
  hostilities.
• Recognized that the two Koreas were among the
  most directly affected by world peace process
  that started in the beginning of 1990s

13
Co-operation and Peace with Tourism-3

• The Case of North-South Korea
  (Young-Sun 2003)
• This had a large affect on both countries
  socially, politically and economically
• Tourism was identified as one sector where
  discussion was most likely to occur.
• One leading example was the use of water-based
  activity holidays and cruising that promote the
  use of the Mt. Kumgang.

14
Co-operation and Peace with Tourism-4

• The Case of North-South Korea
• Other possible areas of cooperation
• joint operations of trans-boundary attractions
• joint tourism infrastructure
• Co-operation in human development

15
Methodology

• Primary Research
• Action Research by Interactive workshops
• Case Studies
• Secondary Research
• Master Plan/Development Plan work
• Statistics and official publications

16
Primary Research

• 6 Interactive workshops with the stakeholders of
  tourism sector of Northern Cyprus
• 1999-2000
• 2 Interactive workshops for the regions of
  Famagusta/Iskele/Karpaz
• 2004-2005

17
Findings

• Tourism Promotion and Marketing
• Lack of image and professional media coverage
• The ineffectiveness of the tourism bureaus in
  other countries
• No clear strategy on What to market and how to
  market

18
Findings-2

• Tourist Transport
• The ownership and governance of CTA (KTHY)
• Not being able to fly to and from new
  destinations
• Lack of standards in charter incentives
• Not being able to use CTA for tourism promotions
• Delays in fixing price lists for tour operators
• Lack of Interline agreement between the CTO and
  other airlines
• Tourists coming to Istanbul have to wait long
  hours to take a plane to Ercan (for THY
  passengers)

19
Findings-3

• Human Resources and Training
• There is a need to reorganise and restructure
  OTEM (tourism vocational school). The graduates
  are not adequate.
• The hotels opt for unskilled and cheap labour and
  do not hire tourism graduates from universities.
  Those graduates from tourism colleges also are
  moving out of sector
• Tourism students going for summer internships are
  mistreated.

20
Findings 4

• Human Resources and Training2
• The tourist guide courses do not have standard
  and adequate curriculum
• Not enough staff are trained to serve in the area
  of special interest tourism
• Taxi and tour drivers are not trained to serve
  the sector
• Lack of a Tourism Research and documentation
  Centre/Library

21
Findings-5

• Tourism Product and Local problems
• Inadequate legal infrastructure of related
  organisations in the sector
• Inadequate municipal services (specially water
  and garbage collection)
• Lack of quality and price standards for hotels
  and restaurants
• Unplanned construction work destroying the
  environment
• Lack of regional and resort based sewage and
  treatment systems for waste water
• Noise pollution coming from open-air music from
  discos and restaurants.
• Lack of profile for tourist expectations

22
Findings-6

• Tourism Product and Local Problems2
• Lack of physical zoning plans in the current
  masterplan
• Lack of inspection over Car rental companies
• Tourism investments submitting their projects
  after starting construction
• Inadequate maintenance, repair and restoration
  work on antiquities
• Negligence of Guzelyurt/Lefke region as a tourist
  destination
• High and unstable Taxi fares
• Lack of alternative tourism options

23
Regional Workshops

• Vision for Karpaz
• A Karpaz where a special project involving our
  cultural products is implemented and which
  possesses Karpaz National Park which was put
  into life as a result of an international
  competition within the framework of the
  Sustainable Development Program for Karpaz
• With solution to the Cyprus problem, facilitating
  tourism in accordance with the international law,
  which would be open to settlement while hosting
  its legal residents, banning the construction of
  private homes over the seacoast and
  well-preserved environment with well-planned
  construction of motel-hotel and guesthouses over
  the region.
• Developed by the main stakeholders civil and
  official, from and outside the region
• (Feb 2005)

24
Regional Workshops-2

• Vision for the Walled City of Famagusta
• A city that has gained a place in the registered
  international identity lists of Europe and the
  Mediterranean
• Developed its advantage as a tourism port and
  turned this advantage into economic gains from
  tourism and culture at the same time preserving
  its unique cultural and architectural heritage
  with living functions.
• Developed by the main stakeholders civil and
  official, from and outside the region
  (April 2005)

25
Case Studies

• Successes
• A small Hotel in Karpaz shores with alternative
  energy
• An example of guest-housing street in a Karpaz
  village
• Using Internet marketing for a small hotel
  outside the Kyrenia city
• A holiday village with the right type of soft and
  traditional architecture
• A high quality deluxe hotel with Casino at the
  outskirts of the Kyrenia City

26
Case Studies-2

• Failures
• A small hotel in the city with low quality Casino
  clientele
• A big hotel built as a 5-star with casino outside
  the city with poor management
• A small hotel on a picturesque side on mountains
  with wrong marketing and promotion strategy
• A successful 4-star hotel outside the city going
  down by introducing casino and loosing its
  traditional clientele.

27
Secondary Research

• Master Plan/Development Plan
• The tourism masterplan study started in 1996 by
  the relevant tourism department and was
  finalised with revisions in November 1999 under
  the title of Tourism Development Plan.
• The plan is pending at the State Planning
  Organisation, which is the legal body to
  introduce the necessary law for the
  implementation of the plan.

28
Secondary Research-2

• Masterplan/Development Plan
• Estimated Visitors, Bed capacity and amount of
  Investment(2005-2010)
• Year Number of Tourists Number
  of Beds
• 2005 369,431 10,348
• 2006 407,973 11,427
• 2007 450,537 12,620
• 2008 497,542 13,936
• 2009 549,451 15,390
• 2010 606,775 16,996

29
Secondary Research-3

• MasterPlan/Development Plan
• Main Strategies
• Creating Differentiated tourism products based on
  comparative advantage over the competitors
• Develop tourism based on regional differentiation
• Adoption of Special Interest Tourism besides Mass
  Tourism
• Developing tourism to benefit from the natural
  and manmade environment for a long period
• Developing tourism based on SMEs

30
Secondary Research-4

• MasterPlan/Development Plan
• Main Strategies (2)
• Developing tourism in coordination with the NGOs,
  local authorities, private sector and the
  universities
• Adopting a tourism development model in harmony
  with other sectors
• Adopting appropriate models to meet the social,
  economic and physical transport facilities
• Structure of tourism industry and Policies free
  from political influences.

31
Secondary Research-5

• Tourism Planning Department Tourism Statistics
  (Jan-April 2005
• The bed capacity in 2005 already exceeded 12,000
• The number of tourist estimates remains to be
  increasing steadily as foreseen in the
  Development Plan.
• The tourist arrivals in the 2004 were 275,711
  (162,790 from Turkey and 112,921 from other
  countries).
• About half of those coming from other countries
  are from UK followed by Germany.

32
Secondary Research-6

• Average length of stay for each tourist was
  around 5 days in 2004.
• In 2004 the occupancy rate increased to 41.2
  from 37 in 2003.
• The average for the last 10 years (1994-2003) was
  35.7.

33
Analysis Discussions

• Instability stemming from political and economic
  turmoil is directly affecting the occupancy rates
  more than anything else.
• When there is an improvement in the political
  atmosphere there is an increase in the occupancy
  rates.
• One clear example is 1996-97 when there were
  border incidents and the negative developments
  due to EU Luxembourg summit decision against
  Turkeys candidacy. The occupancy rates went down
  from 37.5 to 31.8.
• The second example is when there was a big
  devaluation of TL in 2001, which led to major
  economic crises in Turkey and had a very adverse
  effect on the economy of Northern Cyprus
  (occupancy rates went down from 37.2 to 30.9.

34
Analysis Discussions-2

• Year Occupancy()Income (mil. US)
• 1994 37.3 172.9
• 1995 37.5 218.9
• 1996 31.8 175.6
• 1997 34.8 183.2
• 1998 36.6 186.0
• 1999 36.7 192.8
• 2000 37.2 198.3
• 2001 30.9 93,7
• 2002 37.8 114.1
• 2003 37.9 178.8
• 2004 41.2 ?

35
Analysis Discussions-3

• In 2004 the occupancy rate increased to 41.2
  from 37 in 2003.
• The average for the last 10 years (1994-2003) was
  35.7.
• This increase is a significant 11.3 increase,
  which is due to the Annan Plan Referenda and the
  opening of the gates.

36
Analysis Discussions-4

• Four main factors to determine which resort is
  better occupied than the other is
• 1. Region
• 2. City or outside city
• 3. Casino/5 star
• 4. Good management/strategy
• (Analysing the occupancy rates of individual
  hotels in 2004)

37
Analysis Discussions-5

• Analysing the occupancy rates of individual
  hotels in 2004
• there is no one type of resort (holiday village,
  hotel, motel, and boutique hotel, small or big)
  which is doing well except the Casino/5 star
  hotels.
• The performance of others is mainly due to where
  they are located and how well they are managed.
• This is mainly due to the unplanned nature of
  tourism in the North
• Also not having consistent policies towards
  supporting a type of tourist profile or a type of
  tourist resort in the country.
• Property title deeds has not been a determining
  issue for performance

38
Analysis Discussions-6

• There is a direct link between which market the
  tourists are coming from and the accessibility of
  Northern Cyprus from those markets
• CTAs performance in Turkey and the UK is
  reflected in numbers of tourists as well as
  political, social and cultural links exist with
  these markets.

39
Conclusions Recommendations

• There are four major factors that determine the
  performance of the tourism sector in Northern
  Cyprus
• 1. Political / security developments and the
  peace process
• 2. Economic conditions as well as accessibility
  in the main markets (Turkey, UK Germany)
• 3. Management/Strategy adopted by the sector
• 4. Management/Strategy adopted by individual
  tourist resorts

40
Conclusions Recommendations-2

• The present Masterplan/Development Plan should be
  developed revised and developed further with the
  necessary zonings and physical plans and should
  be implemented with the way of Strategic Plans
  for shorter periods such as 2-3 years.
• The sector needs to look at the Casinos carefully
  and have a much more clear and solid policy for
  this sector. Concentration of Casinos in only
  one Centre could be an alternative policy to the
  current laisssez faire development policy.
• Luxury deluxe hotels in the main cities (Lefkosa,
  Girne and Famagusta) can continue to be
  encouraged. Residential areas of the North should
  not be allowed to become Centres for casinos and
  gambling.

41
Conclusion Recommendations-3

• There is potential and will amongst the
  stakeholders in the North to develop alternative
  tourism such as special interest, agro, eco type
  of tourism which can be a base for sustainable
  tourism development
• Small hotels with less than 100 bed capacity
  should be organized to promote, market and
  finance their operations jointly through either
  associations or professional companies with the
  help of the state or other international funding
  organizations.

42
Conclusion Recommendations-4

• Marketing to individual tourists over the
  internet could be a way out of political
  restrictions as well as the dominance of big tour
  operators
• There is a need to allign the operations of CTA
  to the tourism strategy adopted. Tourism markets
  are not markets without satisfactory transport.
• Direct charter flights from UK and Germany and
  interline agreements with the Turkish Airlines
  can be managed even with the existing political
  constraints.
• An intensive training program should be
  introduced to the sector on sustainable tourism
  development, and alternative tourism to mass
  tourism

43
Conclusion Recommendations-5

• There is a dialectic relationship between tourism
  and peace. While tourism movements can foster
  better understanding of different cultures and
  reduce tension it cannot flourish in regions
  where there is a continuous potential for
  conflict and confrontation.
• Therefore, although Cyprus has been very
  fortunate to attract tourists with its chronic
  political problem, it should be understood that
  the type of quality tourists, which the country
  aspires for, might not be willing to spend their
  most special time in a place where there is
  conflict and tension.
• This fact on its own should be a reason for
  pushing for a peaceful solution if Cyprus wants
  to continue increasing its economic welfare by
  way of developing the tourism sector.

44
Conclusion Recommendations-6

• The south has been using predominantly mass
  tourism to make high gains from tourism.
  Considering that the tourism trends are moving
  away from mass tourism towards alternative
  tourism such as Agro-Eco-Special Interest and
  more focusing on Niche markets, there is an
  increasing need for developing new tourism
  products.
• The potential that the northern part of the
  island has provides new opportunities for joint
  action. Two-destiny tours, daily tours and joint
  investments in the field of special interest
  tourism in the north could be some business
  prospects that is worth considering by investors
  and business people of both sides of Cyprus.