What 8 Hotels in Cyprus Can Tell Us About Tourism’s Impact

Finding a destination suffering from the impacts of mass tourism doesn’t require a large-scale man-hunt, unfortunately.

Venice, Italy, for example, has become a playground for tourists and a wasteland for locals as the city is now too expensive and inhospitable for Italians to live in. The beauty of a place like Machu Picchu, Peru faces the threat of deterioration from the throngs of tourists visiting each year who may not consider the effects they have on the land and the area’s economy.

Cyprus, while it’s not a bucket list destination to the extent that Venice or Machu Picchu are, isn’t free from problems involving tourism and can offer a scaled-down example of what’s going on in many other destinations. The country receives more than 2 million international arrivals each year which is now on the decline following sanctions against Russia, which supplied a large number of visitors. The World Travel & Tourism Council estimates 25% of Cyprus’s GDP comes from its tourism contributions.

The Travel Foundation, working with Pricewaterhouse Coopers and the travel giant TUI Group, surveyed 600 employees at eight hotels in Cyprus and also examined the impact of 60,000 TUI Group travelers (who stayed at the hotels) on items such as the hotels’ spending versus tourists’ spending and the hotels’ environmental and social effects on the local economy during 2013.

“Visitor numbers on their own can only tell half the story,” said Salli Felton, CEO of The Travel Foundation in a statement.

“A ‘big picture’ approach can best inform those who develop and manage tourism so that local communities, the environment and businesses thrive. It’s clear from our research that broad public and private sector collaboration is essential, and every tourism organization with a stake in a destination or a particular sustainability challenge will have something to contribute.”

The study considers tourism’s impact through three lenses:

Direct, the results of the hotels’ activities; indirect, the result seen in the supply chain which support the hotels’ and guests’ activities; and induced, the spending of the hotel employees involved in the hotels’ activity and those in the supply chain.

Below are the key learnings from the study that demonstrate tourists’ environmental impact at these eight hotels is indeed greater than locals living in the surrounding areas and that guests’ spending helped local communities more than that of the hotels:

Tax Impact

• Cyprus’s direct tax impact from tourism makes up 33% of its total tax impact compared to its tourism’s direct economic impact making up 43% of total economic impact. This is partly because the tourism supply chain employs relatively lower paid employees who pay a smaller proportion of their salary in taxes compared to other sectors in the economy.
• The well-being of the hotel employees surveyed compared favorably to the average Cypriot employee in 2011 (the latest year for which data are available). Employment in the tourism sector often has a high staff turnover rate which is linked to unfavorable working conditions such as shift patterns and working. The survey results, however, suggest that even if working conditions are challenging, other factors mean that employees at these hotels don’t experience poorer levels of life satisfaction. Less than 10% of the 600 survey respondents indicated their earnings were less than TUI Group’s estimate of the “living wage” earnings equivalent.
• The cost to Cypriot taxpayers of providing public services to TUI Group’s guests is around $0.22 per guest night. This is low when compared to the $27.82 per guest night generated in tax contributions by the guests.

Hotel vs. Guest Spending Impact

• The analysis shows that guests’ discretionary spending has a greater economic impact per dollar of spend than spending by the hotels. Every dollar spent by the hotels generated $0.63 in further economic impact in Cyprus compared to $0.70 for every dollar of discretionary spend by guests. This is because hotels and guests spend money on different items, which results in a different overall impact.
• Only 37% of the food and beverages bought by the hotels was reported to have been produced in Cyprus. In comparison, government data suggest that, on average, 71% of purchases from the agricultural sector by businesses in the food, beverage and tobacco sector came from Cypriot suppliers. This suggests that hotels source proportionately less of their purchases of food and beverages from Cypriot producers than the national average.

Environment Impact

• This impact of greenhouse gas emissions generated by the hotels comes at a total cost of $1.5 million per year (or $2.76 per guest night), 40% of which is attributable to the indirect and induced impacts. Although not part of the study, the direct emissions associated with tourists’ flights to and from Cyprus would have contributed an additional environmental cost of nearly $2.1 million per year. If included in scope, the total environmental cost would increase to $4.6 million. Flights would account for more than 80% of this, and would be greater than the total greenhouse gas impact of the eight hotels ($1.5 million).
• On average, the hotels generated 1.8kg of waste per guest per night which exceeds the average Cypriot resident (1.4kg of waste per day). The hotels recycled 25% of their waste in 2013, which is slightly more than the Cypriot average of 20% in 2010 (the last year for which data are available). More significantly, 25kg of waste per guest night is produced in the supply chains of the hotel and other services the guests use in Cyprus.
• On average, the eight hotels used around 340 liters of water per guest night in 2013. Although this is less than the goal set by TUI Group of 400 liters per guest, it is more than the average Cypriot resident uses (264 liters per day).

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