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The banking crisis in Cyprus has struck just as tens of thousands of British (and other) holidaymakers are preparing for their trips to the island. Should you stay or go? If you stay, what are your rights? And if you go, how should you cope financially? Simon Calder offers advice.
Q: There are thousands of British holidaymakers in Cyprus right now. How will this crisis affect them?
A: Right now it’s uncomfortable for anyone relying upon plastic – because the banking system has basically frozen. People who haven’t brought enough cash with them to Cyprus could find themselves encountering problems – though if you’re with a British tour operator they should be able to make arrangements to ensure you can get meals and excursions paying with UK-issued plastic.
Q: For holidaymakers who are booked to travel but no longer want to go – what’s your advice?
A: Don’t cancel. You could well lose some or all of the money you have already paid. I cannot envisage circumstances in which a holiday company or airline would offer refunds, because Cyprus remains a safe place to travel. It is not inconceivable that some holiday companies may offer the chance to switch to a different destination, but they have no obligation to do so. Besides, it’s a great country and despite the problems, holidays should proceed normally.
Q: What should people do in terms of holiday spending?
A: Take cash. In trading terms Cyprus could, temporarily, be going back to the Stone Age. Given the crisis, traders – anyone from taxi drivers to restaurant owners – may insist on cash rather than accepting plastic, on the basis that who knows what might happen to money that goes to the bank?
Q: The Foreign Office has told travellers to “Check with your bank for further information”, and “Take different forms of payment with you to ensure you have access to adequate funds (such as pounds, euros, credit/debit cards)”. Do you agree?
A: No. I followed the recommendation and contacted my (normally helpful) bank, asking for advice for a forthcoming trip to Cyprus. It proved a complete waste of time. They patiently explained the fee for drawing cash from ATMs. When I pointed out that the ATMs might well not be working, I was told: “We can’t really give you advice”. As the conversation continued, they suggested I might want to take travellers’ cheques – perhaps the least useful travel advice I have been offered in years.
In terms of the advice about £s, €s and plastic: I would take euros in cash, and some sterling as back-up, but I would not rely on credit or debit cards. I don’t imagine every Cypriot merchant is likely to welcome a form of payment that has to be processed through the island’s banking system.
Q: If there is a massive run on the Cypriot banks, will holiday firms and airlines be affected?
A: No. It is unlikely that any UK travel company will have large deposits in Cypriot banks. Payments from British holiday firms to Cypriot suppliers – such as hotels and coach companies – are unlikely to be affected.
Q: Tourism is a huge part of the Cypriot economy – how will this affect it?
A: British and Russian holidaymakers together account for a large slab of the tourism industry, and both are pretty immune to crises. Indeed I think there could be some bargains if cancellations begin from other nationalities. I’m actively looking for a holiday in May, because I hope there will be some good deals.