08:08 EST, 29 March 2013
08:08 EST, 29 March 2013
Britons could see the cost of holidays in Cyprus drop as a result of its economic difficulties.
As anxious Cypriots patiently waited in long lines to take out their money yesterday following the reopening of banks after nearly two weeks, the world waited to see how events would unfold.
Banks have been shut in Cyprus since March 16 to prevent people from draining their accounts as politicians scrambled to save the country’s stricken financial sector. ATM machines were working, but with a limit on daily withdrawals.
Crystal clear: Cyprus is described by its tourist board as a year-round destination
According to TravelWeekly.co.uk, industry analyst GfK said there had been a 43 per cent year-on-year drop in summer bookings to Cyprus last week.
Although Noel Josephides, managing director of Sunvil Holidays, said the company had not seen any cancellations and he doubted whether Cyprus’ troubles would affect tourism in the long term.
Speaking to TravelMail, and referring to local costs, Mr Josephides said that “Cyprus prices will come down” in the wake of the crisis, which has seen an international bailout to save the country’s financial system. He added: “If bookings don’t pick up, there’ll be a lot of discounts.”
And he told the Guardian: “Cyprus as a
destination has always been that bit more expensive, and hasn’t been
able to compete on price with Turkey, Spain or Portugal. After it joined
the euro, prices started to get ridiculous, with a coffee costing €4
Orderly: People queue outside a Laiki bank branch as a man receives money from an ATM machine in Nicosia today
Mr Josephides drew a parallel with Greece, which has seen its own financial strife in recent times.
“With Greece, the difference is that there were lots of violent demonstrations. That put people off,” said Mr Josephides.
Once they had an election, he said, there was an “almighty” rush in terms of bookings.
Last year, British holidaymakers were being offered large discounts on peak summer packages as travel firms tried to tempt tourists back to the country.
Popular: Around one million British nationals visit each year
Earlier this week, the FCO and ABTA, the Travel Association, advised travellers to take some euros to Cyprus to cover their expenses.
ABTA said it was so visitors were “not reliant on one form of payment”.
Although banks are now open, the Mediterranean island has imposed daily withdrawal limits of 300 euros (£252) for individuals, fearing a run on lenders.
The limits on withdrawals and other capital controls are expected to be relaxed gradually. Foreign Minister Ioannis Kasoulides said that, according to central bank estimates, the controls would be fully lifted in a month. Some analysts say it could last longer.
As part of the country’s controls, no cheques can be cashed, although they can be deposited. Anyone leaving the country, whether Cypriot or a visitor, can only take up to 1,000 euros (£843) with them in cash.
The latest advice on the FCO’s website, updated yesterday, says: “Banks in the Republic of Cyprus have now re-opened. You can continue to use ATMs, debit and credit cards as normal.
“Limits have been imposed on withdrawals from Cypriot bank accounts, but this should not apply to withdrawals from UK or other foreign bank accounts.”
Rev Canon Derek G Smith of St Barnabus Church in Limassol said that tourists on the island are finding it surprising that they can still withdraw plenty of euros.
“A wedding couple from England were struck that they could get hundreds of pounds out of an ATM, but locals could only get 100 or 120,” he said.
He added that it was currently an “excellent time” to holiday in Cyprus: “Deals for flights and for accommodation are out there, and ATMs are working well for UK debit cards.”