Sector Analysis in N. Cyprus-Tourism

S ector analysis
Sector analysis
iin
n North
North Cyprus
Cyprus -
Tourism
Tourism
Tufan E
Tufan kici
Ekici
G izem C
Gizem aner
Caner
beach photo cover PRIO.qxp 02/04/2019 12:52 PM Page 1
About the Authors

Gizem Caner born in Cyprus, Gizem earned her PhD from Istanbul Technical University, in
Urban and Regional Planning, with an emphasis on the spatiality of conflict, multiculturalism,
and post-conflict planning. As part of her professional experiences, she acted as the Assistant
Project Coordinator of the planning division for the Istanbul Financial Centre project (2012-
2013). She also took part in several major urban regeneration projects (2005-2009) and master
planning activities (2012-2013) of numerous Istanbul districts, mainly focusing on disaster risk
management and risk sensitive land use/master planning. She was involved in a capacity-
building exercise for Gaza and the West Bank (2015), under the joint forces of UNDP, UN-Habitat,
and ISOCARP, also working as an editor for the third issue of the Plan Magazine (Publisher:
ISOCARP, 2015-2016), which conveyed the results. Currently she is working as an instructor at
the Cyprus International University, Department of Architecture. Her recent research interests
revolve around post-conflict planning, divided/contested cities, urban/local governance and
Nicosia/Cyprus.
Tufan Ekici is a quantitative social scientist with a background in economics. He has worked
in academia teaching economics and conducting empirical research in various social science
disciplines. He has also been involved in consulting local governments and professional
organizations in north Cyprus as well as working for private financial institutions in the USA
and the UK. After 12 years of working in north Cyprus, Ekici relocated to the United States in
2018. He is the author of the forthcoming book "The Political and Economic History of North
Cyprus: A Discordant Polity".
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toUriSM
Tufan Ekici
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Gizem Caner
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CONTENTS
1. Overview.................................................................................................................................................. 3
2. Supply and demand fOr TOuriSm ServiceS in nOrTh cypruS [1974-2000] .............. 5
2.1. a brief Overview Of TOuriSm develOpmenTS befOre 1974 ................................... 7
2.2. TOuriST develOpmenTS afTer The 1974 diviSiOn: 1974-1983 ................................. 9
2.3. early yearS Of The new STaTe: 1984-2000 .................................................................... 13
3. The new millennium: 2001-preSenT .........................................................................................19
3.1. The demand ................................................................................................................................19
3.1.1. number Of TOuriSTS .................................................................................................. 19
3.1.1. duraTiOn Of STay ........................................................................................................ 21
3.1.2. chOice Of hOTel Type ................................................................................................ 22
3.2. The Supply ................................................................................................................................... 24
3.2.1. number Of TOuriST eSTabliShmenTS, bed capaciTy
and Occupancy raTeS .............................................................................................. 24
3.2.2. Type Of TOuriST accOmmOdaTiOnS ................................................................... 26
3.2.3. cOmpeTiTiOn in The markeT ................................................................................... 28
4. a GeOGraphical Overview .......................................................................................................... 31
5. cOnTribuTiOn Of The SecTOr TO The Overall ecOnOmy .............................................. 35
5.1. GrOSS dOmeSTic prOducT (Gdp) ...................................................................................... 35
5.2. emplOymenT .............................................................................................................................. 38
5.3. GOvernmenT incenTiveS and bank crediTS fOr TOuriSm .................................. 41
6. caSinOS .................................................................................................................................................. 45
7. cOncluSiOn ......................................................................................................................................... 48
8. referenceS ........................................................................................................................................... 50
9. appendix a ............................................................................................................................................ 51
10. appendix b ............................................................................................................................................ 51
3
1. OVERVIEW
T
he contribution of the tourism sector to the aggregate economy in North Cyprus has
shown some fluctuations over the years. In the early years after the island’s division in
1974, the North Cyprus tourism sector was not very profitable even though an
important share of the country’s tourist accommodations were located in the north.
Prohibition of direct flights from countries other than Turkey increased the cost for tourists,
lowering tourist demand. Furthermore, the Varosha area was never opened for public use,
even though it was the most popular tourist attraction before separation. However, during
the 1990s, as a result of the increasing numbers of tourists from Turkey, this sector became
more important for the economy. Later, in the new millennium, the tourism sector
transformed into a “gambling” sector, where large and luxurious hotels with casinos started
replacing smaller holiday villages. This brought “tourists” to North Cyprus throughout the year
rather than just during the summer period.
Throughout this report, the word tourist refers to those who enter the island for the
purpose of holiday, or short-term business/education or other visiting purposes. Students,
military personnel and foreigners who have permanent work permits are not included in
these numbers. However, it should be borne in mind that this distinction was not very clear
in the early years of the republic in the North, when people would enter as “tourists” but
conduct businesses and/ or remain illegally; at the time there were no mechanisms to force
them out. Today, this problem still continues but to a lesser extent. Thus, in this report we will
use the number of tourists who actually stayed at tourist accommodations as a measure of
potential tourist supply and try to avoid using the figures for “foreign entries” as a data source,
although we also report these numbers at the end.
In 2003, a more pressing problem emerged when the borders between the north and the
south of the island were partially removed. First, and importantly, an increasing number of
tourists who stayed in the north used the airports in the south to enter the island, compli-
cating data collection and processing. UK-based Turkish Cypriots, for example, constitute an
important share of this group, but there are also other foreign groups who prefer this route
and thus should be included in the total tourist numbers. On the other hand, there are tourist
agencies in the south who bring tourists to the north for daily tours, and also some people
who cross the borders for their convenience connecting the west of the island with the
capital city. This kind of “tourist” does not contribute much to the tourism industry in the
4 Sector Analysis – Tourism
north and should not be included in the official statistics. But the exact number of whose who
actually stay cannot be known and, hence, it would not be informative to insist on their
inclusion in the official numbers. With such caveats regarding the official numbers in mind,
we analyze the evolution of supply and demand in this sector.
This report is organized as follows. The next section examines the history of the tourism
sector in North Cyprus (Chapter 2) according to three time periods: before the separation
(pre-1974), the early years of the breakaway state (1974-1983), and from 1983 until the end
of the century (1983-2000). The third section evaluates the developments that the sector
experienced in the new millennium (2000-2015), and the fourth chapter looks at the
geographical distribution of tourist establishments. Chapter five considers the contribution
of the sector to the overall economy, while chapter six focuses on the casinos and how they
have changed the face of this sector. We conclude the report with policy recommendations
for the present as well as for the future, including possible challenges in a reunited Cyprus.
5
2. SUPPLY AND DEMAND FOR TOURISM

SERVICES IN NORTH CYPRUS [1974-2000]
2.1. A brief overview of tourism developments before 1974

Being an island with many beautiful beaches and plentiful sunshine, Cyprus has been an
important tourist destination for many years. Policymakers have recognized this and govern-
ments have tried to make the most of these advantages to attract more tourists to the island
and so increase the revenues. A 1962 report prepared jointly by the Republic of Cyprus and
France concerning tourist development in Cyprus attests to the long-standing recognition of
the importance of this sector. Naturally, this early report analyzes Cyprus as a whole and
investigates development opportunities on both sides of the now-divided island, and in this
section we analyze the developments in the tourism industry in Cyprus up until 1974.
The island of Cyprus is a popular tourist destination for many reasons; in the 1960s the key
drawing points were the climate, the beaches, and the island’s archeological riches. The total
number of foreign visitors to Cyprus increased from 18,244 in 1950 to 40,140 in 1961, greatly
fluctuating in between due to the events of 1956-1958 (Beaudouin et. al., 1962: 52). Visitors
from England have traditionally made up a major share of Cyprus’s tourists, but from the 1960s
onwards Israeli tourist numbers overtook the British. While most visitors tended to visit in the
summer months, there were significant numbers of tourists throughout the year as well. The
total nights spent by tourists and average occupancy rates for 1961 are provided in Table 2.1.
table 2.1 – total nights stayed by tourists and average hotel occupancy rates by district, 1961
city Bed nights Av. occupancy rate

Nicosia 88,700 30.0%
Limassol 31,530 66.5%
Famagusta 29,380 25.0%
Larnaca 5,430 34.0%
Kyrenia 30,830 36.0%
Paphos 4,730 19.0%
Towns 190,600 31.5%
Others 27,500 6.7%
Source: beaudoin, et al. (1962: 64)
The supply of tourist accommodation shows an increasing trend in the period leading up
to the division of the island. In 1950 Cyprus had 1,672 beds with 53% of these in the
mountains (Beaudoin, et al., 1962). However, by 1961 there were 2,826 beds, and less than
40% were in the mountainous regions. This shows that the traditional small accommodations
were being replaced by hotels in the major cities next to the beaches. Table 2.2 shows the
distribution of luxury, 1st and 2nd class hotels in 1960 (1961) and 1974. A notable increase
can be observed in Famagusta, owing primarily to development of the Varosha region.
Varosha was first developed to cater to the British serviceman and their families living in the
nearby British Sovereign bases (Martin, 1993). The average occupancy rates were rather low
in all the establishments due to seasonal fluctuations— high in summer periods and very low
during the winter. It was calculated that the tourism income in 1961 was 4.8% of GNP, where
each foreign visitor was expected to spend 65 pounds on average for a seven-day stay on the
island (Beaudoin, et al., 1962).
table 2.2 – total bed capacity by region, 1960, 1961 and 1974
city 1950 1960 (1961) 19741

Nicosia 993 (835) 2274
Limassol 200 (132) 1,565
Larnaca 44 (45) 304
Famagusta 457 (324) 9,709
Kyrenia 292 (282) 2,964
Paphos 116 (69) 379
Hill Resorts 1,704 (1687) 1,997
Total 1,672 3,806 (2826) 19,192
Source: a. andronikou, development of Tourism in cyprus, pp. 26-27. The numbers for 1961 in parenthesis
and the total for 1950 are taken from beaudoin, et al. (1962).
The evolution of tourist numbers is shown in Figure 2.1. Except for the sharp decreases in
1963-64 and then in 1973-74, which time periods mark the beginning and the end of the bi-
communal conflict, the number of tourists has continuously increased. According to a study
by the Statistics and Research Department of the Republic of Cyprus, the average tourist stay
in 1972 was 12.8 days and almost half of these tourists stayed in Varosha (Yesilada, 1994: 24).
The same source also indicates that for that year the daily average for tourist spending was
82 Cyprus pounds.
1 Annual Abstracts, Department of Statistics, Cyprus Tourist Organisation and processing of data by Planning Bureau.
2. Supply and demand for Tourism Services in north cyprus [1974-2000] 7
Figure 2.1 – number of tourists, 1960-1974
300
250
200
150
100
50
0
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
Source: cyprus Tourism Organization, data supplied by Symeon matsis. The vertical axis is measured in 1000s
The report on tourist development in the 1960s has important implications for today as
well. The civil conflict in Cyprus started at the end of 1963 and lasted until 1974, meaning that
the proposals in this plan could only be partially executed. After the island’s division in 1974,
both sides realized the importance of tourism and each side implemented its own plans for
development. This report shows us that a substantial number of accommodations (in terms
of bed capacity) remained in the northern part of the island, while the south retained control
of the mountainous regions - which according to this report had become less popular in
terms of tourism by the early 1960s. Thus we can say that the North had the advantage in
terms of supply of touristic accommodations. However, the means of utilizing this advantage
is another story and we will try to tackle this issue in our report.
table 2.3 – Foreign exchange earnings and bed capacities, 1960-1974
number Hotel bed Foreign exchange Foreign exchange

of tourists capacity earnings earnings (%) GDP
(000s) (nos) (€million) current prices
1960 24,300 4,301 3.1 2.0
1961 38,400 4,306 4.8 2.8
1962 48,100 4,682 6.0 3.1
1963 70,400 5,249 7.7 3.8
1964 13,300 5,484 1.7 0.9
1965 30,000 6,006 3.8 1.6
1966 51,100 6,020 6.1 2.4
1967 68,400 6,379 7.3 2.5
1968 88,500 6,612 9.9 3.2
1969 118,000 7,244 13.3 3.7
1970 126,600 8,311 13.8 3.6
1971 178,600 10,151` 23.2 5.2
1972 228,300 10,783 32.7 6.5
1973 264,100 16,988 40.7 7.2
1974 150,500 19,1922 23.7 4.6
Sources: annual abstracts department of Statistics and cTO; data processed by the planning bureau and
provided by Symeon matsis
Before we analyze the development of tourism in North Cyprus, it is important to note the
role of Turkish Cypriots in this sector before 1974. The events of 1963-64 and 1967 had
already caused tension between the Cypriots, Greek- and Turkish-, and resulted in forcing the
minority Turkish Cypriots into their own, often isolated, regions. There were not many wealthy
Turkish Cypriots who owned hotels or other tourist establishments to begin with, thus they
were not a major actor in this sector. Martin (1993) cites only a handful of Turkish Cypriot
entrepreneurs at the time who owned significant hotel-type accommodations and operated
under political pressure.3 Most of the Turkish Cypriot owned tourist establishments were
small scale and mainly served domestic tourists. This indicates that Turkish Cypriots were not
experienced in running hotels of an international caliber, which would prove to be a handicap
following the separation in 1974.
2 The published data on the number of hotels and other tourist facilities for 1974 have been revised on the basis of
subsequent information and surveys recording how many hotels were completed and had started operating before
July 1974. Note also, that in 1974 there were many new hotels under construction. Surveys showed that the number of
beds in the hotels under construction exceeded 3,600 (S. Matsis, personal correspondence).
3 According to Martin ( 1993: 342), the owner of the Celebrity Hotel was obliged to take on a 50% Greek partner, who
would not invest any capital but would receive half of the profits.
2.2. tourist developments after the 1974 division: 1974-1983

Following the island’s division in 1974, there were a substantial number of hotels located in
the North, although some of these had been partially or completely destroyed during the
war. We use several sources to make an estimate of the total number of beds that remained
in the northern part. According to our estimates, there were 73 hotels with a total bed capacity
of 13,122, which represents around 68% of the total bed capacity on the entire island prior
to the separation. However, around 40 of these were in the Varosha region (approximately
6,544 beds) and they have never been utilized by the breakaway state in the North. There
were also some hotels that were under construction during the 1974 events and were not
completed before the separation. This puts the total maximum bed capacity in the North in
1975 (excluding Varosha) at around 3600.4 The actual number that could be used for tourist
accommodation was probably less, but we don’t have exact figures.
table 2.4 – Hotel bed capacity by region, 1974-1975
Districts and mountain areas 1974 1975

No. of beds % share No. of beds % share No. outside RoC
Nicosia 2,274 11.8 1,699 29.9 575
Kyrenia 2,964 15.4 - - 2,964
Limassol 1,565 8.2 1,526 26.8
Larnaca 304 1.6 70 1.2
Famagusta 9,709 50.6 126 2,2 9,583
Paphos 379 2.0 400 7.0
Mountain resorts 1,997 10.4 1,864 32.8
Total 19,192 100.0 5,685 100.0 13,507
Source: annual abstracts, department of Statistics, cyprus Tourist Organisation and data processing by the
planning bureau. data provided by Symeon matsis. The numbers for 1974 and 1975 correspond to the hotels
existing or under construction as of, respectively, June 1973 and may 1974. Thus these numbers may not include
the hotels that were unfinished at the time of or damaged during the war of July 1974. included are the hotels
that were under united nations control (such as the ledra palace hotel, which had a bed capacity of 390).
Although our various sources report different tourist bed capacities, it is fair to say that a
significant number of hotels/beds were now under the control of the Turkish Cypriot
authorities. As mentioned earlier, Varosha—which contained most of the bed capacity and
was a major tourist area right before the war—was closed by the authorities in the North and
4 The official bed capacity released by the SPO in the North for 1977 was 3,265. Yesilada (1994) calculates that there were
around 6,000 beds in the North after the division (excluding the Varosha area) and claims that there were around 36
small-to-medium size establishments (with a bed capacity of around 3,000) that were being used out of purpose, and
another six large, uncompleted hotels (with a bed capacity of around 2,000) that could be added to the tourism sector
of the North as of 1974 (p. 60).
it has remained closed and unused to this day.5 The state, unable to manage other available
tourist accommodations, sought help from Turkey. This resulted in the establishment of the
Cyprus Turkish Tourism Establishment (CTTE) and Cyprus Turkish Airlines (CTA).6 At the same
time, the state started to implement development plans for the entire economy with indi-
vidual solutions for each sector. Tourism was acknowledged as a key sector that could
contribute to the economic development of the newly established state. In this section we
review how this sector evolved between 1974-1983.
The first five-year development plan for this sector covered the period from 1978 to 1982,
and set very optimistic goals: to reach 243,015 tourists, 8098 beds and $15.2 million gross
tourism income from foreign tourists by the end of 1982 (Yesilada, 1994:342). Given that in
1973 the total number of tourists was around 264,000 when there were about 17,000 beds
(see Table 2.3), we must wonder how the state targeted about the same number of tourists
for 1982 with half of the bed capacity. Not surprisingly, not even half of the tourist and bed
capacity targets were achieved by 1983. Yesilada (1994) cites the deficiencies in the number
of qualified personnel, infrastructure and air transportation as possible factors contributing
to the decline of this sector during this period. Furthermore, the inability of the parliament to
pass the related regulations worsened the situation.
Table 2.5 shows the total number of tourist arrivals and departures for 1979-1984. It is
interesting to note that there are fewer departures than arrivals except in 1982 and 1983. This
could simply be due to tourist entries in December, but it could also be due to the large number
of immigrants from Turkey who began to arrive on the island after the division and were later
given TRNC citizenship.7 The total number of nights spent in tourist accommodations shows a
decreasing trend until 1982, while the average hotel stay is also very low, at around 1.5 nights.
table 2.5 – number of tourists and bed nights, 1979-1984
tourist tourist total tourist Bed Average

year Arrivals Departures Departures nights night
1979 108401 105663 152521 82282 1.3
1980 84511 82809 136054 55796 1.5
1981 78134 79428 131799 52343 1.5
1982 87629 88697 140461 52903 1.7
1983 98934 96686 157346 64174 1.5
1984 113114 109247 165719 73651 1.5
Source: Statistical yearbook of 1984, SpO; “average night” is calculated by dividing the total tourist arrivals
with total bed nights
5 This area has been under the control of the Turkish military since the separation and is closed to public access.
6 The CTTE was established as a state economic enterprise after the 1974 division, where half of the shares were owned
by the state in the North, and the other half by five State Economic Enterprises (SEE) from Turkey. The purpose of this
establishment was to manage (on its own or with a partner) or rent the tourist establishments that remained in the
North after the bi-communal conflict (Yesilada, 1994: 44)
7 See Hatay (2005) for a detailed discussion on the number of immigrants from Turkey who were given TRNC citizenship.
Table 2.6 shows the distribution of tourists according to purpose of stay. Until 1983
around 80% of tourists came to the island for holidays. This percentage decreased to 70% in
1984 when 23% came for “Other” reasons, which category probably includes Turkish visitors
who were coming to the island to conduct illegal businesses,8 or those who were sent to stay
on the island and work but were originally given tourist visas.
table 2.6 – Percentage of tourists by reason for travel (1979-1984)
year Holiday Business other

1979 79.4% 4.2% 16.4%
1980 81.0% 4.5% 14.5%
1981 79.3% 5.1% 15.5%
1982 82.7% 3.4% 13.8%
1983 78.8% 5.8% 15.4%
1984 69.7% 7.5% 22.9%
Source: Statistical yearbook of 1984, SpO
The type of establishments preferred by tourists are shown in table 2.7. pansiyons (guest-
houses) are basically lower scale, inexpensive, hostel-type accommodations that can
accommodate several people in the same room and usually operate “under the table” (Martin,
1983). In other words, it is unlikely that the people who stayed in pansiyons contributed much
to tourist income. The “other” category probably includes own houses or houses of relatives,
which are the first choices of Turkish Cypriots who live in the UK and visit their relatives in the
summer time. Only half of the tourists in this period chose to stay in hotels.
table 2.7 – Percentage of tourists by type of accommodation (1979-1984)
year Hotel tourist Apt Pansiyon other

1979 68.9% 3.4% 2.2% 25.5%
1980 55.3% 3.4% 14.3% 27.0%
1981 53.3% 4.5% 3.5% 38.7%
1982 50.6% 6.1% 5.7% 37.7%
1983 43.0% 7.9% 15.5% 33.6%
1984 49.7% 12.1% 9.6% 28.6%
8 The prices of some retail products, especially clothing, were much cheaper than in Turkey during this time period, thus
many merchants would come to North Cyprus to purchase these items and take them back to Turkey for resale. They
did this with whatever they could carry in their suitcases. Hence the name “suitcase trading” (bavul ticareti).
The duration of stay is provided below (see Table 2.8). The percentage of people who stay
longer has increased over the years, but this should not be interpreted as positive news for
the tourism industry. In fact, the average hotel stay went down from 5.7 days in 1979 to 4.6
by 1985 (Yesilada, 1994: 369). Hence, the longer stays are probably those of groups conducting
business on the island or the British-Turkish Cypriots visiting relatives. Without more infor-
mation on the type of tourists, it is hard to comment on the impact on the overall economy.
table 2.8 – Duration of tourist stays
Days 1-3 Days 4-7 Days 8-15 Days 16-30 Days 31+
1979 6.4% 46.1% 27.1% 12.1% 8.5%
1980 7.6% 35.0% 29.6% 15.4% 12.5%
1981 11.7% 32.2% 28.1% 14.5% 13.5%
1982 9.8% 33.6% 28.6% 15.5% 12.5%
1983 9.3% 27.2% 22.6% 18.9% 22.0%
1984 3.3% 8.6% 17.9% 25.6% 44.7%
Table 2.9 shows the distribution of tourists by different age groups. There is an important
increase in the 25-29 age group from 1982 to 1984, while there was a decreasing trend in the
numbers of children (0-14) and the elderly (65+) during the five years shown on the table. This
indicates that the type of tourists switched from family to single young adults.
table 2.9 – number of tourists by age category (1979-1984)
year 0-14 15-19 20-24 25-29 30-44 45-64 65+

1979 3929 8658 15176 17342 33432 26085 3774
1980 2996 5940 11283 13480 28141 19512 3159
1981 2967 5850 10497 12192 25005 18554 3069
1982 2976 6198 10547 13879 29653 21156 3220
1983 4771 7304 12196 16694 33355 21880 2734
1984 2416 6659 15371 30893 37343 18889 1543
This section has briefly shown the development of the tourism sector in the north of
Cyprus during the first 10 years of the bi-communal conflict and division. Although we have
only litle data for 1975-1979, the later period, from 1979 until 1984, shows that this sector was
unable to achieve its true potential. Notwithstanding, some attempts were made to
jumpstart the sector (establishment of CTTE and rebuilding of some of the large hotels);
however, these initiatives were unsuccessful and tourism mainly consisted of people who
migrated from Turkey or came to North Cyprus for business purposes. Hope for improving
economic conditions was renewed when the new republic was established in the north.
2.3. early years of the new state: 1984-2000

After the establishment of the breakaway state in the north in 1983, the popularity of the
north increased in Turkey but decreased elsewhere. Visitors from Turkey chose North Cyprus
due to its proximity, language familiarity and lack of visa requirements. However some
“tourists” came to the north to conduct business, buying goods cheaply and reselling them
at a profit in Turkey (see footnote 7). On the other hand, foreign tourists were less interested
in visiting the north as there were no longer direct flights —increasing flight time as well
as the cost of travel. Furthermore, the RoC’s campaign discouraging foreign travel to
the “occupied territories” contributed to the decline of tourism in the north (Martin, 1993).
However there was still an important tourist market nearby, and the officials in the North
were eager to exploit the situation.
The new government realized the importance of tourism and its potential impact on the
nation’s economic development. After the unsuccessful five-year development plan of 1978-
1982, the government initiated annual “transitional programs” between 1983 and 1987.
Besides the optimistic targets regarding the tourist number and revenues, the plans also
recognized the obstacles posed by (lack of) transportation and included steps to purchase
state-owned airplanes and to implement charter flights to the North.9 Unfortunately,
however, the targets set in the development plans failed significantly.
Actual net tourism income were also very under the target and actual outcomes of
several items in both the transitional plan and the second five-year development plan. Bed
capacity targets were never met but projected tourist numbers were either surpassed or
almost met. Net tourism income targets were also very under the target - except in the last
transition year (1987) and the end of the second five-year plan. As we will see, the third five-
year development plan did not fare any better.
9 Until this time, CTA was using the planes owned by Turkish Airlines.
table 2.10 – targets and actual outcomes of transitional and development plans
target Actual Difference

1983 Net Tourism Income 67.6 37.1 -45.1%
Number of Tourists 98934
Number of Beds 3555
Number of Tourists 114111 113318 -0.7%
Number of Beds 3687
Number of Tourists 126985 125075 -1.5%
Number of Beds 4104 3687 -10.2%
1986 Net Tourism Income 52
Number of Tourists 121250 131492 8.4%
Number of Beds 4500 3715 -17.4%
1987 Net Tourism Income 91.1 103.5 13.6%
Number of Beds 4398 3779 -14.1%
1988-1992 Net Tourism Income 144.97 175.1 20.8%
Number of Beds 10433 6630 -36.5%
Source: yesilada (1994). “net Tourism income” is reported as $million. for 1988-1992, target and actual
corresponds to the end of the program values (1992). a negative difference indicates that the actual outcome
was less than the target.
The third five-year development plan covered the period 1993-1997. Similar to the previous
two plans, it included very optimistic targets for different sectors. Regarding tourism, the plan
had the following statement:
in order for tourism, a priority sector in this economy, to influence the future of the
economy positively, sustainable tourism policies that are in balance with environmental
and anthropological sensitivities and economic gains; that are in accordance with social,
political and economic circumstances governing the world and the region; and that are
able to protect own resources for long term usage are to be developed.10
(SPO, Third five-year development plan, p. 326)
The table below, Table 2.11, shows some of the goals this plan set for the tourism industry
for the year 1997. As we can see, not all the targets were met. Targets for employment and
Turkish tourists were exceeded, but those for foreign tourists and total bed capacity were not
met. More importantly, the number of tourists who stayed at hotels also proved lower than
10 Translation by the authors.

targeted, thereby reducing the actual net tourism income. This reaffirms that it is foreign
tourists who are the main contributors to income from tourism, suggesting that policies in
this sector should focus on attracting foreign tourists.
table 2.11 – comparison of targets for the tourism industry

set by the third 5-year development plan
1992 1997 (target) 1997 (actual)

Employment 1863 2606 2757
Turkish Tourists 186647 280800 326364
Foreign Tourists 55859 151200 73000
Tourists stay at hotels 91757 268920 205248
Average duration of stay 5.0 6.0 4.7
Number of Beds 7000 10000 8940
Net Tourism Income $160.8million $236.3million $183.2million
Source: Third five-year development plan, SpO
Whether or not the development plans were executed properly, the growth of this sector
between 1983 and 2000 is important, and we will try to summarize it by using official
statistics. We start with the numbers on the supply of tourists. Figure 2.2 below shows the
percentage of Turkish and other foreign tourists during 1983-2000. As we can see, the
majority (around 80%) of tourists were from Turkey. However the definition of a tourist during
this period was very loose, and entry regulations were very relaxed. Furthermore, as we
discussed above, many Turkish visitors would be admitted to the island under a tourist visa,
although many would stay longer and conduct non-tourist activities.
Figure 2.2 – Distribution of turkish and Foreign tourists (1983-2000)
100%
90%
80%
70%
60%
50% F
Foreign
oreign
40%
Turkish
Turkish
30%
20%
10%
0%
84
91
94
83
85
86
87
88
89
90
92
93
95
96
97
98
99
00
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
Source: SpO
Figure 2.3 shows the growth of total beds at tourist establishments (including hotels and
apartments). Although the supply of tourist beds increased during this period (with only a
very slight decrease in 1985 and 1995), growth was not steady. The latter 1980s experienced
less than 5% growth in supply, whereas during 1988-1993 growth was at least 6% and
between 1989-1990 there was a 16% increase. Average annual increase in tourist beds during
this period was around 6%.
Figure 2.3 – Annual Growth rate of total Bed capacity at tourist establishments
18,0%
16,0%
14,0%
12,0%
10,0%
8,0%
6,0%
4,0%
2,0%
0,0%
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
-2,0%
Source: SpO
Table 2.12 portrays the demand for hotel beds for 1983-2000, as well the total bed supply
for the same time period. These numbers do not include local tourists. Although Turkish
tourist numbers are almost four times higher than other foreign tourists, the total numbers
who stayed at hotels is only twice as high (and almost identical in 1994 and 1995). Also, the
average length of stay is twice as high for foreign tourists compared to Turkish tourists (no
data on this before 1993). Once again, these numbers indicate that foreign tourists spend
more time in tourist accommodations, and thus contribute more, and more directly, to the
sector. But given the large volume of Turkish tourists and their spending in related industries,
the total contributions cannot exactly be compared.
table 2.12 – number of tourists who actually stayed at hotels and average nights
Hotel Guest occupancy Average nights total Bed

capacity
Turkish Foreign Total Turkish Foreign Total
1983 64174 6 3952
1984 73651 4.7 4133
1985 65652 4.6 4120
1986 61099 5 4173
1987 96173 5.5 4352
1988 111086 5.2 4569
1989 108453 5.5 5254
1990 82338 7.3 6125
1991 80067 5.1 6633
1992 112264 5.8 7087
1993 95625 47902 143527 4.6 8.8 5.8 7462
1994 84322 75376 159698 3.6 7.6 5.2 7814
1995 98973 72710 171683 3.6 7.6 4.9 7774
1996 81199 58439 139638 3.6 7.9 5.0 8267
1997 119336 58161 177497 3.6 8.1 4.7 8940
1998 129151 66085 195236 3.6 7 4.4 9365
1999 149874 65227 215101 3.6 7.5 4.5 9932
2000 171324 65912 237236 3.4 7.7 4.5 10520
2001 146185 66047 212232 3.1 7.8 4.4 10798
2002 181068 89877 270945 3.2 7.3 4.4 10916
Source: The data for 1983-1993 supplied by yesilada (1994); the remainder is taken from the Statistical
yearbook of Tourism (2002). Total bed capacity also includes guesthouses.
Total bed capacity also increased continuously during this period. The distribution of beds
by different hotel category is shown in Table 2.13. During 1990s, 3- and 4-star hotels
controlled most of the market in terms of total bed capacity, corresponding to around 60-
65% of the total. However, the ratio of hotels in these two categories was rather small at
around 30%, which is probably not sufficient to conclude that the market was not
competitive enough.11 Towards the end of the millennium, on the other hand, this
distribution was altered when the number of 5-star hotels increased. By 2000, the share of 3-
and 4-star hotels dropped to 48% even though their numbers increased. The new millennium
favored five-star hotels in North Cyprus.
11 See section 3.2.3 for a discussion on market competition.

table 2.13 – total bed capacity and number of establishments by category, 1993-2000
year 1 Star 2 Stars 3 Stars 4 Stars 5 Stars

1993 572 (20) 1383 (28) 2534 (18) 2024 (5) 504 (3)
1994 596 (20) 1417 (27) 2642 (19) 2024 (5) 504 (3)
1995 802 (24) 1521 (28) 2602 (19) 2024 (5) 504 (2)
1996 1255 (36) 1142 (20) 2584 (17) 2336 (6) 504 (2)
1997 1320 (36) 1500 (23) 2486 (18) 2694 (8) 504 (2)
1998 1240 (35) 1458 (23) 2758 (23) 2992 (9) 504 (2)
1999 1405 (39) 1742 (27) 2850 (23) 3172 (9) 324 (2)
2000 1287 (36) 2088 (31) 2786 (23) 2324 (9) 1728 (4)
note: The numbers in parenthesis are the number of establishments in that category. Other establishments
such as guesthouses and holiday villages are not included in this table, thus the totals may not represent the
total supply of tourist beds.
Source: Statistical yearbook of Tourism, Table 9 (2002)
The development of tourism in North Cyprus for the period 1983-2000 was not very
significant. Although tourist numbers and bed capacity steadily increased, progress in this
sector was less than expected despite the development plans and other measures taken by
the state. Policymakers continued to stress the importance of this sector to the overall
economy, while making promises-to-be-broken regarding necessary measures to be taken in
this sector. The saga continued into the new millennium.
19
3. THE NEW MILLENNIUM: 2001-PRESENT

Although policymakers in North Cyprus have realized the importance of tourism revenues for
the country’s economic development, political embargos and other domestic bureaucratic
deficiencies have prohibited this sector from achieving its true potential. We are going to see
in this section that tourist arrivals have continued to increase in recent years but the compo-
sition of visitors has changed considerably. In fact the popularity of this sector has decreased
to be replaced by higher education.12 This part of the report will have two major subsections.
The demand side will analyze the number of tourists and some of their specific characteristics.
The supply of tourism services will analyze the bed capacity and competitiveness of the
market in North Cyprus.
3.1. the demand

3.1.1. number of tourists
Table 3.1 shows the percentage of Turkish and foreign nationals who entered the country and
stayed at a hotel or other similar accommodation between 2000 and 2015. As we can see, on
average, only half of the Turkish tourists and around 70% of foreign tourists stay in tourist
establishments. This is mainly due to the fact that it is customary for Turkish tourists to stay
with their relatives (since there are significant numbers of university students and people
with work permits who belong to the Turkish community (see footnote 16 for numbers).
There is also however a significant percentage (around 30-35%) of foreign tourists who do
not stay at tourist accommodations. There are several possible explanations for this
mismatch. First of all, most TRNC nationals who live in the UK carry other kinds of passports.
Therefore when they enter the country, they are coded under “foreign”, while most own their
own homes or stay with relatives when they visit. This number represents about 8-10% of
total entrants.13 Another explanation could be that the number of entries through land
12 There has been an increasing trend over the last five years in terms of the number of universities and university
students. Past and present governments have publicly praised these developments and made promises to increase the
number of university students to 100,000, which is about one-third of the total population in the North. Policymakers
in the North see this sector (higher education) as having the potential to make a huge impact on the overall economy.
13 According to the most recent tourist exit survey results from the SPO (2011-2012).
borders are not included in the official tourist numbers.14 According to the Ministry of
Tourism website, there were around 2 million foreign entries annually from land crossing
points between 2013 and 2015.15 Even if only 10% of these actually stayed at tourist estab-
lishments in the North, this would increase the numbers in Table 3.1 substantially and cast
more doubt on the number of “shadow tourists”. Finally, although hotels are required to
report the number as well as the nationality of their guests to the appropriate offices, this is
neither controlled nor monitored. Thus, according to our interviews with several current
managers in this industry, it is possible that the nationalities of tourists (especially large groups
with different nationalities) are not entered correctly. All these can explain the discrepancy
between the total number of tourists and the number of those who stayed in hotels. With
these caveats in mind, we report in Table 3.1 the percentage of tourists who stayed at hotels
and their average length of stay for - both foreign and Turkish tourists.
table 3.1- Percentage of tourists who entered north cyprus and stayed at tourist
accommodations and the average length of stay (2000-2015)
turkish Foreign
% stayed at Average length % stayed Average length Foreign /
Year hotels of stay at hotels of stay Turkish Tourists
2000 49.3 3.4 77.3 7.7 38.7%
2001 52.6 3.1 75.6 7.8 45.6%
2002 57.3 3.2 82.2 7.3 50.3%
2003 48.8 3.6 63.5 7.7 49.7%
2004 37.4 3.8 68.7 7.3 69.4%
2005 35.1 3.6 77.3 6.8 74.2%
2006 39.3 3.0 70.5 5.7 44.8%
2007 41.8 2.9 67.8 5.3 40.0%
2008 48.8 2.9 65.5 5.0 32.6%
2009 47.7 2.9 70.6 5.4 37.5%
2010 45.3 3.2 67.5 5.7 32.2%
2011 49.1 3.2 70.8 6.0 39.8%
2012 50.8 3.1 70.2 6.2 40.0%
2013 50.3 3.1 67.7 6.5 45.1%
2014 51.9 3.0 65.1 6.0 42.4%
2015 52.9 3.0 63.3 5.4 40.1%
Source: Tourism planning Office Statistical yearbooks
14 The land borders were partially removed in 2003 and the crossings between the two sides of Cyprus began in April 2003.
15 The numbers in 2013, 2014 and 2015, respectively, are 1,814,708; 1, 981, 027; and 2, 057, 723.
3. The new millennium: 2001-present 21
Table 3.1 once again confirms that the raw number of total tourists should not be interpreted
as an actual impact on tourism industry. Although there are three or four times as many
Turkish tourists as foreign tourists, only half of those stay in tourist establishments, whereas
on average 75% of foreign tourists use such accommodations. Furthermore, foreign tourists
stay longer on average. Therefore policies should be targeted at attracting more foreign
tourists to ibring about a greater and more direct contribution to the sector. In fact, in the last
several years the government offered incentives to tour operators who bring foreign (non-
Turkish) tourists to the island by charter flights. Table 3.2 shows the impact of these incentives
on the supply of foreign tourists.
table 3.2 – charter Flights and tourist numbers, 2012-2014
year # of flights tourist total % of total foreign tourists

2012 450 65,447 25%
2013 812 104,000 33.6%
2014 800 106,000 30.7%
Source: Turkish republic nicosia aid Office reports, 2012, 2014
3.1.1. Duration of stay

Duration of stay and bed nights provide a good indication of the impact of tourists on
economic activity. The expectation is that the longer tourists stay, the more they spend
(hotels, transportation, and food) and thus, the more they contribute to economic activity.
The data on bed nights and average duration for the last decade are provided in Table 3.3. As
can be seen, the average stay of foreign tourists is around 5 to 7 days (a week), whereas
Turkish tourists stay on average 2-3 days. Although the majority of tourists come from
Turkey—as we have seen in the previous tables— their short stay does not contribute much
to the overall economy.
However, one must be careful when interpreting the trends by looking at the overall
average duration. For example, according to a survey conducted in 2011-2012, the average
length of stay was 7.6 days. But Table 3.3 shows that the duration of stay was much different
by different accommodation type. The longest stays were at own homes, rented housing or
homes of friends and relatives. Average hotel stays were just 4.4 days. Thus it is fair to say that
the contribution to the economy of tourists who stay less than five days would be limited. In
fact 26.5% of the tourists in the same survey indicate “Visiting friends and relatives” as their
purpose of entry to the island (SPO 2012, Table 4).
In reality the type of the tourist should play a very important role in their spending
patterns. Table 3.3 also shows that only around 35% of bed nights are spent at hotels and
other tourist establishments. Most of the long stays take place in visitors’ own homes (Turkish
Cypriots who live in the UK) or homes of friends/relatives (Turkish visitors).16 Given that most
of these tourists are also repeat visitors, after a while, their spending on “tourist activities” will
be limited. The number of visits to museums and archeological sites over the years by
different tourists (Table 5.1) indicate, to a degree, how much tourists can contribute to
economic activities.
table 3.3 – Percentage of tourists and bed nights by different accommodation types
(2011-2012)
Accommodation type tourists % Bed nights % Avg Duration

Hotels and similar 539,030 50.81 2,357,680 29.30 4.4
Other establishments 85,990 8.11 345,685 4.30 4
Rented Housing 47,867 4.51 598,116 7.43 12.5
Own home 62,679 5.91 1,038,298 12.90 16.6
Friends and Relatives 310,073 29.23 3,588,908 44.61 11.6
Other 15,168 1.43 117,199 1.46 7.7
Total 1,060,807 8,045,887 7.6
Source: SpO, Tourist exit interview (2011-2012), Table 6. children under the age of 15 (about 78, 833) are not
included in this table.
A significant concern among businesses related to the sector has been the full-board option
offered at major hotel establishments. As we will show in the next section, a handful of hotels
control a large share of the total bed capacity, and these hotels tend to offer entertainment,
food, transportation and even retail services at their own establishments, and their guests do
not feel the need to leave the premises. Given that the average stay of Turkish tourists is 2-3
days, the purpose of their visit is probably a weekend getaway or gambling (more about this
later). Foreign tourists, on the other hand, are more interested in the culture and traditions of
the island and would likely spend a longer time outside the hotel premises, thus contributing
more to the economy.
3.1.2. choice of hotel type

Table 3.4 shows that most Turkish tourists prefer 5- star hotels, whereas foreign tourists use
other types as well, even though 5-star hotels are still their first choice.
16 There are around 30,000 registered Turkish nationals with work permits (as of 2013) and 60,000 Turkish university
students (as of 2014) in North Cyprus.
table 3.4 – Percentage of turkish and foreign tourists who stayed at tourist
accommodation by type
turkish tourists
2002 2004 2005 2009 2010 2011 2012 2013 2015
5 Star 46.7% 37.5% 54.2% 75.7% 73.1% 78.1% 77.9% 77.2% 73.2%
4 Star 23.1% 23.0% 16.0% 12.1% 13.4% 8.8% 8.4% 8.8% 7.8%
3 Star 18.7% 28.2% 20.4% 5.8% 5.8% 5.8% 5.4% 4.9% 7.3%
2 Star 4.1% 4.7% 2.5% 3.1% 3.3% 3.1% 2.7% 3.2% 4.8%
1 Star 7.5% 6.7% 6.2% 0.8% 0.8% 0.8% 1.1% 1.6% 1.5%
Boutique Hotel 0.2% 0.1% 0.2% 1.8% 1.8% 2.3%
2nd Class
Holiday Village 0.6% 1.1% 1.9% 2.0% 1.7% 1.4% 1.2%
Tourist Bungalow 0.0% 1.2% 1.4% 1.1% 0.9% 0.8% 1.3%
Foreign tourists
2002 2004 2005 2009 2010 2011 2012 2013 2015
5 Star 17.5% 18.9% 34.1% 45.4% 41.8% 40.5% 43.9% 42.3% 43.4%
4 Star 24.6% 22.3% 18.5% 16.1% 17.5% 16.8% 14.7% 15.2% 13.6%
3 Star 30.9% 31.6% 27.5% 13.4% 14.2% 17.6% 15.8% 17.2% 15.2%
2 Star 17.7% 19.5% 11.0% 2.2% 2.7% 3.1% 2.5% 3.8% 3.6%
1 Star 9.3% 7.7% 7.7% 4.3% 3.9% 2.9% 2.5% 2.4% 1.9%
Boutique Hotel 2.2% 1.1% 2.2% 3.5% 4.5% 4.5%
2nd Class
Holiday Village 0.5% 7.7% 8.1% 6.8% 6.0% 6.4% 9.3%
Tourist Bungalow 0.0% 5.9% 7.8% 8.0% 8.8% 6.3% 7.2%
Source: Statistical yearbook of Tourism (2002-2015, available years)
Figure 3.1 – Preferences of turkish tourists (2010-2015 average)
5 Star
4 Star
3 Star
2 Star
1 Star
B outique Hot
Boutique el
Hotel
SSecond Holidayy Village

econd Class Holida Village
TTouristic
ouristic Bungalow
Bungalow
Figure 3.2 – Preferences of Foreign tourists (2010-2015 Average)
5 Star
4 Star
3 Star
2 Star
1 Star
B outique Hot
Boutique el
Hotel
SSecond
econd Class Holida
Holidayy Village
Village
TTouristic
ou
ouristic Bungalo
Bungalow
w
3.2. the supply

3.2.1. number of tourist establishments, bed capacity and occupancy rates
Figure 3.3 shows the number of tourist establishments and total bed capacity for the last 15
years. Within this time period, total bed capacity doubled from 10, 520 to 20, 974 (see Table
3.7 for 2015 numbers). The steady increase in average bed capacity is mainly the result of
large five-star hotels entering the market and, hence, the expulsion of smaller hotels due to
fierce competition. In 2000 there were only four 5-star hotels, whereas in 2015, we see there
are 18.17 The beds supplied by guesthouses (pansiyon) are also included in these numbers,
but their contribution is very small (2-3%).
Figure 3.3 – the trend in number of tourist accommodations (including guesthouses)

and total bed capacity, 2000-2015
25.000 180
160
20.000 140
120
15.000
100
80
10.000
60
5.000 40
20
0 0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
B ed C
Bed apacity
Capacity Number of Establishments
Establishments
notes: The left vertical axis represents the bed capacity and the right vertical axis the number of establishments.
Source: Tourism planning Office
17 Not all of these are new establishments. Some of these hotels just increased their bed capacity over the years to qualify
for this category.
Once again, the numbers do not provide a good picture of the actual supply in this market.
Alternatively, we report the average annual occupancy rate during this period at all the estab-
lishments, which is around 40%. However, several considerations must be taken into account
regarding this figure. First, occupancy rates reflect a high degree of seasonality, where June-
October is the high season, and the rest of the months are low season. Second, the overall
occupancy rates of different hotel types are also different (shown in Table 3.6). Finally, the occu-
pancy rates include local tourists as well, meaning they may not reflect the true impact of tourists.
Figure 3.4 – occupancy rates of touristic establishments, 2000-2015
60,0%
50,0%
40,0%
30,0%
20,0%
10,0%
0,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Table 3.5 compares North Cyprus occupancy rates with those of various countries for the
years 2012 to 2016. These numbers are total occupancy rates, which as we explained above
also include local tourists. In North Cyprus, local tourists make up only around 3% of the
occupancy, thus do not greatly impact the figures/comparisons. However, in other countires,
such as Turkey for example, local tourists make up about one-fourth of the total occupancy.
However, lacking information on other countries’ local occupancy rates, we report the totals
for comparison purposes.
table 3.5 – occupancy rates of various countries (2012-2016)
2012 2013 2014 2015 2016

N. Cyprus 44.1% 47.9% 47.6% 41.7% NA
S. Cyprus 64.0% 61.5% 62.7% 52.3% 61.3%
Malta 64.8% 70.0% 72.7% 59.7% 59.3%
Turkey 54.3% 52.6% 51.8% 51.2% NA
Greece 44.1% 44.2% 46.2% 38.6% 41.3%
Source: data for countries other than n. cyprus and Turkey are taken from eurOSTaT. 2012-2014 numbers
are annual averages, 2015-2016 numbers are the averages for January-June season. Turkish occupancy
rates are taken from Turkey’s ministry of culture and Tourism statistics. north cyprus data is from the Tourism
planning Office, Statistical yearbooks.
Table 3.6 shows occupancy rates by different accommodation types for randomly selected
years. As can be seen, there is a significant difference in the total occupancy rates: the more
luxurious hotels have higher occupancy rates than the smaller and less luxurious hotel types.
table 3.6 – occupancy rates of different accommodation types (selected years)
type 2002 2009 2011 2015

1 Star 23.5% 20.2% 16.6% 22.5%
2 Stars 30.3% 14.3% 19.3% 28.4%
3 Stars 34.3% 27.6% 49.2% 50.4%
4 Stars 52.1% 43.6% 51.3% 63.5%
5 Stars 47.6% 43.0% 47.0% 53.5%
2nd Class Holiday Village na 47.1% 45.3% 50.0%
Touristic Bungalow na 15.3% 20.9% 32.4%
Total 38.6% 35.0% 41.4% 48.8%
Source: Tourism planning Office, Statistical yearbooks of the related years. Total includes the average
occupancy rates of all the establishments, not only the ones shown on the table.
3.2.2. type of tourist accommodations

The type of registered accommodation and the corresponding total bed capacity for 2000-
2015 are shown in Figure 3.6.
Figure 3.6 – the distribution of bed capacity for differently starred hotels
18000
16000
14000
12000 1 Star
10000 2 Star
8000 3 Star
6000 4 Star
4000 5 Star
2000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
The supply of beds was dominated by starred hotels over the last 15 years, although their
dominance fell slightly after 2006, due to the increased capacity of tourist bungalows and
2nd class holiday villages.
Figure 3.7 – the share of bed capacity of 1-5 star hotels, 2000-2015
120,0%
100,0%
80,0%
60,0%
40,0%
20,0%
0,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
The bed capacity of 5-star hotels has shown an increasing trend since 2000. Between 2000
and 2004, the percentage of combined bed capacity of 5-star hotels was less than 20% of the
total capacity in North Cyprus. This percentage has steadily increased from 26.5% in 2006 to
53.5% in 2015. This of course was the result of new large-scaled hotels being built in the
aftermath of the Annan Plan referendum, commencing in around 2006. Conversely, the total
bed capacity of other starred hotels (not shown here) has shown decreasing trends; in fact
because of their inability to compete with large establishments, many smaller establishments
had to close their businesses. This could be interpreted in two ways. First, one might think
that the new, modern, large-capacity tourist accommodations are replacing the older ones,
thus it is good for the industry. But also one could argue that the fierce competition of the
21st century has disadvantaged the smaller establishments, leaving them unable to compete
with multinational chain hotels, which also received substantial subsidies from the
government (land free of charge). It is hard to conclude which point of view is more accurate,
but it is clear that the total bed capacity has doubled over the last 15 years.
Figure 3.8 – the share of bed capacity of 5-star hotels, 2000-2015
60,0%
50,0%
40,0%
30,0%
20,0%
10,0%
0,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
The most recent figures for distribution of hotel types (as of 2016) are shown in Table 3.7.
There are 140 establishments with a total capacity of 20, 393, which would yield an average
145 beds per establishment. There are also, as of August 2016, 35 hotels under construction
with a bed capacity of 8092 (Tourism Planning Office, 2016). The TRNC Tourism Planning
Office predicts that the total bed capacity should reach 32,000 and 40,500 by the end of,
respectively, 2018 and 2019. This would mean an almost 100% increase within 3 years.
table 3.7 – Distribution of accommodation by type and bed capacity (2015)
category no of Units no of Beds

5 Star 18 11218
4 Star 4 1346
3 Star 13 2260
2 Star 18 1368
1 Star 18 713
II. Class Holiday Village 4 598
Boutique Hotel 5 486
Special Class Hotel 1 34
Tourist Bungalow 30 1747
Apartment Hotel 3 116
Traditional Houses 3 96
Holiday Homes 2 108
Tourist Guest Houses 21 303
Other 14 581
Total 154 20974
Source: Statistical yearbook of Tourism (2015), Table 8, Tourism planning Office, Trnc
3.2.3. competition in the market

In antitrust cases, market definition and firm shares in the related market play a very important
role in determining the degree of competitiveness. A wider definition of a market could result
in smaller shares and, hence, imply more competition. Given the hotel-type distribution
illustrated in Table 3.4, it has been decided to include all starred hotels, 2nd class holiday
villages and tourist bungalows as the supply side of the market for tourist accommodations,
and use the total bed capacity to determine the market share of the firms in this market.18
18 Given the distribution of bed capacities in Table 3.4, the accommodations we include in our list comprise 91% of the
total tourist bed capacity. Alternatively one can use the total revenues or bed nights to calculate the market share for
each firm, but we do not have the required information.
After the boundaries of the relevant market are defined, we use two measures to decide
the competitiveness of the market. The Herfindahl-Hirschmann Index (HHI) and the m-firm
Concentration Ratio (CR) are the two measures most commonly used to determine market
competitiveness.19 The HHI is simply the sum of the square of shares of the firms (range from
0 to 10000), and the CR measures the sum of the shares of the largest m-firms (range from 1
to 100) in a market. When there is a lot of competition, both numbers will be closer to their
respective lower end values. Obviously, what is considered as an acceptable “low” or “high”
value is rather a gray area. For example, antitrust regulations in the US would consider any
market whose HHI is between 1500 and 2500 as moderately concentrated, and markets with
an HHI greater than 2500 as highly concentrated (Department of Justice, 2015).20
Although there are many tourist establishments in North Cyprus, the market is far from
competitive. Table 3.8 shows the number of larger firms in terms of bed capacity. The most
luxurious hotels (13% of all establishments) control more than half (55%) of total bed capacity.
Including the 4- and 3-star hotels (25% of total establishments) will increase the total capacity
to around 73%. Thus one-fourth of the firms in this market control 73% of the total supply.
This indicates that the smaller hotels are not in a very competitive position in this market.
table 3.8 – Distribution of bed capacity (2015)
% of establishments % of total bed capacity

13.0 55.0
15.7 61.6
25.0 72.7
Table 3.9 below reports the m-firm CR and HHI for selected years. Although the HHI
numbers are small and indicate low concentration (more competition) in this market, it has
been increasing over the years. If we only use 3, 4 and 5 star hotels in our market definition
(number of hotels is 32), the HHI would increase to 638. Similarly, concentration ratios have
been increasing over the years, which should indicate lower competition in this market;
however, these numbers alone would probably not be enough in an antitrust case.
19 Both measures have advantages and disadvantages. For a more detailed discussion, please refer to Waldman and
Jensen (2000), Chapter 4.
20 https://www.justice.gov/atr/herfindahl-hirschman-index
table 3.9 – Various competitiveness measures
2002 2009 2015

5-firm CR 26.8% 30.2% 30.6%
10-firm CR 39.0% 42.4% 46.0%
20-firm CR 54.6% 58.5% 62.6%
HHI 247.1 286.4 298.721
The Competition Board in North Cyprus recently filed a report regarding competitiveness
in the tourist market (Competition Board, 2016). A complaint had been filed by a tourist
agency claiming that there had been exclusive deals between some travel agencies and
hotels, which reduced competition in the travel agency market and increased the market
power of the participating hotels.22 Although the report found some anti-competitive
elements in these exclusive deals, the board concluded that since “no single firm in the travel
agencies and hotels market has 40% of the market share, the related statue of the
Competition Law is not violated”. We believe that this rule of 40% is very restrictive and does
not allow for a fair resolution to the problem cited. In fact, if we use the Board’s market
definition, the HHI becomes 638 and the 5-firm CR is 49%.23
There are also significant barriers to entry into both markets. For example, in order to
qualify for a Type A travel agency permit, an agency must provide 10,000 bed nights of foreign
tourists in a year during the probationary period. The agencies are required to become
members of KITSAB and pay a one-time membership fee of 15,000 euro (and 250TL annual
renewal fee). For the upstream market (hotels) there are significant initial costs that prohibit
the entrance of smaller firms into the market. That is in fact the reason why the number of 5-
star hotels over the years have increased and the number of smaller sized establishments have
decreased. Although we do not claim that the hotel industry in North Cyprus is controlled by
one firm, the market is far from being competitive. It is probably fair to describe it as a few
large firms controlling the industry, with the many smaller firms enjoying any surplus demand.
In this discussion of the tourist establishment market in North Cyprus in the new
millennium, we have noted a significant increase in the number of available hotel beds, an
increase due to the greater number of 5-star hotels. This has reduced competition in the
market and raised barriers against entry into the hotel industry. Possible vertical integration
and exclusive deals between travel agencies and hotels have also reduced the
competitiveness of the market. In the next section we will examine hotel location in North
Cyprus and hotel ownership details.
21 This number increases to 370 if we consider four separate hotels operated by Merit as single ownership.
22 The Board defines the travel agency market as A type (permanent and temporary) travel agencies, and the hotel market
as 3-, 4- and 5-star hotels and boutique hotels.
23 The Board calculates Merit Hotels as four separate hotels. Our calculation combined them.
31
4. A GEOGRAPHICAL OVERVIEW
This section will illustrate geographically the past and current situation of the tourism sector;
in other words, we will present the number of tourist establishments and bed capacities
according to their distribution throughout the north of the island. We provide two maps, the
first one compares 1974 to 2016, and the second one demonstrates the current situation.
It must be borne in mind that there are limitations to obtaining and applying data for both
the past and present; as such, we present the most realistic picture possible under the
circumstances.
Following the separation in 1974 there were no regulations in place for the adminis-
trational division of the North. It was not until 1980 that the first legal action took place in
accordance with the Civilian Administration and its Sections Act, which divided North Cyprus
into three districts, namely, Nicosia, Famagusta, and Kyrenia. In 1998, two more districts were
added (Iskele and Güzelyurt). And finally, most recently in 2016, Lefke was promoted to the
status of a district (Url-1). Therefore, the map shown in Figure 4.1 only includes the three
districts (Nicosia, Famagusta, and Kyrenia) which have data available for the year 1974, and
aggregate numbers for 2016. In addition, Figure 4.1 is composed of starred hotels only
because we do not have the numbers for other types of tourist establishments for 1974.24
Overall figures show that within this approximately 40-year period, total bed capacity rose
by 75% in the North, while the total number of tourist establishments grew by 51%. There are
some striking differences in 1974 and 2016 numbers resulting from the division of the island,
which also indicate a big locational shift within the North. In 1974, Famagusta constituted
75% of total beds with an estimated 85% to 90% of this capacity located in the Varosha
region. It was mentioned earlier that following the separation, the Varosha region was sealed
off and never utilized again as a tourist area. As a result, the total beds in the Famagusta
region decreased to 25% by 2016. The process produced a geographical shift: the touristic
hotspot of North Cyprus became Kyrenia, where the percentage of beds rose from 24% to
70% in 40 years.
The second map, Figure 4.2, gives a more accurate picture for the current situation,
particularly for Kyrenia. It should be kept in mind that this map includes all types of tourist
establishments (not only starred hotels), hence the swarm of establishments along the north
24 For 2016, starred hotels constitute 60% of the total bed capacity.
coast. In addition, the map combines smaller municipalities into bigger districts and conveys
the totals for each district (these combined groups are indicated on the map, under the
individual district tables).25
The overall picture of the current period suggests that there is heavy, non-proportional
tourist development in Kyrenia, specifically in the coastal zone. Although several significant
policy documents have been produced to counteract this situation, none so far have proved
effective. The National Physical Plan document, for example, proposes “to de-escalate the
tourist development pressure on Kyrenia and to control and limit further development of
mass tourism in Kyrenia by creating new, alternative attraction points along the coast” (NPP,
2014, translation by the authors). In addition, some recent developments have resulted in
protests, attracting significant public interest, specifically regarding the increasing floor
numbers along the coastal zone against the sanctions of Girne development mandate (Zeyko
Oil Factory area, see Url-2 for details).
Figure 4.1 – number of starred hotels and bed capacities in major localities:
1974 vs. 2016
25 Instead of administrational divisions, the districts are associated with each other according to their locational proximity
with regard to their tourist potential. For example, Iskele is evaluated as part of Famagusta, while Karpaz is interpreted
as a separate tourist agglomeration.
4. a Geographical Overview 33
There is another type of tourist development on the island, which is individualistic,

income-oriented, ad hoc, and with little visiblility: following the rejection of the 2004 Annan
Plan, and with the property issue deadlocked, investors saw the huge potential of investing
in the North (İşçioğlu, 2009). It was not only Turkish Cypriots who invested in property, but
also foreign companies and Israelis who joined in the –often illegal—tourism development.
Such affairs helped create the current unbalanced geographical distribution of tourist
enterprises throughout North Cyprus.
In accordance with policies aiming to disseminate the tourist development potential,
however, the Bafra area is now being marketed for investment. An important reason for this
is a policy that was proposed in 1988 –but not then implemented—to revive the “Bafra Tourism
Development Area” (see Figure 4.2 for a schematic representation). The more recent bafra and
immediate vicinity development mandate (2006) allows only tourist establishments to be
constructed within the zone. However, in spite of these progressive intentions, only two hotels
have been built in the area in the last 17 years and occupancy rates remain low (Url-3). And
although parcels have been—and are being—handed out, and even though hotel construc-
tion has begun, the hotels remain unfinished. This suggests that there are structural problems
that demand attention, such as infrastructural deficiencies, difficulties in, and high costs of,
transportation, and other problematic environmental factors (Prime Ministry’s Office, 2015).
On the other hand, generally all other localities, but specifically Güzelyurt, Lefke, Karpaz
and Nicosia, are underrepresented in terms of tourist facilities. While eco-tourism is more
pronounced in the Güzelyurt region (more specifically in Lefke), Karpaz is also known for “3S”
tourism (sea, sand, sun). Nicosia, on the other hand, is mainly an attraction point for casino-
goers, and from all around the island – north and south. However, Nicosia’s big hotels in the
city centre are causing major traffic and parking problems. In addition, hotels’ locations are
decided for reasons that are mainly income oriented and ad hoc, and which lead to
unplanned developments with no concern for the daily lives and routines of city dwellers.
In this section we have highlighted the large geographical imbalance in the sector—a
situation that has caused disproportionate urban development, pressure on the
environment and inequalities in regional economic progress. The fact that a Development
Plan for the Girne and Çatalköy districts is being prepared signals that these aforementioned
issues might be tackled in the near future. The issue is not only to ease the pressure on
Kyrenia, but also to promote other districts (such as Güzelyurt or Nicosia) for tourist purposes
other than sea, sand and sun.
Figure 4.2 – tourist establishments and total bed capacities

of north cyprus Districts, 2016
35
5. CONTRIBUTION OF THE SECTOR

TO THE OVERALL ECONOMY
5.1. Gross Domestic Product (GDP)
The first indicator we examine in this chapter is the share of this sector in the overall Gross
Domestic Product. Unfortunately, the SPO data does not include the tourism share on its
own, but combines it with the share of restaurants. As a result, these ratios are positively
biased. Nevertheless, Figure 5.1 shows the trends in these sectors where two different trends
are shown; nominal and real (using 1977 prices as the base year). Because the SPO uses
different deflators for overall GDP and individual sectors, the two trends are not equivalent.
In other words, even though the share of this sector is increasing over time, sector-related
prices are increasing more rapidly than the overall prices. In any case the direct share of this
sector in the overall economy is rather small, averaging around 3% (real). On the other hand,
these numbers do not include the impact of this sector on other sectors, such as construction,
retail and transportation. Hence, these numbers should be interpreted carefully.26
Figure 5.1 – Share of hotel industry and restaurants in GDP
8,0%
7,0%
6,0%
5,0%
4,0%
3,0%
2,0%
1,0%
0,0%
1981
1984
1991
1994
2001
2004
2011
1977
1978
1979
1980
1982
1983
1985
1986
1987
1988
1989
1990
1992
1993
1995
1996
1997
1998
1999
2000
2002
2003
2005
2006
2007
2008
2009
2010
R
Real
eal (1977) pr
prices
ices Nominal P
Prices
rices
Source: SpO Social and economic indicators, Tables 1 and 2
26 There are other indicators that could be useful to analyze the impact of a sector on the overall economy. For tourism,
these include the ability to compensate trade deficit, value added of the sector, fixed investments and sectoral growth.
However given the poor data quality on aggregate measures in North Cyprus, we choose not to produce these graphs
in this section.
Another key indicator used to measure the contribution of the tourism sector to the
aggregate economy is the net tourist income generated by that sector as the share of GDP
(Figure 5.2). These numbers include tourists’ direct expenditures during their stay on the
island, such as flight, accommodation, food, transportation and any other purchased goods
or services. There is an increasing trend after 1986, with the contribution peaking at 38% in
1990. Post-1990, we observe a steady decline, as the new millennium tourists only generate
10% income in North Cyprus. This shows that the importance of this sector has diminished
over the years. If measured accurately, this figure (Figure 5.2) represents a better indication of
tourism’s impact on the overall economy.
Figure 5.2 – Percentage of net tourism income to GDP
45,0%
40,0%
35,0%
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0%
1981
1984
1991
1994
2001
2004
2011
1977
1978
1979
1980
1982
1983
1985
1986
1987
1988
1989
1990
1992
1993
1995
1996
1997
1998
1999
2000
2002
2003
2005
2006
2007
2008
2009
2010
2012
2013
However, there are certain problems with the measurement of net tourism income. The
SPO conducts periodic interviews at Ercan airport in which it asks tourists to estimate their
average expenditure during their stay. These averages are then multiplied by the total
number of tourists entering the country. A first problem with this calculation is that, as we
have shown, the number of tourists entering the country and the number of tourists staying
at tourist accommodations are not equal. Secondly, the percentage of tourists who come by
sea has dropped significantly in recent years.27 Moreover, the tourists who come by sea are
different demographically and usually spend less than the tourists who travel by plane.
Finally, the spending patterns of Turkish and foreign tourists are vastly different. For example,
27 Currently tourists who arrive by sea account for less than 10% of tourist arrivals. In 2003, 43% of Turkish tourists
preferred to use sea ports. With plane tickets becoming more affordable, now only a very small percentage of tourists
come by sea. On the other hand, in the 1990s, the percentage of tourists who used maritime transport was substantial.
Although the corresponding numbers have decreased in recent years, early numbers are likely to have overestimated
tourism income.
5. contribution of the Sector to the Overall economy 37
the combined number of Turkish and local visitors to museums and historical sites has been
lower than the total number of tourists since 1993.28 Thus tourism income estimates will not
be reliable unless the different expenditure patterns among different types of tourists are
accounted for.
A better, but rather rough, estimate of net tourism income would be to multiply individual
expenditure by the number of tourists who actually stayed at tourist accommodations.
Bearing in mind the potential biases we explained in the previous paragraph, if we use the
same average spending and the total number of tourists who actually stayed at hotels, net
tourism income will be about 50 percent less than what is being reported officially.29
Museum Visits
Another reliable source of tourist income is the revenue received from museum visits. Table
5.1 shows the number of tourists visiting museums over the years. The number of foreign
tourists is larger than the number of Turkish and local tourists combined (students and
soldiers are not included). This table includes total revenues, which are not very large when
compared with the total tourism income, but still represent significant amounts within the
total budgets of related ministries. The museum revenues are invested in a Fund (eski eserler
fonu) that pays for maintenance and preservation costs of museums and historical sites as
well as the salaries of the staff working at museums. This fund is managed by an independent
board of directors. The TRNC parliament has recently passed a new law that transfers all
savings in this Fund to the central budget of the state, to then be utilized according to general
budget regulations. There is no mention in the law of this money to be specifically used for
the preservation of historical sites; this decision is now up to the whim of politicians—and
potentially detrimental for the future of museums and historical sites in North Cyprus.30
28 We only have information since 1993 from the Tourism Planning Office and they don’t separate local and Turkish
visitors. The related table is available upon request.
29 See Figure A2 in Appendix A, a graph that shows the percentage of tourists since 1977 who actually stayed at hotels.
30 The President of the TRNC sent the law to the parliament for reconsideration but the parliament returned it to the
President without making any changes. There was some criticism by the public on this issue but not enough to change
the minds of policymakers.
table 5.1 – Museum visits and total revenues
total Foreign
tourist revenue
trnc + Group Foreign / from Visits
turkish Foreign tickets total (in turkish lira)
1993 110567 236765 68.2%
1994 59933 252651 80.8%
1995 69343 193300 73.6%
1996 70265 167928 70.5%
1997 101341 142700 58.5%
1998 105859 119426 53.0%
1999 87876 97004 52.5%
2000 102595 108999 51.5%
2001 61945 104162 62.7%
2002 73069 114324 61.0%
2003 63546 152835 70.6%
2004 64141 163763 71.9%
2005 75035 172631 69.7%
2006 86482 139570 61.7% 697,850
2007 108769 152257 58.3% 761,285
2008 115723 159296 57.9% 796,480
2009 110344 210273 65.6% 1,051,365
Source: Statistical yearbooks. foreign/Total ratio for 2011-2015 is problematic because the number of
foreigners within the group tickets category is unknown. because students and military personnel are not
included in these numbers, the actual museum revenues are higher than what has been calculated.
revenues are calculated by using the ticket prices for each corresponding groups’ category.
5.2. employment
In this part we look at the direct contribution of the tourism sector to the economy in terms
of employment opportunities. Figure 5.4 shows the number of people employed in tourism
and related sectors since 1977 as a percentage of total employment in North Cyprus. The
graph shows four different trends. The blue line shows the percentage of employed individuals
at tourist establishments (hotels + guest houses). Other lines represent employment in
related sectors and casinos. Employment in the sector shows an increasing trend, particularly
in the last decade. This is primarily due to the growing number of large hotels that require
more employees. In addition, casinos have added significant employment to the sector (see
section 6 for detailed information on casinos).
Figure 5.3 – the percentage of total employment in tourism and related industries
16,0%
14,0%
12,0%
10,0%
8,0%
6,0%
4,0%
2,0%
0,0%
1981
1984
1991
1994
2001
2004
2011
1977
1978
1979
1980
1982
1983
1985
1986
1987
1988
1989
1990
1992
1993
1995
1996
1997
1998
1999
2000
2002
2003
2005
2006
2007
2008
2009
2010
2012
2013
TTourism
ourism Establishmen
Establishments
ts Add
Add complement
complement sec
sectors
tors A
Add
dd TTourism
ourism Agencies
Agencies Add
Add Casinos
Casinos
Tourism / travel agencies

There is a significant number of tourist agencies in North Cyprus. They are required to
become members of KITSAB31 by paying a 15,000 euro one-time membership fee, and then
a 250TL annual renewal fee. There are three types of agencies approved by the related
ministry. These are A-type, Temporary A-Type, and B-type. Temporary A-types are those that
have been given a one-year probationary status, during which time they are required to bring
in at least 10,000 bed nights of foreign tourists. Failing this, they can petition the ministry for
an extension, which is given if they have a valid reason. Otherwise the permit is revoked or
changed to type B.
The distribution of the types of tourism and travel agencies is shown in Figure 5.4.
Although the number of agencies totals over 150 for most years, 70% of these have only
temporary status. Since the number of A-type agencies has been steady in the last decade
(although there has been a slight decrease since 2011), it is likely that temporary agencies
could not satisfy the 10,000 bed night requirement and had their licenses revoked. A
probable reason for the high number of agencies with temporary status is the generous
government subsidies they receive (more on this in the next section). Regardless of their
motives, these agencies provide significant employment - even if it is only for the short term.
31 Cyprus Turkish Tourism and Travel Agencies Union.

Figure 5.4 – the number of types of tourism and travel agencies (1997-2015)
140
120
100
80
60
40
20
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Type-A
Tyype-A Temp
Temp
e Tyype-A
Type-A Type-B
Tyype-B
Number of tourist guides

Table 5.2 shows the number of registered tourist guides by graduation year (from OTEM). It is
interesting to see that between 1977 and 1995, most tourist guides obtained their certificate
to be guides in the Turkish language. In the second half of the 1990s, the number of foreign
language-speaking guides increased, only to halt again in the early millennium. These trends
are indicative of tourist nationality.
table 5.2 – number of tourist guides graduated from oteM32 (1974-2012)
% Foreign % Foreign
year total Guides language year total Guides language
1974 26 100 1996 23 100
1975 25 100 1997 18 100
1976 15 100 1998 30 100
1977 20 70 1999 55 49
1978 21 62 2001 26 100
1979 46 28 2002 102 0
1980 53 42 2003 94 0
1981 46 37 2004 82 0
1986 43 40 2005 21 100
1987 43 33 2006 18 100
1989 43 47 2007 59 39
1991 52 25 2009 40 100
1993 118 48 2010 19 100
1995 73 32 2012 46 100
32 OTEM refers to the Center for Hotels and Tourism that was established in November 1974 with the main goal of
producing qualified personnel for the tourism industry immediately after the separation.
5.3. Government incentives and bank credits for tourism

Bank credits
Figure 5.5 shows bank credits loaned to the tourism sector over the years. The purpose of
these credits is unknown, but thinking in positive terms, we would assume they were
intended to develop the sector. The left axis measures the ratio of these credits to the share
of the sector in overall GNP. This should reveal the strength of this sector in terms of economic
activity. During the 1980s this ratio was rather small, signifying that the sector contributed to
GNP without substantial help from the banks. But this could also mean that credits were not
that significant during this time. Towards the end of the 1980s and the first half of the 1990s,
sector credits accounted for an increasingly greater share of the sector’s contribution to GNP,
indicating that it was these credits that kept the sector alive. The ratio declined substantially
in the new millennium and only started to increase after 2009 when it had reached an all-time
low. Increment indicates more sector dependency on banking credits.
The right axis shows this sector’s credit ratio to overall credits. Considering the total
credits extended to different sectors by the local banks, the tourism sector has benefited very
little –in fact, only around 3%. Most credits are being used by the public sector and the
retail/trade sector. Since these sectors also contribute to the tourism sector, we cannot
project an accurate picture of this sector’s credit usage.
Figure 5.5 – Percentage of tourism sector credits to sectoral GnP and total credits
50,0% 6,0%
40,0% 5,0%
4,0%
30,0%
3,0%
20,0%
2,0%
10,0% 1,0%
0,0% 0,0%
1981
1984
1991
1994
2001
2004
2011
1977
1978
1979
1980
1982
1983
1985
1986
1987
1988
1989
1990
1992
1993
1995
1996
1997
1998
1999
2000
2002
2003
2005
2006
2007
2008
2009
2010
2012
2013
TTourism
ourism Sector
Sector Credits
Credits / Tourism
Tourism GNP TTourism
ourism SSector
ector Cr
Credits/
edits/ Total
Total Credits
Credits
Source: SpO data
Subsidies (Incentives)
One attempt to help jump-start the tourism sector immediately after separation was to enact
the Industry and Tourism Investments Incentive Law in 1974, which soon proved to be
ineffective. As a result, this law was replaced in 1975 by the Tourism Sector Incentive Law.
However, this law was not enacted until 1987, during which time the old law was in effect
(Yesilada, 1994: 289). The main incentives of this law are as follows:
1. Import Tax exemption on capital goods to be used for tourism purposes.

2. Subsidies for advertisement and promotion of tourist establishments (up to 75% of the cost).
3. Corporate income tax exemptions for the first 10 years for establishment owners and/or
investors who organize charter flights.
4. Exemption from all construction-related taxes for establishments related to tourism.
5. Credit extensions (in local or foreign currency, backed by the state) for investors under
approved conditions by the Fund, where installments and interest will be paid by the
same Fund.33
6. Leasing public buildings or land to tourism investors at very low prices for long terms
(99 years).34
Although these incentives appear reasonable on paper, their execution is open to manipu-
lation. In fact, most of the exemptions and privileges in this law have been abused by the
related ministers, and public resources have been wasted. It remains a mystery where all the
revenue collected by the related Fund has gone. Over the years, the laws changed and new
items were added. Table 5.3 shows the total amount of monetary incentives extended to this
industry between 1993 and 2000. Keeping in mind that there were only few establishments
during this time, it is likely that most incentives were used by just a few firms in the industry.
table 5.3 – the amount of subsidies ($) according to the tourism industry incentive law
touristic travel Subsidy Per

charter Flights Printing Ads establishments Agencies tourist ($)
1993 57971 118821 1631892 213966 14.09
1994 226065 92475 2306634 210474 17.76
1995 89478 221838 4730818 277112 30.98
1996 81513 83621 7535722 190730 56.51
1997 157117 172291 5953677 223622 36.66
1998 455543 433856 13318155 162304 73.60
1999 632720 306730 10451582 45333 53.17
2000 737578 17954 50779554 90667 217.61
2001 426885 20345 2844110 14705 15.58
2002 649717 529799 5628375 52951 25.32
Source: Statistical yearbook, 2002. per Tourist Subsidy is calculated by dividing total subsidies (four columns)
by the number of tourists who actually stayed at hotels.
33 The Fund refers to the Tourism Development and Promotion Fund whose budget includes annual allocations from
the Tourism Ministry, credits obtained by the decision of the Board of the Ministers, tax revenues from imported
gasoline and all other goods (except basic food products) to the country, 50% of the price of all the entries/exits to
the country, the interest earned from the credits extended by the Fund, the rents allocated for tourism purposes, and
casino license fees.
34 Although this was rejected by the Constitution Court in 1987, whether the decision was respected by policymakers is
another story.
The Incentive Law (47/2000 Tesvik yasasi) enables foreign investors to obtain funding. If an
investor obtains the Incentive Certification approved by the SPO, he is entitled to a number
of privileges, including application for credit at the Development Bank. Other privileges
involve investment discounts, excise tax exemption, VAT exemption from physical capital,
land/building allocation and credit backed by the Fund. By the end of 2008, there were 350
Incentive Certifications approved by the SPO, which resulted in fixed capital investment in
the amount of 3228 million TL, with 68.7% of these in the tourism sector (SPO, 2013). This law
extended a total of 8.9 million TL credits to the tourism sector by the end of 2008.
The most recent subsidies for this sector are outlined in Table 5.4.35 The table shows
foreign tourist direct payments to travel agencies (Type A) that bring tourists using charter
flights, and on condition that these tourists stay at least seven nights at KITOB member
hotels, Karpasia Area ECO Tourism Union member establishments, or regional guesthouses.
These add up to substantial amounts, as they offer a huge incentive to travel agents who can
bring more foreign tourists to the country. However, government payments are usually late,
and some agencies complain that late government reimbursement puts them in a financially
difficult situation. Furthermore, given that around 40% of foreign tourists are brought by one
travel agency (The Competition Board, 2016), the subsidies are distributed unequally. Table
5.5 shows subsidies for other types of tourist groups.36 There are also incentives for tourists
brought in with commercial (non-chartered) flights, and are valid for tourists staying at similar
accommodations as described above, extending cover to non-foreign (Turkish) tourists.37
table 5.4 – Foreign tourist subsidy amounts (per tourist brought by charter flights)
# of tourists 2014 2015 2016

1,000-4,999 90 € 85 € 80 €
5,000-9,999 95 € 90 € 85 €
10,000-19,999 100 € 95 € 90 €
20,000-29,999 110 € 100 € 90 €
30,000+ 120 € 110 € 100 €
Source: besim and Sertoglu (2015)
35 These were valid between January 1, 2014 and December 31, 2016.
36 The religious and other official holidays, and June 15- September 1 period are excluded.
37 See footnote 24.
tablo 5.5 – other kinds of incentives (per tourist)
turkey other
Special Interest Groups
At least 5 nights accommodation 35 € 50 €
Closed Groups
Type 1* (at least 2 nights) 10 € -
Type 1 (at least 3 nights) 25 € -
Type 2** (at least 2 nights) 15 € -
Type 2 (at least 3 nights) 30 € 40 €
Non-chartered Tourists
*Type 1: agency and vacation groups
**Type 2: Seminar, workshop, conference, meeting groups
Source: besim and Sertoglu (2015)
In recent years subsidies for tourism have been very generous. This has led to a substantial
increase in the number of foreign and Turkish tourists and in the resulting bed nights.
However, at the same time, it has applied pressure on the government—whose lack of funds
meant that subsidies could not be paid to sector representatives on time. In order to minimize
the damage, payments were made via grants obtained from Turkey (TR Development and
Economic Cooperation Office Report, 2015, p. 102). Most recently the government has
announced that they will lower the incentives for charter flights, which had also been criti-
cized by some political parties.38 In any case, it is fair to say that these incentives were a boon
to tourist numbers and occupancy rates. On the other hand, without further information on
total subsidies, we cannot assess the net economic impact of these developments. If these
trends cannot be sustained without incentives, the sector’s growth will be nothing more than
an economic bubble. In the next section we examine a related subsector that has contributed
to the bubble in recent years.
38 http://www.kibrispostasi.com/index.php/cat/35/news/217996/PageName/KIBRIS_HABERLERI
45
6. CASINOS
Since the 1974 division, casinos have become an integral part of tourism in the North. The legal
foundations for opening and operating establishments that allow gambling were constituted
as early as 1975. Initial plans gave permission for four casinos (two in Kyrenia and two in
Famagusta) at 4- or 5-star hotels, on the condition that they brought tourists to the island
(Yesilada, 1994). As meeting this condition proved to be difficult, it was subsequently elimi-
nated. At the same time, the number of casino permits increased to nine (Yesilada, 1994). By
1995 there were a total of 13 casinos in the northern part of the island (Scott and Asikoglu,
2001). The main purpose of these places was to attract tourists (mainly from Turkey, because
Turkish nationals were not allowed into casinos in Turkey) for gambling activities and thus
increase the revenues from tourism. This proved to be an important source of tourist attraction
when Turkey’s casinos were closed in 1997. There is no doubt that the number of people
visiting the island increased and a significant number of these “tourists” came for gambling,
but the impact of these establishments on the overall North Cyprus economy is questionable.
The North Cyprus governments did not worry long about the legal framework for casinos
The state initially used the “Betting Houses, Gaming Houses and Gambling Prevention Law”
(Fasil 151), a law that was adopted from the English administration law enacted in 1947. The
first government program that includes reference to casino regulations was the 1996 program
that promised to “reorganize the laws and regulations regarding casinos and increase the
contribution of these establishments to tourism” (Diler, 2015: 97). Not surprisingly, it was
many years before these promises were carried out, meaning that casinos operated under
outdated regulations for another 10 years.
The most recent requirements for gambling permits are outlined in a statute that was
passed in 2009.39 Item 7 of the related statute requires that the permit be given only to 5-star
tourist establishments with a minimum of 500 beds or to first-class holiday villages with the
same bed capacity. The law also limits the number of permits to five, although establishments
in the Bafra Tourism Investment Area are excluded from this limit.40 The permit is revoked if
an establishment fails to meet the star and bed capacity requirements. Finally, the casino
permit must be renewed every three years and is not transferrable.
39 Sans Oyunlari Yasasi (Gambling Law) 31/2009.

40 Although the law limits casino permits to five, the permits obtained before 2009 are not included, hence there are
currently 30 casinos in North Cyprus.
The law also dictates the tax and fee payments required of these establishments. Casinos
must pay 10% of their gross earnings from gambling activities each month. However, the law
calculates a minimum tax that must be paid regardless of the amount of earnings. This
minimum amount is relative to the number of gaming tables and machines. There is also an
additional annual license fee of 550,000 euro, which covers the operations of seven gaming
tables and 75 game machines. Additional machines and tables are subject to extra payment.
Finally, every employee working in these establishments is required by law to have the appro-
priate employment license specific to gambling, which is given by the central government
and must be renewed annually. All these fees and taxes represent a good source of income
for the central government, and is probably the reason the state has allowed them to operate.
In October 2016, a new law establishing the Casino Administrators Union was enacted (31
October 2016). However the 2009 law required every casino owner to be member of this
union since 2015 (which did not exist until today). Item 81A in the “Hotels Bylaw” (2012) states
that hotels with casino permits that are not 5-star (or not a first-class holiday village) are
required by law to upgrade their establishments to 5-star requirements.
Contribution to the Economy

Figure 6.1 shows the trend in casino numbers for 1998-2013.41 Although the trend was steady
between 1998-2006 at 20 casinos, their number increased to 25 by 2010, mainly due to the
increase in the number of four- and five-star hotels around this time. The number of people
employed at casinos is also impressive. Compared to total employment at major tourist
accommodations (excluding guesthouses), casino employment has been increasing, and in
fact took over hotel employment in 2009 and 2010. This suggests that casinos in North
Cyprus contribute positively to overall employment.
Figure 6.1. number of casinos, 1998-2013
30
25
20
15
10
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
41 There is official data only after 1998.

6. casinos 47
Figure 6.2. ratio of employment at hotels to casinos
120,0%
100,0%
80,0%
60,0%
40,0%
20,0%
0,0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
There are, however, several negatives that these establishments generate with regard to
employment conditions. For one, casinos usually operate after dark, which means that
employees do not have regular working hours. This should concern the labor unions whose
main duty is to ensure workers’ rights. Given the difficult working hours, most nationals do
not want to work at these establishments, forcing employers to hire staff from overseas.
There was a high supply of Romanian women working as croupiers in the mid-1990s. These
women worked under strict guidelines and were sometimes not made to feel welcome by
the locals (Scott, 1995). Hiring preference shifted towards Turkish workers during the 2000s.
On the other hand, amenities (drinks, food) are usually free of charge at these estab-
lishments, such that customers spend all their time inside and, hence, fail to contribute to
the local economy. Finally, environmental factors such as pollution and congestion due to
poor infrastructure, as well as lack of monitoring of the entry of the locals (although it is
illegal), have made them unpopular with the locals.
It is true that casinos attract large numbers to the island, but how important they are for
the local economy is debatable. On the one side, they generate revenue for the government
through license fees and other regulatory payments. They also employ a substantial number
of workers, although a large portion of the casino workforce is made up of foreigners who
generally work under the table. On the other hand, the social impact of gambling on the
local society is a public concern.
48
7. CONCLUSION
This report has evaluated the development of the tourism industry in the northern part of
Cyprus since the island’s division in 1974. The situation pre-1974 was discussed briefly, before
moving on to examination of the supply and demand of tourism services that remained in
the northern part of the island following partition and into the new millennium. Additionally,
the overall contribution of the industry in terms of employment and value added was exam-
ined. Finally, the gambling industry was highlighted, as it is highly correlated with the sector.
After 1974, the Turkish community was left with a significant number of tourist accommo-
dations which could not be utilized efficiently. According to our findings, 70% of total bed
capacity of the RoC in 1974 remained under TC control, although 48.4% of these were in the
Varosha region, which was closed off and never utilized by the authorities in the North. Other
hotels were gradually managed by the state or private entities. Although policymakers
realized the importance of this sector in the development of the new state and included
policy measures to develop it, they have not been too successful .
One of the main challenges facing this sector is the lack of tourists from foreign desti-
nations: 80% of “tourists” in the North come from Turkey and their contribution to the local
economy is questionable since these “tourists” tend to stay with their relatives or visit for certain
activities that require shorter stays (i.e., gambling, weekend getaway, business). Recently, the
government has allocated substantial subsidies for tourists who come from destinations
other than Turkey and has successfully created an increase in the number of such tourists.
However, reliance on subsidies continuously may not be a long-term solution. Casinos also
provide significant employment opportunities and significant tax revenues for the state, but
their contribution to the tourism sector is not so clear.
Another concern arises from environmental issues. According to official figures, in 2015
there were around 1.5 million tourists to the island: a number that is five times greater than
the TRNC population. Higher tourist numbers –especially during the summer period—
means high energy consumption at hot temperatures. Furthermore, more tourists means
more waste, more water usage and more congestion (large busses) in traffic. The infrastructure
of the TRNC is not sufficiently developed to cope with such an increment in the demand for
public goods. These issues, however, are never discussed by the policymakers.
When we consider the unbalanced geographical development of tourism on the island,
environmental concerns grow –especially because of the pressure put on Kyrenia’s coastal
7. conclusion 49
region, and this has also generated public attention. Infrastructural deficiencies, on the other
hand, are noted in the profit-oriented, ad hoc touristic development, which is perpetuated
through impassive or even supportive attitudes of policymakers. Another issue with regard
to geographical focus is that cities other than Kyrenia are underrepresented in terms of
tourism. Although assertive policies and strategies have been proposed (for instance,
developing Bafra as a tourism destination), they remain unrealistic since they are not sup-
ported by facts on the ground (infrastructural deficiencies, transportation difficulties, envir-
onmental demands as well as a high-handed attitude regarding location).
The future of the tourism industry in North Cyprus is uncertain. On the one side, the large
5-star hotels that are being built provide significant employment opportunities; however, it
is the hotels that gain the largest share of the benefit, due to full board options and gambling.
On the other hand, the smaller, traditional hotels/guesthouses are being driven out of the
market and their size disqualifies them from significant government subsidies. Furthermore,
the larger hotels pose serious environmental hazards, an issue that is unfortunately neglected.
As long ago as 1990 the then-government proposed to introduce a “Tourism Master Plan”—
a plan that was finally drafted in 2012. The lack of planning, not only in the tourism sector but
in all areas of economic development, has made the private sector heavily dependent on
government aid and support, which is not sustainable in the longer term.
This sector is supposed to be the heart of the economy following a possible reunification
of the island. However, beyond the issues related to infrastructure, there is the problem of
land ownership, as many of the Turkish Cypriot tourist establishments in Kyrenia are illegally
built on Greek Cypriot properties. Unless such land ownership issues are resolved, the
tourism sector in the North will take a huge economic hit.
50
8. REFERENCES
Beaudouin, E., Baud-Bovy, M. and Tzanos, A. R. (1962). Cyprus Study of Tourism Development,
Societe centrale pour l’equipement du Territoire – cooperation, Cyprus, December 1962.
Besim, M. and Sertoğlu, K. (2015). Stable and Sustainable Economic Growth in North Cyprus:
Sectoral Analysis and Policy Recommendations, report prepared in cooperation with Prime
Ministry and Eastern Mediterranean University, August 2015.
Competition Board (2016).
(http://www.rekabet.gov.ct.tr/Portals/1112/64-
2016%20BlueLine%20Gerekceli%20Karar%20KARARTMALI%2023%20Haziran%202016.pdf)
Diler, C. (2015). Hukumetlerin Vaatleri ve Hezimetleri, Soylem Yayinlari, Lefkosa, Kibris.
Hatay, M. (2005). Beyond Numbers: An Inquiry into the Political Integration of the Turkish
‘Settlers’ in Northern Cyprus, priO report 4/2005.
İşçioğlu, Deniz (2009). KKTC Kentsel Politikası Üzerine Bir Değerlendirme. aksaray Üniversitesi
İİbf dergisi 1(1): 149-161.
Prime Ministry’s Office (2015). Kuzey Kibris Türk Cumhuriyeti’nde İstikrarli Ve Sürdürülebilir
Ekonomik Büyüme: Sektör Temelli Analiz ve Politika Önerileri, Gazimağusa, KKTC.
Martin, J. (1993). The History and Development of Tourism, in The political Social and economic
development of northern cyprus, edited by C. H. Dodd, the Eothen Press, 1993, pp. 335-372.
State Planning Organization (2013). Economic and Social Indicators, 1977- 2013 Available at:
devplan.org
Tourism Planning Office (2016). Planning Report of Tourism Planning Office, August 1-
August 30, 2016, Nicosia.
Waldman, D. E. and Jensen, E. J. (2000). Industrial Organization: Theory and Practice, Second
Edition, Pearson Education.
Yesilada, E. (1994). Kibris’ta Turizm [Tourism in cyprus], Grafik Sanatlar Matbaacilik ve Ambalaj
Sanayii A.S., Istanbul.
NPP-National Physical Plan, City Planning Department, 2014.
Url-1 http://www.meydankibris.com/haber-lefke-ilce-oluyor-9504.html
Url-2 http://www.havadiskibris.com/halk-girneye-sahip-cikti/
Url-3 http://www.kibrisgazetesi.com/doga-cevre/kumyaliya-turizm-alani-ekonomik-akla-
uygun-degil/9428
51
9. APPENDIX A
Table A1. Bed capacities of some hotels, 2015
Hotel Bed Star
Acapulco 1578 5
Kaya Artemis 1484 5
Noah's Ark 1232 5
Salamis Bay Conti 850 5
Cratos 820 5
Merit Crystal Cove 632 5
Merit Park 580 5
Kyrenia Oskar 514 4
Merit Royal 508 5
Club Lapethos 482 3
Jasmine Court 392 5
Vuni Palace 352 5
Malpas 342 5
Dome 320 4
Rocks 314 5
Pia Bella 288 4
Golden Tulip 278 5
Grand Pasha 256 5
Savoy 256 5
Merit Lefkosa 244 5
LA Holiday Center 224 4
Deniz Kizi 222 3
Olive Tree 210 3
Palm Beach 204 boutique
The Colony 200 5
Korineum 172 Boutique
Figure A1. total occupancy rates at tourist Accommodations (1977-2000)
50,0%
45,0%
40,0%
35,0%
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0%
81
91
84
94
77
78
79
80
82
83
85
86
87
88
89
90
92
93
95
96
97
98
99
00
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
Figure A2. Percentage of all tourists who stay at hotels
70,0%
60,0%
50,0%
40,0%
30,0%
20,0%
10,0%
0,0%
81
91
01
11
77
79
83
85
87
89
93
95
97
99
03
05
07
09
13
15
19
19
20
20
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
53
10. APPENDIX B
incentives applicable for January 1, 2010 – December 31, 2013 (tour operators and
travel agencies)
charter flights from countries other than Turkey:

50 euro incentive for each foreign tourist from countries other than Turkey who stay at least
seven nights in approved tourist establishments. Plus 15 euro advertisement subsidy per
tourist for the tour operator. Plus 0.7 euro if the accommodation is at 1-,2-, or 3-star hotels, or
Karpasia ECO Tourism area accommodations.
5 euro subsidy to the travel agency for each accommodated tourist.
incentive for each charter flight:

(average number of tourists per flight cannot be less than 108)
Average occupancy rate Per flight subsidy (€) if the total Per flight subsidy (€) if the total
per flight (%) tourists is less than 10000 tourists is more than 10000
60-64 2000 3500
65-69 2500 4000
70-74 3000 4500
75+ 3500 5500
one time subsidy for each tour operator:
total number of tourists Subsidy Amount (euro)
1500-4999 15,000
5000-7499 25,000
7500-9999 55,000
10000-14999 100,000
15000-19999 200,000
20000-24999 300,000
25000-29999 500,000
30000 + 850,000
Plus more subsidies for promotion and advertisement - but requires prior approval from the
ministry. 70% of these payments are to be covered by the central budget (Tourism
Development Project) and 30% by the Tourism Development and Promotion Fund.
Subsidies for Special interest (at least 10) and closed Groups (Seminars, conferences, meetings,
franchise holiday packages, at least 40)
Per tourist subsides (in euro)
turkey other
5+ Nights 35 50
7+ Nights 45 65
advertisement subsidy for Special interest Groups (at least 4-7 nights accommodation) given to
tour operators:
15 euro (20 euro if from the UK)
+0.8 euro if accommodated at 1-2-3 starred accommodations or Karpasia Area ECO tourism
establishments
There are additional incentives given (to tour operator or the airlines) for closed group tourists
on the condition that the subsidy is used towards discount on the ticket prices.
from Turkey:
Except June 1- August 31
Tour operator per tourist subsidies
15 euro (4 nights)
25 euro (5 nights)
35 euro (7 nights)
30 euros (4 nights only in February)
extra 15 euro for accommodating at 1-2-3 stars plus Karpasia area
5 euro/ tourist subsidy for the tourism agency
from Other countries:
40 euro (5 nights)
45 euro (6 nights)
7 nights:
Month Per tourist Subsidy ( euro)

April-May, Sep-Nov 60
Dec-Mar 65
June-Aug 50
PRIO Cyprus Centre
Tel: +357 22 456555/4
beach photo cover PRIO.qxp 02/04/2019 12:52 PM Page 3
Cyprus is known as a tourist destination with plenty of sunshine and beaches. With
the island’s division in 1974, key touristic areas, with their accommodations and
Sector analysis
other facilities, remained in the island’s north and had the potential to generate in North Cyprus -
revenues for the Turkish Cypriot administration there. Due to the clientelistic (and
sometimes corrupt) activities of policymakers in the north, the utilization and Tourism
allocation of these resources have not been handled very efficiently. Although the
island’s north receives a significant number of tourists each year, the impact of this
sector on the overall economy is questionable.
Tufan Ekici
This report discusses the development of the tourism sector in the island’s north Gizem Caner
since 1974. After we give an overview of the developments in this sector for the
entire island before 1974, we first discuss the supply and demand for tourism
services in the post-1974 period. We introduce the number of touristic
establishments that came under the control of the Turkish Cypriot administration
after the separation. Section 4 then introduces a map of north Cyprus comparing
key measures in this sector between 1974 and 2016. Given the high level of
emphasis placed on this sector by the lawmakers in the north, we also discuss the
sector’s impact on overall economic development in section 5, with a separate
section on the casinos that have become a key contributor to this sector.
Overall, then, the report provides an overview of the uneven developments in the
north Cyprus tourism sector since 1974. The report includes statistics that were
previously publicly unavailable and a map that gives a clear picture of changes in
this sector.
ISBN 978-82-7288-900-4 (online)
PCC REPORT 4/2018

PRIO Cyprus Centre
Tel: +357 22 456555/4

Sector Analysis in N. Cyprus-Tourism

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2. SUPPLY AND DEMAND FOR TOURISM

2.1. A brief overview of tourism developments before 1974

city Bed nights Av. occupancy rate

city 1950 1960 (1961) 19741

Figure 2.1 – number of tourists, 1960-1974

table 2.3 – Foreign exchange earnings and bed capacities, 1960-1974

number Hotel bed Foreign exchange Foreign exchange

2.2. tourist developments after the 1974 division: 1974-1983

table 2.4 – Hotel bed capacity by region, 1974-1975

Districts and mountain areas 1974 1975

table 2.5 – number of tourists and bed nights, 1979-1984

tourist tourist total tourist Bed Average

table 2.6 – Percentage of tourists by reason for travel (1979-1984)

year Holiday Business other

table 2.7 – Percentage of tourists by type of accommodation (1979-1984)

year Hotel tourist Apt Pansiyon other

Source: Statistical yearbook of 1984, SpO

table 2.8 – Duration of tourist stays

Source: Statistical yearbook of 1984, SpO

table 2.9 – number of tourists by age category (1979-1984)

year 0-14 15-19 20-24 25-29 30-44 45-64 65+

Source: Statistical yearbook of 1984, SpO

2.3. early years of the new state: 1984-2000

target Actual Difference

10 Translation by the authors.

table 2.11 – comparison of targets for the tourism industry

1992 1997 (target) 1997 (actual)

Figure 2.2 – Distribution of turkish and Foreign tourists (1983-2000)

Hotel Guest occupancy Average nights total Bed

11 See section 3.2.3 for a discussion on market competition.

year 1 Star 2 Stars 3 Stars 4 Stars 5 Stars

3. THE NEW MILLENNIUM: 2001-PRESENT

3.1. the demand

table 3.2 – charter Flights and tourist numbers, 2012-2014

year # of flights tourist total % of total foreign tourists

Source: Turkish republic nicosia aid Office reports, 2012, 2014

3.1.1. Duration of stay

Accommodation type tourists % Bed nights % Avg Duration

3.1.2. choice of hotel type

Source: Statistical yearbook of Tourism (2002-2015, available years)

Figure 3.1 – Preferences of turkish tourists (2010-2015 average)

SSecond Holidayy Village

Figure 3.2 – Preferences of Foreign tourists (2010-2015 Average)

3.2. the supply

Figure 3.3 – the trend in number of tourist accommodations (including guesthouses)

Figure 3.4 – occupancy rates of touristic establishments, 2000-2015

table 3.5 – occupancy rates of various countries (2012-2016)

2012 2013 2014 2015 2016

table 3.6 – occupancy rates of different accommodation types (selected years)

type 2002 2009 2011 2015

3.2.2. type of tourist accommodations

Figure 3.8 – the share of bed capacity of 5-star hotels, 2000-2015

table 3.7 – Distribution of accommodation by type and bed capacity (2015)

category no of Units no of Beds

3.2.3. competition in the market

table 3.8 – Distribution of bed capacity (2015)

% of establishments % of total bed capacity

table 3.9 – Various competitiveness measures