Cyprus tourist income sinks, deepening recession

(Cyhel)

Income from Cyprus' vital tourism sector sank 16.

7 percent in the first 11 months of 2009, official figures showed on Tuesday, compounding the Mediterranean island's recession.

Tourism revenue, which forms about 12 percent of gross domestic product (GDP), plunged to an estimated 1.45 billion euros (2.07 billion dollars) in the period from 1.74 billion euros a year earlier.

In November alone, the drop was a slightly smaller 15.7 percent, as revenue from holidaymakers reached 61 million euros versus 72.4 million in the same month of 2008.

Tourism receipts for last year as a whole fell 3.5 percent to 1.79 billion euros from 1.85 billion in 2007.

Average daily spending by tourists in November was 69.2 euros, with Israelis splashing out the most, 138.4 euros a day, and Britons the least, 51.7 euros.

Cyprus' government had forecast a 10-percent drop in the sector's revenues for the entire year, which the latest data suggests was a conservative estimate.

The fall, which is coupled with an 11-percent decrease in tourist arrivals for the first 11 months, has been instrumental in the Cypriot economy going into decline.

The island is facing its worst economic slump in nearly four decades after going into recession with three consecutive quarters of economic contraction in 2009.

Poor tourism receipts forced the government to change its overall GDP growth projections from positive to negative, with the economy expected to contract 0.5 percent in 2009.

It is expected to grow by the same margin next year as the economy starts to pick up.

Bumper spending by holidaymakers helped Cyprus achieve GDP growth of 4.4 percent in 2007, easing to a 3.7 rise percent last year.

Most visitors come from fellow European Union countries, especially from Britain, Greece and Germany. Tourist numbers from Britain alone are down by more than 20 percent.