Cyprus already has a thriving tourism sector and now it is hoping to give Monaco a run for its money in efforts to extend its attractions beyond the sun and sea season.
The island is soon to be home to Europe’s biggest casino complex, teaming up with Hong Kong’s Melco International Development on a €550 million property it projects will bring in an additional 300,000 tourists each year.
Melco has an impeccable gambling heritage. This latest venture – a 500-room “City of Dreams Mediterranean” – will feature 11 restaurants and 9,600 square metres of conference space, a surf pool and wellness centre, as well as 136 gaming tables and 1,200 slot machines.
Visitor numbers to Cyprus were already up 14.6 per cent last year to more than 3.6 million, with the UK the top tourist provider, followed by Russia. It is hoped the casino will boost economic output by about €700 million a year, with the creation of 2,500 jobs once all is up and running in 2021.
However, the odds are not certain on success. Tourists tend to view Cyprus as a summer destination only and although the government has been seeking to extend the season, promoting winter golfing holidays for example, the task is complicated by the demographic of many of the visitors.
Cyprus’s tourist base has a high proportion of package tourists seeking relatively cheap fun in the sun. This group may be less inclined to opt for luxury golfing or gambling breaks. Recent figures showed the island had about 800 accommodation units, with an overall bed capacity of 86,209. Just 224 of those locations were hotels however, with the remainder being apartments and holiday villages. The average price of a hotel room is little more than €100, about half the rate of Melco’s flagship hotels in Macau.
Existing tourists have also indicated they are not particularly interested in having a flutter. A PwC survey of visitors to Cyprus found more than half would “certainly not” visit a casino, with a further 12 per cent saying “probably not”.
Melco will therefore need to mine its deep expertise to develop new sources of visitors, in part leaning on its brand recognition in Asia to bring in the high rollers. Though this is the company’s first foray into Europe, Melco has already developed City of Dreams Macau and City of Dreams Manila.
The potential for increasing Asian visitors is significant. Projections for outbound travel and spending from China are staggering, with more than 200 million Chinese expected to travel overseas by 2020. Most tourism authorities around the world are angling for a slice of that and Melco can argue it’s well placed to attract them.
In the shorter term, Russians, Israelis and tourists from the Middle East are also likely to be targeted for luxury resorts on Cyprus. Melco has some experience with the Russian gambler, as it owns the Tigre de Cristal resort near Vladivostok in the Russian Far East.
Another issue, which should not be underestimated, is the different cultures of gaming between continents. Most casinos in Melco’s main market, Macau, adhere to a strict set of design principles to appeal to Chinese superstitions. For example, the colour scheme is invariably red and gold, which is thought to bring good luck.
Those colours are not to many Western tastes and might look singularly out of place on an island in the eastern Mediterranean. Success may therefore come from Melco’s ability to appeal subtly to a cultural melting pot, giving Chinese gamers the luck-bringing visual cues they expect while at the same time catering for Europeans and Middle Eastern tourists. Meeting all these challenges will be key to ensuring Europe’s biggest integrated resort doesn’t become its biggest white elephant.