As we go through a period of uncertainty we present you our own assessments about the now and the future of the tourism industry and AirBnB.
First, we would like to divide the tourist product into two separate categories. The first category is what we call mass tourism, which is highly connected with hotel tourism, and short-term rentals, which concerns villa and apartment rentals. From the data that we have collected, we see that there is a trend where tourists incline towards more privacy, So for the upcoming season we expect to observe a similar pattern as the last one. Last year a large portion of tourists when given the opportunity to travel, they searched for more private accommodations. Our belief is that property owners who did not panic and did not rush to add their property in the long-term rental market will be rewarded in 2021 but even more so in 2022 and the years that will follow as we estimate that the rate of return will be very high. Of course, we understand those who did it, and they are justified in worrying as this is an unprecedented situation and the truth is that last year it was not possible to have an idea of how the future will unfold. A year later and with the developments we observe, we believe that things will soon return to a more normal way of life.
Something that we see and is valid worldwide, no pre-bookings are expected before March – April and maybe a bit later as the market is stagnant. A general assessment is that like last year, this year the bookings are expected to be last minute. It will all depend on the general population vaccinations per country and especially in our strongest markets such as the United Kingdom and Russia. In the case of Russia, much is at stake since the EU has not yet approved the Sputnik V vaccine. On the plus side, Israel’s vaccination program, which is our third strongest market with 7-8% of total arrivals, is the best worldwide, with approximately 2% of the population vaccinated every day. We have also noticed a large increase in vaccination rates per country. More information about vaccination programs by country can be found at the following link.
Many of you may think that in the past Cyprus had turned to the category of mass tourism, where large hotels focused on all inclusive packages that included everything in the original price and justifiably ask “How can we compete with other markets in this new global trend?”
Regarding the future of short-term rental homes in Cyprus, we know that in the past many people invested significantly and we dare say that they were rewarded for the risk they took. This led to a trend where many ran to put their old properties and cottages on the platforms in order to get rich overnight. Many, however, did not realize that although this process is rewarding, some sacrifices are required. Things were even more difficult for those who tried to bring their properties to the short-term rental market last year as the results were disappointing.
In a way, we can say that this whole situation has led to a discard of the weak players and only the strong players will remain in the market, which is not necessarily a bad thing, as healthy competition will increase the quality of services offered in Cyprus. The times were difficult and they remain, but we believe that those who have endured and will endure will be rewarded for their patience.
In regards to the traveler needs as we have mentioned before, they are divided into two different categories. In the first category, we have travelers who choose all-inclusive hotels or group travelling and on the other side we have new generation travelers who are looking for the experience. Cyprus has a lot to offer to these new generation travelers, as it is as a very full destination that can offer many experiences to travelers. This is exactly the profile of the travelers who we believe in the coming years will start visiting Cyprus more often starting from this season. We expect these travelers to get to know the island better, something that over time will help change the way they perceive Cyprus abroad. This will help Cyprus become known for its rich history, its culture and its wonderful landscapes, not only for its good weather and its sandy beaches.
Let us not forget that new generation travelers when searching for a new destination spend many hours doing their research to see if this destination is attractive enough and has enough to offer them. Being aware of this market need, Airbnb, which is one of the most important players in the market, has designed a framework that provides experiences such as cooking traditional recipes, doing agro-tourism, fruit picking and more. This is something that is in high demand and Cyprus has a lot to offer. That is why we reiterate that those who invested properly and were patient in the end will be rewarded accordingly.
I would like to touch a little on the legal framework around the market. From what we see, things have started to stabilize as several steps have been taken to create a legal and fiscal framework on which all participants will act. Therefore, we have everything that is needed so that those who are active in the market can be considered legal. We understand that in the beginning the whole situation didn’t look very organized, but we should not blame Cyprus as this was something very new that in fact came and shook for good the reality of the tourism industry. It makes sense that it would take some time so that the right research could be done and this framework could be created which would make the operation of this market controllable.
Thus a general review of the whole situation shows that the vaccine will be a decisive factor for the restart of the tourism industry and we believe that it will be the guarantee that will provide security for both travelers to travel and in different countries to allow them to enter the country as vaccination helps both psychologically and practically. Right now, one of the biggest priorities around the world is the need to travel and on that, we have to include ourselves. We believe that as soon as the opportunity for vaccination is given, most of us will do so and will travel at the first opportunity. One thing we cannot be sure of is how many months it will take to vaccinate the general population as this is the biggest bet. However, we believe that the summer season this year will be very different from the previous one and we expect many last minute bookings.
As we go through a period of uncertainty we present you our own assessments about the now and the future of the tourism industry and AirBnB.
First, we would like to divide the tourist product into two separate categories. The first category is what we call mass tourism, which is highly connected with hotel tourism, and short-term rentals, which concerns villa and apartment rentals. From the data that we have collected, we see that there is a trend where tourists incline towards more privacy, So for the upcoming season we expect to observe a similar pattern as the last one. Last year a large portion of tourists when given the opportunity to travel, they searched for more private accommodations. Our belief is that property owners who did not panic and did not rush to add their property in the long-term rental market will be rewarded in 2021 but even more so in 2022 and the years that will follow as we estimate that the rate of return will be very high. Of course, we understand those who did it, and they are justified in worrying as this is an unprecedented situation and the truth is that last year it was not possible to have an idea of how the future will unfold. A year later and with the developments we observe, we believe that things will soon return to a more normal way of life.
Something that we see and is valid worldwide, no pre-bookings are expected before March – April and maybe a bit later as the market is stagnant. A general assessment is that like last year, this year the bookings are expected to be last minute. It will all depend on the general population vaccinations per country and especially in our strongest markets such as the United Kingdom and Russia. In the case of Russia, much is at stake since the EU has not yet approved the Sputnik V vaccine. On the plus side, Israel’s vaccination program, which is our third strongest market with 7-8% of total arrivals, is the best worldwide, with approximately 2% of the population vaccinated every day. We have also noticed a large increase in vaccination rates per country. More information about vaccination programs by country can be found at the following link.
Many of you may think that in the past Cyprus had turned to the category of mass tourism, where large hotels focused on all inclusive packages that included everything in the original price and justifiably ask “How can we compete with other markets in this new global trend?”
Regarding the future of short-term rental homes in Cyprus, we know that in the past many people invested significantly and we dare say that they were rewarded for the risk they took. This led to a trend where many ran to put their old properties and cottages on the platforms in order to get rich overnight. Many, however, did not realize that although this process is rewarding, some sacrifices are required. Things were even more difficult for those who tried to bring their properties to the short-term rental market last year as the results were disappointing.
In a way, we can say that this whole situation has led to a discard of the weak players and only the strong players will remain in the market, which is not necessarily a bad thing, as healthy competition will increase the quality of services offered in Cyprus. The times were difficult and they remain, but we believe that those who have endured and will endure will be rewarded for their patience.
In regards to the traveler needs as we have mentioned before, they are divided into two different categories. In the first category, we have travelers who choose all-inclusive hotels or group travelling and on the other side we have new generation travelers who are looking for the experience. Cyprus has a lot to offer to these new generation travelers, as it is as a very full destination that can offer many experiences to travelers. This is exactly the profile of the travelers who we believe in the coming years will start visiting Cyprus more often starting from this season. We expect these travelers to get to know the island better, something that over time will help change the way they perceive Cyprus abroad. This will help Cyprus become known for its rich history, its culture and its wonderful landscapes, not only for its good weather and its sandy beaches.
Let us not forget that new generation travelers when searching for a new destination spend many hours doing their research to see if this destination is attractive enough and has enough to offer them. Being aware of this market need, Airbnb, which is one of the most important players in the market, has designed a framework that provides experiences such as cooking traditional recipes, doing agro-tourism, fruit picking and more. This is something that is in high demand and Cyprus has a lot to offer. That is why we reiterate that those who invested properly and were patient in the end will be rewarded accordingly.
I would like to touch a little on the legal framework around the market. From what we see, things have started to stabilize as several steps have been taken to create a legal and fiscal framework on which all participants will act. Therefore, we have everything that is needed so that those who are active in the market can be considered legal. We understand that in the beginning the whole situation didn’t look very organized, but we should not blame Cyprus as this was something very new that in fact came and shook for good the reality of the tourism industry. It makes sense that it would take some time so that the right research could be done and this framework could be created which would make the operation of this market controllable.
Thus a general review of the whole situation shows that the vaccine will be a decisive factor for the restart of the tourism industry and we believe that it will be the guarantee that will provide security for both travelers to travel and in different countries to allow them to enter the country as vaccination helps both psychologically and practically. Right now, one of the biggest priorities around the world is the need to travel and on that, we have to include ourselves. We believe that as soon as the opportunity for vaccination is given, most of us will do so and will travel at the first opportunity. One thing we cannot be sure of is how many months it will take to vaccinate the general population as this is the biggest bet. However, we believe that the summer season this year will be very different from the previous one and we expect many last minute bookings.