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Political instability, war, and tourism in Cyprus: the effects, management, and prospects for recovery.

During the past two decades, much has been written on the subject of tourism development in island microstates (Britton and Clark 1987; Butler 1993; Wilkinson 1989). Most researchers explore the dynamics of tourism evolution and the sector's impacts on destinations, and more recently, planning and policy as they relate to the need for sustainable development. Conversely, little has been written on the effects of ethnic strife, sociopolitical tension, or war on island microstates, although in many destinations (e.g., Fiji, New Caledonia, Sri Lanka) tourism development has been periodically affected by such circumstances (Burns 1995). This gap in the literature reflects a broader reluctance by most political scientists, policy analysts, and researchers to examine tourism's political nature, because the subject of tourism is often viewed as frivolous (Hall 1994).

In this article, we examine one dimension of the interconnection of politics and tourism, namely, the effect of sociopolitical turmoil on the sector's growth in small island-nations. Through a case study of Cyprus, we examine tourism's evolution and transformation on this embattled island, paying attention to the way in which the industry's long-term fortunes have been affected by periodic internal political and ethnic instability, war, and the island's ensuing partition. Furthermore, we investigate the persisting ramifications of Turkey's military intervention and discuss the lessons the divided Cypriot tourist industry provides for preventing acute crises, managing postcrisis ramifications, and implementing recovery strategies.

BACKGROUND

The Colonial Era

Large-scale tourism development in Cyprus only began after the island's independence from Britain in 1960. During the early 20th century few people visited the island, mostly travelers from neighboring countries. In 1938, 8,000 visitors were recorded and, by 1950, the number had modestly grown to 18,000 (Christodoulou 1992). Among the impediments to tourism's development were the island's poor accessibility and a lack of appropriate tourist facilities. Cyprus's distance from western and northern European markets and the existence of intervening tourist destinations offering similar attractions inhibited tourism's growth. Hot summer temperatures and diseases like malaria made the island an unpopular venue for long-term stays.

During the 1940s, the island's colonial government set up a committee to prepare a tourism development program for the island. However, many of the program's aims never materialized. The local population's rising anti-British sentiment, culminating in the 1955-1959 armed insurrection for independence by the island's Greek Cypriot majority (the Greek Organization of Cypriot Fighters [EOKA] uprising), placed the plans for tourism development on hold.

The Postindependence Era: 1960-1974

After independence, tourism development began in earnest. Both endogenous and exogenous factors influenced this growth (Ioannides 1994). Following the recommendations of various international organizations, including the United Nations' Program for Technical Assistance, a series of 5-year development plans emphasized tourism's development potential as an activity that would boost foreign exchange earnings and encourage economic diversification (Andronikou 1987).

A major recommendation was to develop Famagusta on the island's east coast as a seaside resort capitalizing on its high-quality sandy beaches [ILLUSTRATION FOR FIGURE 1 OMITTED]. Emphasis was placed on improving the standards of hotels, providing superior airport facilities, and promoting the island in northern European markets. Thus, the government allocated funds for the general organization and development of the industry and for the provision of favorable interest loans. Incentives aimed at local developers included long-term, low-interest loans for the construction of new hotels and the rehabilitation of existing ones, and provisions for the import of duty-free items such as furniture and equipment.

It took a few years for the island's tourism to truly enter its "development" stage (Ioannides 1994). By the late 1960s, the public and private sectors had become increasingly confident about the sector's benefits, especially since there was growing awareness of the increasing demand from northern Europeans for holidays in the Mediterranean. Cyprus benefited indirectly because the United Kingdom, the island's principal source of tourists, imposed heavy travel restrictions on British nationals by limiting the amount of money they could take outside the sterling area; this ban did not hurt Cyprus because it was then part of the sterling area. Thus, Cyprus, like Malta, became the target of increasing demand by tourists who may have otherwise visited the more traditional resorts of Italy and Spain.

Furthermore, during the late 1960s, the passing of legislation allowing foreign corporations to form partnerships with Cypriot development companies led to a spurt of tourism developments in the Famagusta and Kyrenia regions. By 1973 these two regions commanded more than half the island's total bed capacity, drawing approximately two-thirds of the 264,000 overseas tourists to the island (Ioannides 1994).

Despite tourism's phenomenal growth during the postindependence era, periodic political instability left its mark on the industry's evolution. In 1964, serious intercommunal conflicts, the ensuing threat of war with Turkey resulting in Nicosia's partition, and the relocation of Turkish Cypriots in enclaves caused a severe downturn in the number of tourists. Nevertheless, the impact of this trouble was short-lived and the number of arrivals began to swell. Other internal political problems in the late 1960s and early 1970s, particularly the terrorist campaign by the EOKA B' movement against government forces, appear to have had little impact on the industry's rapid growth. This is probably because the campaign's targets were located in isolated areas away from the main resorts.

CRISIS AND RECOVERY: THE POST-1974 PERIOD

The July 1974 Turkish invasion, following a military coup against President Makarios, caused the island's de facto partition into two separate political entities: the Republic of Cyprus in the south and the Turkish occupied north. In 1983, the Turkish-occupied area proclaimed independence unilaterally, calling itself the "Turkish Republic of Northern Cyprus" (TRNC), a state only recognized by Turkey. Since 1974 the two geographical entities have evolved separately. While the south has shed the handicaps inherited from the war and flourished into an affluent society, the north has straggled to achieve economic growth and escape dependence on Turkey. Consequently, tourism development in the two regions has also followed remarkably different trajectories.

Tourism Development in the South

Economic Revival through Tourism

The 1974 war devastated the Cypriot economy. Following military defeat, the Republic of Cyprus lost 37% of its area to the invading Turkish army. One-third of the island's population became refugees following the exchange of population between the two areas (Greek Cypriots moving south and Turkish Cypriots north). The south had to deal with many problems including rehousing a substantial part of its population, job creation, and the revival of its crippled manufacturing and agricultural sectors.

The tourist industry came to a standstill since two-thirds of the existing bed capacity and almost all the hotel accommodation under construction were in the north (Gilmor 1989). Nicosia International Airport (until then the island's sole civilian airport) was no longer operational. (It is now under the jurisdiction of the United Nations peacekeepers due to its proximity to the Green Line - the demarcation line between the two sides.) Following the war, these factors, combined with the general perception of political instability, frightened off tour operators and caused arrivals in 1975 to slump to 18% of their 1973 total. It appears, however, that the effects of war were short-lived. By 1976, tourism began to demonstrate rapid recovery with a 300% increase in arrivals during the previous year, and 3 years later, the 1973 total was exceeded.

The government of the south was a principal actor promoting tourism in the immediate post-1974 era. In a series of emergency action plans, the government prioritized the development of this sector. The plans stressed continuing ties with the main players of international tourism - the tour operators and airlines - in the markets of Britain, Germany, and the Scandinavian countries. A priority was to develop international airports in Larnaca and Paphos and upgrade the south's infrastructure. Also, the plans provided for financial assistance and incentives to the private sector, especially the refugee hotel owners from the northern parts of the island.

Between 1977 and 1987, tourist arrivals increased by 18% per year, exceeding the growth rate for other Mediterranean destinations (Gilmor 1989). In 1995, 2.1 million tourists visited the south, representing more than 20 million bed nights. More than 60% of the overseas tourists came from Britain, Germany, and the Scandinavian countries (Cyprus Tourist Organization [CTO] 1995). During the past two decades, the growth of the south's tourism infrastructure and superstructure, especially the accommodation sector, has been equally impressive. Between 1975 and 1995, and especially during the construction boom of the 1980s, the number of bed spaces increased by 1,560% to almost 80,000 (Ioannides 1994; CTO 1995).

Tourism's impact on the republic's economy has been major. In 1995, the industry accounted for about 20% of the gross domestic product (GDP) and tourism revenues totaled C[pounds]810 million (US$1.62 billion), representing 40.1% of total receipts from the export of goods and services (CTO 1995). The hotel and restaurant sector employed 34,100 persons, amounting to more than 10% of the gainfully employed population, and almost 100,000 persons were dependent either directly or indirectly on tourism-related employment. Although no data on the contribution of tourism to the south's living standards exist, officials express few doubts that the sector has had a positive impact (interview with Planning Bureau officials 1991). The south's average annual income surpassed $10,000 in the early 1990s, signifying it has now become an upper-middle-income country as defined by the World Bank.

Spatial Restructuring of the Cypriot Tourist Industry

Since the war, an interesting aspect of the republic's tourist industry has been the spatial relocation of tourism activities to coastal areas that previously had little or no such development. Tourism grew particularly rapidly in the Ayia Napa-Protaras-Paralimni region. Whereas in the mid-1970s these villages were small and isolated, in less than a decade they were transformed into urban areas with clearly defined recreational business districts catering to mass tourists. By 1992, this region controlled 44.6% of the south's tourist accommodation. In fact, between 1988 and 1992, the capacity of lodging establishments in the region had almost doubled (CTO 1992). Gradually, tourist development has crept into other coastal areas and, in recent years, Paphos and Polis have witnessed a radical transformation of their environments with tourist activities sprawling well beyond their city limits.

Tourism in the South: Blessing or Blight?

The rapid growth of the south's tourist industry following 1974 has proved a mixed blessing. Despite being the island's chief earner of foreign exchange and the economy's driving force, tourism has caused numerous undesirable impacts. Years of unchecked growth have created a situation where the ingredients forming the industry's backbone are severely threatened. Ribbon development of concrete monoliths has led to architectural pollution and endangered native fauna and flora. The volume of tourists has placed a burden on the island's meager water resources. Moreover, noise pollution and severe congestion, especially in coastal resorts, are among many problems leading to Cypriots' rising hostility toward tourists (Ioannides 1994).

Economic problems have also emerged including stagnant tourist expenditures and declining occupancy rates. In recent years, tourism's rapid growth has led to labor shortages. In 1992, the south experienced a shortfall of 11,700 workers, mostly in the construction sector and low-wage service industries. These shortages have drastically increased labor costs and, thus, many establishments now operate at marginal profitability (Andronikou 1993). To combat the labor shortage, the government passed legislation allowing the import of guest workers on a temporary visa (Phileleftheros 1992). Despite this problem, however, the leakage effect was minimized due to the use of local construction companies, endogenous production of hotel equipment, and the provision of local foods (Wilson 1992).

Perhaps the biggest threat to the south's tourist industry arises from the limited diversification of its tourism product, namely, its coastal-oriented mass-market image. Foreign travelers no longer consider south Cyprus a cheap destination compared to other alternatives. Despite the government's various efforts to attract a diversified clientele, the region remains vulnerable to competition from other destinations offering superior environmental quality or a broader tourism base (Ioannides 1994). Ironically, the relative pristine nature of the southern coast of Turkey and the northern part of Cyprus means that these destinations pose a threat to the future of the south's tourist industry.

Tourism Development in the North

A Tourism Sector under International Siege

The fortunes of the tourism sector in the Turkish-occupied northern part of Cyprus differ markedly from those in the south. Until recently, tourism development in this area was minimal and, even today, the noah receives only 350,000 tourists, 73% of whom are short-term visitors from Turkey (North Cyprus Homepage 1997). In 1992, tourists from Britain and Germany, the two leading sources of non-Turkish tourists, amounted to 24.9% of the total number of visitors (Lockhart 1994).

The north has a substantially smaller tourism accommodation sector than its southern counterpart. Although this region had most of the island's lodging establishments prior to 1974, just a handful is presently operating; the ones in Famagusta have not been used since the war, as this area is controlled by the Turkish army as a bargaining tool in the political discussions between the two sides. Other hotels were abandoned. Today, tourism is concentrated mainly in the Kyrenia (Girne) region with a secondary hub in Boghaz, just north of Famagusta. By 1992, the north had 33 hotels and 35 hotel apartment complexes, amounting to just 6,630 beds (Lockhart 1994). Nevertheless, this reflected an increase in capacity of 63% for the period 1987-1992 (North Cyprus Homepage 1997).

By 1994, the gross national product (GNP) per capita in the north was only US$3,000 and tourism contributed less than 4% to the GDP. Although net earnings from tourism increased substantially in the period 1982-1992, they lagged far behind those in the south (North Cyprus Homepage 1997). Employment in the tourism and trade sector accounted for 10% of the total labor force (Mansfeld and Kliot 1996). One reason for the slow growth of tourism in the north is that during the postwar period, the administration did not place emphasis on this industry, favoring rather the development of agriculture (Mansfeld and Kliot 1996). Only since 1986 has tourism featured as the north's best economic development option (Lockhart 1994). Also, despite northern Cyprus's strong economic dependence on Turkey, the latter has always been reluctant to support tourism development on the island because of negative public opinion on the mainland toward any form of aid for the region.

The lack of recognition of the TRNC by the international community has been the most important hurdle to developing the north's tourist industry. Northern Cyprus has been under a virtual boycott for two decades as its airports and seaports have been declared illegal by the Republic of Cyprus. No airlines are allowed to fly directly to northern Cyprus without first stopping in Izmir or Istanbul. This obligatory stopover adds considerable travel time, making flights to northern Cyprus from European markets fairly expensive (Lockhart 1994). Many travelers are dissuaded from visiting the north because their countries do not recognize the TRNC and if anything happens to them, they will be unable to seek help; all embassies are in the south. Also, tourists visiting northern Cyprus are not covered by travel insurance (interview with Public Information Office representative 1997).

Holidaymakers in the south are prohibited by Greek Cypriot authorities to enter the north for overnight stays. Similarly, the south does not allow tourists who have entered the north to cross the dividing Green Line. While it is feasible to obtain a pass at one of the Nicosia checkpoints to visit the noah during daylight, few tourists take advantage of this opportunity (interview with Public Information Office representative 1997). Recent heated disagreements between the two sides have led to periodic closings of the checkpoints. Moreover, tourists in the south who seek to visit the north may be turned back at the checkpoints by pressure groups who distribute leaflets emphasizing the noah's negative aspects. A recent message on the Internet asked people not to visit the north because of the alleged existence of endemic diseases, the low standards of medical services, and serious crime. The same message asked tourists to "kindly not visit occupied northern Cyprus and thus financially, morally, and politically provide support for the illegal and barbaric occupation of our homelands" (Kypros-Net 1997a).

Another barrier to tourism's takeoff is that despite the recent increase in the number of tour operators featuring northern Cyprus in their itineraries (North Cyprus Homepage 1997), most of these companies are niche specialists and do not cater to the mass market. By contrast, "large companies which sell package holidays to a wide range of destination [e.g., Thomson's] have never included Northern Cyprus in their brochures, in order to maintain amicable relations with Greece and the Greek Cypriots" (Lockhart 1994, p. 371). Furthermore, the reluctance of foreign companies to invest in what they perceive to be a risky political and economic environment has slowed tourism's growth. This situation has been ameliorated somewhat since the enactment of the 1987 Tourism Promotion Bill, which offered a variety of incentives to the private sector. That act prompted certain Turkish Cypriot expatriates to invest in the north's tourism sector. Nevertheless, despite the substantial growth of tourism-related revenues since then, "achievements in hard-currency yield from tourism are actually not as impressive as initially envisioned [because] one of the most attractive items in the incentive package offered by the government was the opportunity to remit profits from tourism to Turkey or other countries" (Mansfeld and Kliot 1996, p. 195).

Opportunities for the Future?

Despite tourism's recent growth in the north, the sector exhibits weaknesses. Hotel occupancy levels remain low (around 30%) reflecting a heavy reliance on Turkish tourists. These visitors spend between 3 and 5 days on the island and most do not stay in hotels (Lockhart 1994). Turkish tourists have minimal impact on the economy since the noah's currency is linked to the Turkish lira. While the average length of stay for non-Turkish visitors is longer (8.4 days in 1992), it does not compare favorably with that of the south (Lockhart 1994). Seasonality is also a drawback, being considerably worse than in the south (Ioannides 1994). Most tourists arrive between July and October; unlike other Mediterranean destinations, the north does not witness an upswing in arrivals during the Christmas holidays.

In addition to these problems, attempts to diversify the tourism product have been largely unsuccessful. For example, the south has recently emphasized the promotion of conference tourism and now attracts more than 30,000 meeting participants annually (CTO 1995). By contrast, because of nonrecognition by most of the international community, the north attracts fewer than 6,000 participants per year (Lockhart 1994).

Ironically, because of tourism's slow growth, the north has not witnessed the negative environmental and social problems experienced in the south. Landscape pollution has been kept largely in check, although the lack of effective planning mechanisms may portend a future disaster (Mansfeld and Kliot 1996). Whereas some resorts in the south exhibit high tourism densities (ratio of tourists to locals) (Ioannides 1994), densities in the north exceeded 1.0 only recently. However, because most tourists are Turkish and, thus, culturally similar to the north's inhabitants, the problems occasionally seen in the south from the interaction of northern Europeans and Greek Cypriots have not occurred (Witt 1991).

Interestingly, the low levels of tourism development can work to the north's advantage. Since the region's tourist industry only recently traversed from the stage of "exploration" to "involvement," there is time to avoid many of the problems that plague the south. It remains to be seen if the Turkish Cypriot authorities will learn from previous lessons or whether economic growth objectives will ultimately supersede environmental and other constraints. In the meantime, however, the north can play up its pristine, "out-of-the-ordinary" image, especially compared to the product offered by its southern counterpart, and seek to lure travelers looking for alternatives to mass tourism. The CTO acknowledges that in recent years a certain proportion of visitors to the south has leaked to the north because of increasing disgruntlement with the expensive, crowded, and conventional south.

POSSIBILITIES FOR THE FUTURE: OVERCOMING PREJUDICES?

The foregoing analysis demonstrates that despite Cyprus's small geographical area, tourism development in its two political entities has, since 1974, evolved along dissimilar trajectories. What, then, are the possibilities for the future of the island's tourism? Will tourists (including Cypriot citizens from both communities) ever traverse freely from one region to the other? Given the island's limited tourism product, how can the two sides of the island face up to the increasing competition offered by more diversified tourist destinations (e.g., Far East Asia)? There is mounting evidence, after all, to suggest that tourists from northern Europe and North America have become dissatisfied with conventional products such as the ones offered in Cyprus and other Mediterranean destinations, and are searching for new experiences in far-off destinations (Pooh 1993). In response to this growing competition, does it not make sense for both sides to begin an alliance promoting Cyprus as a single destination? (Despite their political differences, neighboring countries like Israel and Egypt feature together in jointly promoted tour packages, especially for long-haul travelers from Japan and the United States.)

The answers are, of course, contingent on a solution to the political differences between the two sides. Occasional meetings during the last 24 years between the leaders of the island's two communities have ended in stalemate. The optimism offered by confidence-building proposals in 1993, including the recommendation to reopen the Nicosia Airport and make Famagusta a United Nations (UN)-controlled enterprise zone for Greek and Turkish Cypriot businesses (Lockhart 1994), has waned. Recent rounds of intercommunal discussions between the two sides have made little progress, despite the fact that the UN and U.S. leadership urge an end to the dispute. Although Richard Holbrooke, the U.S. emissary to the region, has optimistically said that Cyprus's efforts to join the European Union (EU) are a positive step toward a solution (Kypros-Net 1997b), many hurdles need to be overcome; Turkey strongly objects to Cyprus's membership in the EU.

Whatever the outcomes of these steps are, evidently the two sides are separated by deep cleavages. Mounting mistrust between the two communities, not to mention propaganda by extremist groups on both sides of the fence, have done little toward mending relationships. If recent events provide a barometer as to the current situation, then the future seems dim. In 1996, violent scuffles between Greek Cypriot demonstrators and Turkish Cypriot police and extremist factions from the Turkish mainland broke out along the Green Line (Electronic Telegraph 1996). Turkey has repeatedly threatened military action against the south if the latter installs a Russian-built S-300 antiaircraft system. The Turks maintain that this weaponry will pose a threat to its territory since it has a striking distance of 150 km. The Greek Cypriots argue that the equipment will be installed purely for defensive reasons (Electronic Telegraph 1997). International pressure has convinced the Republic of Cyprus to postpone installation of the weapons a number of times.

Despite these differences, there are groups on both sides who have made overtures toward a peaceful solution to the problem. In the past few years, it has become easier for foreign journalists to visit the north and reporters from both sides occasionally hold meetings. The U.S. embassy and the Fulbright Commission sponsor organized day tours for Greek Cypriots to visit the north, provided they do not have their passports stamped and do not have to complete Turkish Cypriot entry forms. Recently, a UN-sponsored pop concert with singers from both communities was organized along the Green Line despite efforts by extremists to disrupt it. Unfortunately, however, not all such efforts have had a happy ending. In 1997, the Greek Cypriot authorities allowed a small group of Turkish Cypriot worshipers to visit a mosque near Larnaca. Later, a reciprocal visit by Greek Cypriots to a monastery in the Karpas peninsula fell through because the south's authorities thought the Turkish Cypriots had imposed unacceptable entry conditions (e.g., checking the list of visitors) (interview with Public Information Office representative 1997). Clearly, many obstacles continue to derail the prospects for tourism's future on the island. The industry in the south has reached a point where its adverse environmental impacts may lead to an eventual stagnation and eventual downfall. By contrast, tourism development in the north will continue to be stunted as long as the TRNC lacks recognition in the international community. Moreover, the tourist industry on both sides of the island remains vulnerable to periodic regional strife in the Middle East as witnessed during the Gulf War. In 1991, both sides of the island experienced a dramatic decrease in tourist arrivals, and despite the fact that Cyprus lies about 1,770 km from Kuwait, many operators canceled their package tours to the island. Media exposure, and especially the 24-hour coverage by global networks like CNN, likely contributed to the negative perceptions of Cyprus as a tourist destination (Hall and O'Sullivan 1996). The fact that most news broadcasts and reports originated from journalists in Nicosia did not help the island's image either.

EPILOGUE

This study explored the ramifications of sociopolitical turmoil and war for the evolving tourist industries of the two political entities of Cyprus. While the south has become one of the most prosperous Mediterranean states, the Turkish-Cypriot north is dependent on Turkey and remains internationally isolated. Tourism in the two political entities has followed dissimilar development courses. Although the south has witnessed an economic miracle with a successful regional tourism product, the north's tourist industry faces serious developmental barriers mainly due to political constraints.

Currently, Cyprus's artificially divided tourist industry is facing serious medium- and long-term challenges. If tourism on both sides is to survive and ultimately flourish in a competitive new market, it appears that the best way to do so is by promoting a single Cypriot tourism product. The two communities need to resolve prejudices and collaborate toward the creation of a unified and restructured tourism product. Even if a viable political solution seems distant, a joint approach presents itself as the sole prospect for tourism's future growth on the island. In a saturated mass tourism market where sun lovers constitute a major proportion of total arrivals, the development and promotion of new touristic experiences, along with novel marketing approaches, are a necessity. Also, representatives of the island's two tourism industries should intensify their influence on their respective administrations toward implementing mandatory "conflict moratoria," particularly during the tourist season.

Previous research has documented that sociopolitically unstable destinations are unpopular with tourists. Since there has been limited relevant research on both sides of the divided island, accumulation of knowledge from periodic comparative studies is crucial for developing a better understanding of local crises and the perceptions these create in prospective visitors. To achieve this, however, both communities must establish collaborative mechanisms allowing researchers free access to information on both sides of the island. Unfortunately, there remain many obstacles to such a development, including the prejudice both entities show toward each other, the lack of vision on the part of each community's leadership, and the south's unwillingness to discuss the north's tourism sector because this may be interpreted as recognition of the latter's legitimacy. Beyond standing in the way of managing the ramifications of war on the Cypriot tourist industry, these factors hinder an in-depth understanding of related problems. This case study does not exhaust the issues related to the impacts of war and political turmoil on tourist destinations. Rather, it makes evident the need for a systematic reevaluation of these issues to confirm tourism's vulnerability to geopolitical factors.

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Dimitri Ioannides is an associate professor in the Department of Geography, Geology, and Planning at Southwest Missouri State University in Springfield. Yiorgos Apostolopoulos is a visiting assistant professor in the School of HR and RM at Pennsylvania State University in University Park. Ms. Soshi Mansfeld created the map that appears in this article.
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Title Annotation:Special Issue on War, Terrorism, Tourism: Times of Crisis and Recovery
Author:Ioannides, Dimitri; Apostolopoulos, Yiorgos
Publication:Journal of Travel Research
Date:Aug 1, 1999
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