Subsidise tourism in the European Union for the benefit of the small and medium tourist enterprise instead of the big tour operators and whole sellers

The crisis is not anymore a ghost, it is a reality especially for the small and medium tourist entrepreneur, Cyprus is defiantly not the exemption, despite that the minister of Industry, Trade and Tourism Mr. Antonis Paschalides was assuring the Hoteliers and Travel industry that we would only have a 10% decrease the reality is completely different. The best numbers talk about a 20% decrease in occupancies and the worst numbers talk about 30%.

What that is all mean? It mainly means that the big tour operators are not fulfilling their compromise with the industry. The tour operators that last winter were asking for help and took from the industry subsidies of some million Euros are now not fulfilling their compromises. The crisis excuse is simply perfect, easy to pronounce and very easy to demonstrate that the crisis is responsible. Now , if someone digs a bit deeper you find out that things are not that easy, and let me bullet point my thoughts.

1. Big tour operators support the destinations in the Mediterranean that are outside the Euro zone since their currencies are not subject to euro ? dollar relationship and therefore are at least 35% cheaper in airport taxes and ground tourist services such as transfers and accommodation.

2. The money they use to push those destinations is the money they got from the bleeding destinations like Cyprus, who did not have other alternative than subsidizing arrivals. Conclusion, the rich European destinations subsidise through the private sector the development of tourism to their direct competitors.

3. The EU rules put barriers to direct subsidies but not in Turkey or Egypt. Over there things are done according to ?market rules?. Therefore the big guys have more manoeuvre space and can with not much trouble pull the strings to the suppliers for lower prices.

4. Low cost airlines are not interested in covering long hall flights from central and northern Europe . The costs are far too high and they cannot enter in the subsidy dance since most of them do not work with package deals. This keeps the Tour Operators alive in the aviation map since the destinations consider them indispensable for bringing in mass tourism even thought low cost airlines transport many more passengers than charter flights.

Suggestions:
1. Independent hoteliers and small hotel chains that do not have corporate liaisons with tour operators could create a new business model that would fit the Low Cost airline model and make a pressure group in the market place.
2. The state instead of subsidizing tour operators could use that money to reduce the airport taxes, increase online presence in an effective manner towards the direct user.
3. Incentivize the tour operators with indirect incentives such as tax reductions, VAT exemptions that have impact on their profit and loss account and not on their cash flow, like this they keep the pulse of sales but without using direct cash benefits.