Should holidaymakers stay away from Cyprus?

Will Cyprus savers being hit by an EU bailout, affect Brit’s travelling to Cyprus?

As a country, Cyprus arguably faces its worse troubles since the 1974 Turkish invasion. Cyprus’ descent into economic crisis has led to an emergency loan of 2.5 billion from Russia in attempt to cover its financial deficits.

Cyprus

The crisis not only affects Cypriots but has also caught those in the UK with Cypriot bank accounts. UK military personnel and those in the British Government with bank accounts in Cyprus will be protected by the UK government but this is unlikely to extend to holidaymakers. So what should holidaymakers do to protect their position?

The first thing is probably not to open a Cyprus bank account! Luckily not many people will do this when going abroad, unless they are buying a property/timeshare.

So the immediate effect is likely to be minimal however what are the long term prospects for people looking to travel to Cyprus?

Despite its current financial crisis, Cyprus still remains a viable tourist destination. However this crisis combined with potential civil unrest is likely to put some people off, especially in the short term. This may mean cheaper flights to Cyprus as demand falls.

With Cypriots holding back on spending (in fear of losing more savings) there could be less activity in the shops which could lead to a further fall in prices. With domestic demand falling, the island will rely increasingly on attracting tourists to boost the economy. Again this is good news for the Brit travelling abroad.

The more British holidaymakers who pick up on this, the more chance the Cyprus bailout might come from the humble tourist rather than the European Union!

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