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Ha - about time they woke up and smelt the cheese!

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Ha - about time they woke up and smelt the cheese!

Postby Z4 » Wed Apr 01, 2009 2:06 pm

Tavernas need to offer better prices without state handouts

IN THE END all the parties agreed with the government’s position not to reduce the VAT charged on restaurant bills. The government stood to lose €20 million a year in revenue from this reduction, said finance minister Charilaos Stavrakis, at a very difficult time for the state.

The president had sent the bill with the amendment, added by deputies, back to the legislature as it was unconstitutional (the legislature does not have the right vote amendments that affect government revenue or expenditure), but there was another reason for not including restaurants in the bill to help tourism. According to Stavrakis, 90 per cent of restaurant custom was local.

Restaurant owners are not happy with the development, but they are deluding themselves if they genuinely think that they would get more customers if VAT charged on bills was reduced from eight to five per cent. There would have to be price reductions much bigger than a paltry three per cent if restaurateurs want to see more people visiting their establishments at a time of recession.

The fact is that eating out in Cyprus, especially in Nicosia, is very expensive. Nicosia is expensive even when we compare its eateries to those in big European cities, where average wages are also higher. For as long as customers were happy to pay for over-priced meals with their credit cards, the restaurants were doing good business but as people have become more careful about their spending, business has gone down.

But why has eating out become such an expensive social activity in Cyprus? One of the island’s advantages, which contributed to attracting tourists, was that eating out was quite cheap and people felt most eateries offered good value for money. This is certainly no longer the case, even though the number of places competing for customers has grown significantly over the last 10 years or so. But despite the increased competition, prices have kept rising. Worse still, even the small, modest eateries at which you could dine relatively cheaply have become extinct.

It is difficult to explain why this has happened. Admittedly, the prices of foodstuffs have been rising as have labour costs, but this still does not justify the exorbitant prices. We can only conclude that restaurants have been working with very high profit margins because they could get away with it while the economy was booming. But now market conditions have changed radically restaurants will be forced to change their pricing policies in order to survive.

This is no bad thing and it is just as well the government decided against the lowering of VAT for restaurants and taverns, the owners of which need to find ways of offering more competitively priced meals, without state assistance.



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About time in my opinion!
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Postby Svetlana » Thu Apr 02, 2009 4:53 am

I noticed that some Tavernas are accepting payment in UK£ at a preset rate of £1 = €1.10, effectively a discount of around 7% assuming the current exchange rates.

No doubt we will have BOGOFs next!

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Postby Z4 » Thu Apr 02, 2009 9:52 am

Hi Lana, where abouts?

Good idea but won't really make too much difference but all counts I guess!
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Postby Get Real! » Thu Apr 02, 2009 1:20 pm

Get it through your thick heads… nobody is interested anymore in selling kebab & chips by the seaside to the Brits for two pounds:

“Russian billions nearing 50 per cent of foreign deposits”

http://www.cyprus-mail.com/news/main.php?id=44953

It's over...
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Postby Z4 » Thu Apr 02, 2009 1:40 pm

Get Real! wrote:Get it through your thick heads… nobody is interested anymore in selling kebab & chips by the seaside to the Brits for two pounds:

“Russian billions nearing 50 per cent of foreign deposits”

http://www.cyprus-mail.com/news/main.php?id=44953

It's over...


Get off your high horse GR - restaurants are suffering and you need the Brit money!

One other thing, Cyprus now accepts the Euro :roll:
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Postby purdey » Thu Apr 02, 2009 9:49 pm

I hate to admit it but I think GR is on the right tracks. I think the time of cheap tourism to Cyprus is over. Brits are now starting to plump for the AI rather than the two week B&B.
Russians do spend on average alot more than the Brit but it is in luxury hotels rather than the run of the mill tourist hotels. Cyprus will have it's wish in the next 5 years (imo). Local tavernas, cheap hotels and holiday apartments will close or go bust, unless they open it up to the average Russian tourist if they can pull them away from Egypt.
Top end of the market is doing well, long may it continue. By the way look out for this summers Replay Jeans, new styles, new to Cyprus. Prices from £120.00, T-shirts from £40.
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Postby Jerry » Thu Apr 02, 2009 10:31 pm

Half the tourists arriving in Cyprus are from the UK, 60,000 Brits living in Cyprus and you don't need their money? What will happen to the already depressed Cyprus economy and property market if they all bugger off?
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Postby Svetlana » Fri Apr 03, 2009 7:14 am

I am sure things are different in other parts of the island but Pafos has long relied on the British £ and tourism is already suffering badly - it is going to be a lean summer here and sadly, many jobs have been, and will be, lost. The reality is that many tavernas in Pafos do rely on selling kebabs to the British.

Already many people who were working in 'property' are out of work; the tourism situation will further compound the problem.

Restaurants in Cyprus facing closure
By Bejay Browne
(archive article - Sunday, March 29, 2009)
RESTAURANT closures could be a reality within two months unless the government takes definitive measures to help ease the effects of the global economic crisis, Neophytos Thrassyvoulou, the president of the Federation of Restaurants in Cyprus said yesterday.

The stark warning came after President Demetris Christofias refused requests to lower VAT on food from 8.0 per cent to 5.0 per cent, Thrassyvoulou said. “The federation disagrees with the President’s decision,” he added.

“Also from the start of the year, we can see that all of the goods suppliers are no longer giving credit facilities to restaurants, this means if this continues for the next two months we will inevitably see the first signs of the affects of the economic problem, and that will mean restaurant closures."

Thrassyvoulou said the restaurant owners also disagreed with the Finance Minister “who says that 90 per cent of restaurants are busy with local customers from Cyprus. We say areas such as Paphos, Limassol, Larnaca and Ayia Napa survive on tourist custom,” he added.

Thrassyvoulou said staff and owners of restaurants were ready to demonstrate over the government’s “inflexible approach” to their plight, and plan to protest next week at a time and place that has yet to be decided.

According to Thrassyvoulou, the restaurant industry “is at its lowest ebb”. "Obviously this is due to the decreasing number of tourist arrivals," he said. "We’re showing a drop in custom of 50 per cent, compared with the same period last year; this applies to all the tourist areas."

He advised the restaurateurs collect their figures based on the numbers of tourists who eat out, and pointed out that they don’t include the number of ‘all inclusive’ tourists, as their meals are provide by hotels.

"This is the reason that we have different figures from the CTO," he said. "They give out the numbers of arrivals in Cyprus, they must differentiate and split their figures into the correct statistics, it’s very misleading," he pointed out.

The government seems to be pinning their hopes on the Russian market to help turn around the dire situation, but according to Thrassyvoulou, there hasn’t been an increase in Russian visitors to Paphos. He believes Limassol is cornering most of this market, with Paphos and Ayia Napa missing out.

"Already the restaurants are trying to have special offers and lower prices, and the federation is going to form a company, which will be able to purchase goods at a cheaper rate, and then be able to pass this benefit onto the customer,” he said." This crisis is happening all over Europe and we must do something to help."

"But", he added, "We can do nothing without the officials. We need the municipality and the government to help as well."

Thrassyvoulou said the restauranteurs believe the President could help by using his position to make all of the ministries understand that anything the government will do has to be for the tourism industry as a whole, and not just for the hotel industry.

This is a very important step for the survival of businesses and for visitors themselves,” he said.

"We are very worried and we need the government to help, we have lost at least half of our business.”

Paphos restaurateur, Yiannis Solomou, who comes from a family of restaurant owners agreed.

’Everybody in the industry is at least 50 per cent down on last year, and last year was a bad time for us as well." Solomou believes there are fewer diners who are spending less.

"I have a Chinese restaurant in Coral Bay, and a large number of my customers are made up of retired British ex pats. They’re still coming, but they have to go out less. This is because of the drop in the value of sterling. They’ve lost a third of their pensions and their savings are now worth a lot less as well. They get next to nothing for their investments now," he added.

Solomou hasn’t increased his prices for the last three years in an effort to give value for money to his customers.

"We’re hoping to survive this year. Some will and some won’t. The problem is, I don’t believe we’ve hit the bottom yet," he warned.

Solomou believes that the hotels have to provide fully inclusive holidays, and half board offers, to encourage visitors to Cyprus, but underlined that this was of little help to the restaurants.

"I think the underlying problem is that we need someone strong and experienced as minister of tourism, who knows all about the industry and really understands it. But nepotism is rife here; this is what happens in Cyprus," he said.






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Postby Z4 » Fri Apr 03, 2009 10:07 am

Perhaps GR should write to Cyprus Mail saying that the report I posted is bull :lol:

Re: Russians, don;t they tend to visit Limassol ??
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Postby Sotos » Fri Apr 03, 2009 4:40 pm

If they charge too much then they should close down. Simple supply and demand.
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