Recovery of the Cypriot tourist industry following the Turkish invasion 1974

Abstract

The factors that give rise to the recovery of an economy following a military and political upheaval are of considerable academic and practical interest. Several countries have in recent years found their economic prosperity suddenly dissipated as a consequence of a major disruption. One such instance was Cyprus which, in 1974, was militarily invaded by Turkey, and the island split into two with no commercial or other intercourse between the two main sections. In particular the tourist industry which has been painstakingly built up over a number of years immediately lost the basis of its growth, with the main touristic districts of Famagusta and Kyrenia situated within the occupied north and the Nicosia international airport, the industries lifeline closed. In July, 1974, the reputation for stability, essential for the wellbeing of a sensitive industry like tourism, lay in ruins, yet within a comparatively short space of time the industry was restored to health, and the basis for its further growth re-established. This thesis is concerned with tracing the course of this recovery and of analysing the factors which proved decisive. The steps which needed to be undertaken in order to restore substantial earnings from this industry are considered, and the role the entrepreneural spirit of the Cypriot businessman as well as that of the institutional factors (such as the thrust of the tourist organisation and the financial support of the government) are examined. The thesis is also concerned with the effects and shortcomings of public policy towards the industry during the recovery phase. This thesis is based largely upon a detailed examination and evaluation of the various reports of government departments, the Central Bank of Cyprus and the Cyprus Tourist Organisation which contain both statistical and quantitative evidence relating to the collapse and subsequent recovery of the tourist industry. These reports reveal, in particular, the build up of capacity in the two recovery phases and the marketing policy which proved decisive.