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Cyprus Embraces Sustainable Tourism As The Path To Enduring Prosperity

Cyprus is undergoing a fundamental transformation by shifting away from the traditional visitor-volume model toward a sustainable tourism paradigm that promises long-term resilience and enhanced global credibility.

Embracing A New Tourism Paradigm

At the annual conference themed “Sustainable Tourism – The Absolute One-Way Street,” Akis Vavlitis, the president of the Association of Cyprus Tourist Enterprises (STEK), emphasized that sustainable tourism is not a mere option, but the sole route to ensuring the destination’s future viability, societal cohesion, and international reputation. The era of prioritizing sheer visitor numbers has passed, making way for a model that responds to contemporary demands.

Addressing Climate And Consumer Shifts

Vavlitis highlighted that climate change is already altering the island’s dynamics—from the intensifying thermal burden during summer months to the pressures on its coastline and infrastructure. Combined with increasing pressures on natural resources, energy dependency, and evolving traveler expectations, these factors necessitate a transformative approach in Cyprus’s tourism sector.

Coordinated National Strategy For Transformation

According to Vavlitis, a fragmented approach will not suffice. He called for a comprehensive national strategy featuring clear timelines, measurable targets, and realistic outcomes. This strategy should foster coordination among government bodies, businesses, and society at large, supplemented by targeted grant schemes to facilitate progress in energy transition, the circular economy, and digital transformation.

Investing In Human Capital And Infrastructure

Vavlitis underscored that the modernization of tourism infrastructure must go hand in hand with investing in human capital—the true soul of hospitality. Upgrading spatial coherence, ensuring clean beaches, and mitigating visual and noise pollution remain vital to preserving residents’ quality of life while enhancing the guest experience.

Strategic Initiatives And The Road Ahead

STEK is actively advancing policy proposals to the state alongside financing suggestions for green upgrades, energy efficiency projects, and circular-economy innovations within hotels. The association is also leading campaigns to promote waste reduction, responsible consumption, and social responsibility, linking the tourism industry more closely with local economies and Cypriot products.

Charting A Sustainable Future

Echoing the sector’s historical capacity to adapt and innovate, Vavlitis called upon all stakeholders to unite under a bold, common vision. He stressed that sustainability is more than a slogan; it is a responsibility, an opportunity, and an obligation—the only pathway to a promising tomorrow for Cyprus, its people, and future generations.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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