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Tourism Sector Achieves Record Growth and Sets Strategic Course for 2026

by THEFUTURE.TEAM

Unprecedented Growth Across All Levels

The tourism industry is marking historical milestones, breaking records and solidifying its resilience in a rapidly evolving economic landscape. Projections indicate that by 2025, the sector will reach new heights, with sustained momentum expected into 2026.

Strong Performance and Strategic Oversight

Deputy Minister of Tourism Kostas Koumis provided an in-depth overview of the sector during a recent session of the Parliamentary Committee on Economic and Budgetary Matters. He highlighted the notable increase in tourism’s contribution to Cyprus’s GDP, record-breaking revenue figures, and landmark visitor arrivals. This robust performance is complemented by enhanced air connectivity and the formulation of a new National Tourism Strategy, all of which are laying the groundwork for continued success.

Record Metrics and Future Projections

Minister Koumis expressed optimism regarding the pace set to continue through 2026. Key indicators include:

  • The approval of an updated National Tourism Strategy later in 2026.
  • Robust international marketing initiatives to elevate Cyprus’s global profile.
  • The introduction of a modern licensing and operational framework geared towards further enhancing the tourism product.

Notably, the tourism sector’s share of national GDP climbed from 13.3% in 2024 to 14% in 2025. Furthermore, between January and September 2025, visitor arrivals increased by 10.3% compared with the same period in the previous year and surged by 41% over three years. The first nine months of 2025 stand as the strongest in the history of Cypriot tourism, with Cyprus also recording the highest growth rate for overnight stays in the EU.

Budget Allocation and Investment Priorities

The tourism ministry’s budget for 2026 totals €74.6 million, with allocations strategically distributed to support promotional campaigns, enhance the tourism product through subsidy-linked initiatives, and cover operational costs. Among these expenditures, €27.7 million (37.1%) is dedicated to promotional campaigns, €14.9 million (20%) to tourism enhancement projects, and €19.5 million (25%) to operational initiatives. This comprehensive approach underscores the commitment to not only sustaining but also amplifying the sector’s growth trajectory.

Enhancing Air Connectivity

In the realm of air transport, Cyprus has made significant advances. Recent data from the Aviation Council International placed Cyprus second on a Europe-wide scale in improving air connectivity between 2025 and 2019, and top of the list in comparisons between 2025 and 2024. These improvements are largely attributed to the addition of direct flights to and from key airports in Europe and the Middle East.

Addressing Key Connectivity Vacuums

Deputy Minister Koumis also addressed existing connectivity gaps, notably the absence of a direct flight route between Larnaca Airport and Brussels. The Ministry of Transport has already initiated a competitive tender process to address this critical gap, further demonstrating a proactive approach to enhancing international accessibility.

Mercedes-Benz Posts Higher Profit Despite China Slowdown

by THEFUTURE.TEAM

Mercedes-Benz reported stronger-than-expected second-quarter results, lifting its shares on Tuesday despite mounting pressure from Chinese automakers and a weaker outlook for sales and revenue.

The earnings provided a boost for Europe’s auto sector, where manufacturers continue to grapple with tariffs, softer demand and intensifying competition from Chinese rivals. Volkswagen, Mercedes-Benz and BMW have all accelerated restructuring efforts in response.

Cost Discipline Lifts Quarterly Profit

Mercedes-Benz shares rose as much as 5.9% following the results before trimming gains to trade 3.5% higher by 1118 GMT. The company reaffirmed its profit margin guidance for its core passenger car business after reporting an adjusted return on sales of 4.0% for the second quarter, above market expectations and within its 3% to 5% target range.

“In an environment where some automakers are ringing alarm bells on their competitive positioning, Mercedes delivered a clear and confident message,” Morningstar analyst Rella Suskin said.

Second-quarter operating profit increased 22% to €1.5 billion ($1.7 billion), despite a 3% decline in revenue. Lower administrative and research and development costs, together with strong performances from the financial services and vans divisions, supported earnings, while the results also included a €131 million gain related to the planned sale of leasing subsidiary Athlon.

China Remains The Key Pressure Point

Despite stronger profitability, Mercedes continues to face a challenging market environment. Sales in China fell 30% during the second quarter, prompting the company to abandon earlier expectations for stable car sales and group revenue. It now expects both to decline slightly from a year earlier.

BMW also lowered its outlook in June following a deeper-than-expected slowdown in China, highlighting the pressure facing Germany’s premium carmakers. At the same time, Mercedes said Chinese manufacturers are increasingly expanding into European markets, although Chief Executive Ola Kaellenius said their focus remains on higher-volume segments rather than the premium market.

“But that is not a reason to sit back and be relaxed,” he said.

Manufacturing Shift Continues

Mercedes is also reshaping its manufacturing footprint. The company said its German factories will undergo a more aggressive push toward leaner production, although it declined to provide further details while talks with labour representatives continue. Production is also being expanded in lower-cost Eastern European locations, including Hungary, where the company is increasing capacity at its Kecskemet plant, as well as in Poland.

Chief Financial Officer Harald Wilhelm said the full-year margin for the passenger car division is expected to come in at the lower end of the company’s guidance range, reflecting a higher share of electric vehicle sales in Europe, which remain more expensive to produce and continue to weigh on profitability.

“We must continue to work flat out to reduce costs so that we can remain competitive on the prices of our products,” Kaellenius said.

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