Thoughts from the First Week in Ayia Napa
The first week of consulting visits for the Online Customer Experience Management seminar has ended, with visits to four hotels plus Waterworld implemented.
I’d like to thank everyone for their hard work and participation. As people are constantly asking me what I think of Ayia Napa, I thought I would share a few impressions which might be of interest to the trainees, but also to anyone else involved with tourism in Cyprus.
The destination has made tremendous progress in the twenty four years since I first visited in 1993. Infrastructure has improved with pavements and bike paths; clear-defined central avenues; an attractive waterfront and harbour.
There are, however, a number of key issues which could be examined for potential improvement.
The tourism product remains dominated by a mass-market 4-S product: sun-sea-sand-sex. The clubbing product is the gateway to that fourth S. This creates significant difficulties if tourism entrepreneurs and other stakeholders want to offer diversification or value migration.
There is nothing wrong with a 4S product, but it is pitched to the lower end of the mass market. This tends to ruin the experience for more sophisticated demographics, unless they are seeking to re-live their scabrous youth.
Moreover, the entire tourism product becomes defined by a single-customer profile / singe customer offer, reducing the chances for diversification or specialisation.
Let’s compare Ayia Napa to two tourism destination with similar challenges: Cannes and Las Vegas.
The centre of Cannes has achieved zoning restrictions that enhance property values. Enhancing property values means that tourism providers must offer a higher value tourism product: they can’t afford to break even off the lower-end mass. Cannes is full in the summer; more empty in the winter, but it continues as a year-round destination. In no small part, this is also due to local tourism and business tourism in the winter months.
A key lesson here would be that if Ayia Napa Municipality wants to gradually move the product up-market, it should carefully consider how zoning and town planning affect tourism product development and property values.
The question of whether everyone can or should be allowed to invest in tourism today remains to be answered. What are the minimum capital, knowledge and quality requirements for doing so?
Las Vegas is in many respects similar to Ayia Napa. It grew out of nothing in the 1950s: hotels in the desert. Las Vegas has executed a number of startling transformations, which we perhaps take for granted:
It has managed to whitewash and mainstream an essentially wasteful activity (gambling) which the average gambler has almost no chance to win, and infuse it with glamour and attraction.
It has managed to diversify away from gambling and into entertainment, including both family-style entertainment (dolphins, parks) and entertainment for couples and groups (concerts, shows, clubbing). A subset of the latter is weddings, stag nights, hen parties, etc.
It has developed conferences and events. The number of visitors coming to Las Vegas to attend a convention in 2016 were 10%, far greater than the number coming to gamble, at 4%.
In doing so, it has managed to even out the impacts of high seasonality: the divergence in monthly occupancy between the lowest month (December, occupancy 79.6%) and the highest month (July, occupancy 93.7%) is only 14.1%. In contrast, Ayia Napa is nearly all closed each winter.
Although we usually think of whales and high stakes tables when we think of Las Vegas, in terms of visitor numbers and betting activity the vast majority of gambling is done by middle- and lower-class consumers betting small stakes.
If you are interested in learning more about the Vegas business model, as well as learning more about Customer Experience Management and visitor profiling in general, please view the 2016 Las Vegas Visitor Profile.
I’ll expand more on the comparison between Las Vegas and Ayia Napa in my next email to you. But the key questions for Ayia Napa, Larnaca and Cyprus as a whole are:
Can better zoning and licensing procedures enhance the quality of the tourism product?
How should changes in public infrastructure accompany equivalent changes in tourism services and accommodation provided by the public sector?
Why is Ayia Napa under-performing as a convention destination? (Lack of flights, lack of good conference facilities, etc). Most hotels visited so far are marketing weddings with website content, but barely market conferences and events. This is not due to lack of infrastructure: I’ve seen some interesting conference facilities available. And there is a significant demand in European markets for training and events geared towards Millenials.
What can Ayia Napa do to develop higher quality events for tourists? The main events I have seen until now are large-scale beach parties or DJ events in venues like Castle. Limassol has organised a number of landmark events: the Limassol Wine Festival, the Cyprus-Russian Festival, the Limassol Marathon, etc. Paphos has developed a concert series in front of Paphos Castle (which was done quite a few years earlier than the European Capital of Culture). What is Ayia Napa doing?
5* Facilities with 3* Tourists
We need to think about tailoring tourism services (and quality) to customer segments. My experience in Ayia Napa so far, and in Paphos last year, points to a fundamental contradiction in effort and outcomes:
Every single hotelier and provider I meet wants to improve the quality of their product. Better food, better infrastructure, better staff, better online marketing. I have not met a single tourism manager or entrepreneur satisfied with the status quo. That is excellent and is to be commended.
Conversely, I have yet to see a tourism product where the majority of tourists meet the standards of the venue they are visiting.
What have I seen so far:
In one of the most successful all-inclusive resorts, a fat gentleman in a wife-beater, covered in tattoos, complaining about an unexpected € 400 bill for a wedding (and trying to get it reduced or cancelled with threats of complaints).
In the same resort, a lady who got married complaining on Tripadvisor about the service, at a time when she was laid up in the hospital because she was so drunk on her wedding night, she broke her foot.
A couple in a high end hotel lounge, sitting with their bare feet on the sofa. I’ve seen the same behaviour in the Crowne Plaza lobby lounge in Limassol, and in many other places. It is really inexplicable: a total lack of respect or self-consideration.
Complaints about full-day entry costs into Waterworld (€ 38/person) by British tourists. The cost of entry to Eurodisney outside Paris is about € 81/pax, while the cost of entry into Westminster Abbey is UKP £ 22/person (and your visit there lasts about 1 hour).
My conclusion here is that Ayia Napa is a resort trying to offer 5* service to 3* tourists. This may not be a sustainable business model. It is certainly a difficult one.
As seen with the Limassol Marina, this investment will most likely fundamentally affect the tourism product and positioning of Ayia Napa.
My concern is that until today, the Marina appears to be a black box in terms of how its development will affect Nissi Avenue and Makariou Street. In Limassol, cafes and restaurants in Enaerios and Makariou have been closing as the centre of gravity shifted from there to the Marina.
Another concern is a lack of visibility over quality. The Limassol Marina, for instance, has a Pizza Hut, Kentucky Fried Chicken and other offerings that significantly reduce the quality level compared to the high net worth individuals it is trying to attract with high mooring fees and astronomical property prices.
The guest experience on a Friday or Saturday night at Limassol Marina is not a good one: far too many teenagers clogging up the place and making noise. I have nothing against teenagers, but the planning of the Limassol Marina brings everyone together into the same space, resulting in insufficient parking space, traffic issues, noise and no small degree of irritation.
You can't position yourself as "Monaco in Limassol" and offer this type of customer experience.
Will the Ayia Napa Marina make the same mistakes? Will it pitch the entry price point for moorings and property high, then kill the product with a low price entry point entertainment for drunken package tourists or hysterical teenagers? I sincerely hope not.
This longer-term positioning and planning needs to be addressed if the Ayia Napa high street is to continue to survive in a limited season with price-sensitive tourists. And it needs to be addressed in a joint manner, by the Marina investors, the Ayia Napa municipality and representatives of the high street tourism sector.
A small amount of cooperation now will save a lot of pain and heartbreak later on, even if the initial results are not perfect.
Many more impressions coming next week, after the next round of visits.
Best regards, and happy clubbing.