Golf Property Development in Cyprus

In a small country like Cyprus, land is a finite commodity. When so much of the island’s economy is driven by land development mainly for residential purposes and to a significant extent for holiday homes and expatriate retirement residences, the concomitant land and construction cost inflation is the most predictable result.

When the cost of housing gets out of the reach of a rapidly growing proportion of newly married local couples, then I suggest that the wholesale licensing of so many holiday and retirement homes as part of golf course development projects takes on a social aspect also. This predicament, in a community that has traditionally been able to aspire to and attain family house ownership, is not without a certain trauma of adjustment.

When a large section of the public feels that unsuspecting villagers and others have been cheated out of their land holdings by land speculators and people who had inside information on, or could subsequently influence, land use plans, then we do have a social and a political issue also, even if this may be less widespread than believed.

When in mid-winter the government issues warnings to the public about imminent water cuts, there is surely an issue with the prospect of so many golf courses springing up all over the island. For we must be clear about this point, unlike Mr Severis' selective defence of golf courses, that when we talk about water requirements we should take into account not only the irrigation needs of the golf course greens, but also the considerable water consumption requirements of the 14 sizeable townships that will be developed around the golf courses. It is a fair assumption that these new residential communities will tend to have an above average per capita water consumption. Nor can the suggestion that desalinated water can be used for course irrigation be taken seriously, because its cost would seriously undermine the economics of development and operation.

When, reportedly, the government appears to be going to such lengths as to guarantee the maintenance and operation of the proposed golf courses for 66 years in the event of a developer abandoning a project, so as to reassure prospective golf course residence buyers, the public has every right to feel uneasy. If this is indeed true, it serves to underscore two things. First, that it is the land developers not the government that calls the tune. Secondly, that notwithstanding the apparent rationale of diversifying and enriching the tourism product, the real motivating factor behind golf courses is land development. Tourism provides the cover. Where else does government go out of its way to offer such guarantees to individual residence owners? The minister of tourism might as well offer personally to mow their garden lawns.
To suggest that other golf destinations are ahead of Cyprus and have "stolen" the market and, therefore, Cyprus has to hurry up with the proposed form and scale of golf course development, offering unduly generous incentives in the process, is an insidious form of political triangulation that cannot deceive the average citizen. Because – and this is my main point – the golf course development policy is more about land development than tourism development. But tourism, as I indicated above, provides an unassailable alibi. And I will explain why.

It is true that Cyprus is stuck in the tourism paradigm of a mass-market sun-and-sea destination that is increasingly losing consumer appeal. It is also true that Cyprus' underlying high-cost structure tends to make it uncompetitive in the price-sensitive mass tourism market. But we must also acknowledge that in the headlong rush to rebuild tourism in the post-invasion years we have developed formerly pristine tourism areas and sites in a piecemeal, higgledy-piggledy manner, and have accumulated a lot of sub-standard, unsightly and ill-suited accommodation establishments. At the same time as prices have been rising and the tourist product has been ageing, service standards have been declining.

The government's scheme aimed at withdrawing from the market a proportion of sub-standard tourist accommodation is certainly a step in the right direction. What the industry in fact needs is a drastic cull of the existing tourist accommodation stock, including demolition of many sub-standard properties, creating desperately needed open public spaces and improving the public realm, for both residents and visitors. Any money paid in compensation would be well spent.

However, getting rid of the dead wood of the tourist accommodation industry, though salutary, is not going to be sufficient by itself. The great bulk of the island's hotel stock will still be in the coastal zones, operating with a narrow product-market mix based on beach-oriented tourism. Even if the trend in the decline of traditional, passive beach-based holidays continues, which is most likely, the fact remains that hundreds of millions of pounds in investment are tied up in spatially fixed beach resorts. Which brings us back full circle to golf.

Golf can potentially be one of the most effective means of diversifying the island’s tourist markets, and in the process helping to bring about qualitative improvements to the destination product as well as alleviating seasonality. The corollary of this proposition is that golf courses will have to be operationally so closely linked to beach hotels as to help expand their product offer and boost their viability. Implicit in this notion is the expectation that golf courses will be freely available to all beach-based hotels and their guests.

However, in practice this is a promise that neither the government nor, much less, the developers can keep, for the simple reason that each golf course will come with a fairly large residential community of its own and quite possibly also an on-site golf resort. Understandably, owners of golf course residential units and golf resort guests will generate enough demand for, and enjoy preferential access to, golfing facilities. That will surely be part of the deal for them. This will mean that there will be little if any spare playing capacity for tourists staying in beach resorts and elsewhere, who are recreational golfers and wish to play, and who will more often than not find it hard and/or more expensive to use a golf course. By the same token, beach resorts will find it difficult to package and sell beach and golf holidays.

So, what is being touted as a boon for the tourism industry will not after all be much of a benefit to existing beach hotels, unless they are by ownership and/or operation affiliated with the new golf courses. But the vast majority will not.

Perhaps, a combination of different golf course development models should be explored, which place tourism at the centre of the policy rather than using it to camouflage massive land development projects. Such models would make less extensive use of land and water, incorporate robust planning approval covenants to ensure free and non-discriminatory access, and, why not, recognise the need to treat at least some golf course components as a form of public infrastructure supportive of the tourism industry and local recreation by using state-owned land and/or an element of subsidy provision. Municipal golf courses and golf association operated and managed courses, for instance, are not unknown in developed countries. So perhaps there is another route to the fairways.