Crisis-hit Cyprus returns to holiday island mode

After Cyprus\'s bloated banking sector was hit by a body blow this spring, sending the economy further into recession, cut-price summer holiday offers are attracting tourists but not the spending needed. On the pebbly beach in front of Aphrodite\'s Rock, where legend has it the goddess was born out of the foam, tourists bask in the sun and bathe in the clear azure waters of the eastern Mediterranean. \"I\'ve been here many many times, and the crisis didn\'t change anything for me,\" said John, a 55-year-old consultant from Britain. \"I just brought more cash. But I can see that restaurants are emptier. Everything is emptier.\" His caution about cash was prompted by the banks\' 12-day closure in March and long queues at ATMs after they reopened --seen on television and in newspapers around the world -- as a crippling EU bailout was being hammered for the near bankrupt country. The banks have long since reopened, and long queues almost a remote memory. The government has since put the priority on tourism, long a major money earner, as an anchor for the economy. As part of that policy, it has vowed to keep struggling flag carrier Cyprus Airways afloat until the end of the summer season, even as it sinks deeper into the red. \"Surprisingly enough, this season is starting better than last year, but people are on a narrow budget,\" said George Nicolaou, 48, owner of a hotel apartment facing the sea near Larnaca on the south coast. \"The bar and the restaurant are often empty,\" he said, but more than 50 percent of the rooms are booked out for the month of June, not counting last-minute arrivals. On the terrace of her restaurant in Paphos harbour, Eleni Ionannou also pointed to low-budget tourism and package tours. \"Many people are coming but not as many as expected... They don\'t spend anymore,\" she lamented. This time last year, she had 300 customers a day and that number has been halved. Instead of an average outlay of 25 euros ($32), the average customer now spends only 15 euros. After a fall in April, from 162,000 last year to 189,000, reservations and projected figures have recovered to last year\'s levels, based on statistics from travel agents and airlines, according to the Cyprus Tourism Organisation. The sector is a lifeline for Cyprus. Last year, 2.46 million tourists brought in 1.92 billion euros, or 10.5 percent of GDP. To counter all the negative publicity over the Cypriot economy, travel agents have been offering cut-price holidays, \"leading to the arrival of a class of tourist who spends less,\" said tourism official Doros Georgiades. Mauro Protopapa, a 29-year-old veterinarian from Italy, came with his archaeologist girlfriend. They paid a mere 50 euros each for their plane tickets and are spending 40 euros a night for accommodation. \"Before, it was too expensive but with the crisis prices have come down, and so we decided to come, especially for the archaeology and history of this country. Thanks to the crisis, we have been able to come, by paying less,\" he said. But tourism officials on the island, where the recession could reach double digits this year, see bleak days ahead despite the sunshine. Nicolaou bought his hotel in 2005, since when interest rates have more than doubled from 3% to 7%, as the banking sector collapsed. That has left him with debts amounting to more than projected profits for the tourism season. \"I\'m working 16 hours a day, and I\'m losing money every day. Our part is to make the costumers and the tourists happy, but we need the banks to do their part and lower the interest rates. They do not allow us to breathe,\" he said.