Dorita Yiannakou
A difficult summer season is expected for Cyprus’ hotel industry, as uncertainty caused by the geopolitical turmoil in the Middle East is dampening people’s appetite for travel and holidays. At the same time, concerns are growing over workers who could remain out of work throughout the summer season, as well as the risk of wider instability in the sector.
Despite the gloomy outlook, however, no hotel owners have so far requested financial support or repayment relief from banks.
Speaking during the presentation of the Bank of Cyprus's first-quarter financial results for 2026, CEO Panicos Nicolaou said the picture emerging in the tourism sector is far from encouraging, with business owners worried about revenues and profitability.
Nicolaou stressed that the situation is considered temporary and noted that the industry still has liquidity “buffers” from the previous two years, which were record-breaking years for tourism in Cyprus.
At the same time, hotel owners say the challenging tourism season ahead is unlikely to lead to lower hotel prices this summer. According to industry figures, cutting prices would risk damaging service quality and the country’s image, potentially leading to poor online reviews and harming future tourism seasons as well.
State support plan for hotels
Relief for hotel businesses is expected to come through a government employment support scheme for the hotel sector. The Ministry of Labor is currently evaluating applications submitted by hotel operators for a subsidy covering 30% of employees’ monthly salaries, up to a maximum of €1,324 per worker.
According to reports, 207 applications were submitted. However, only businesses that recorded, or are expected to record, a drop in turnover of more than 40% in April 2026 compared to April 2025 will qualify.
The ministry will also examine hotel occupancy rates. Under the scheme, businesses with occupancy below 60% in April compared with the same period last year will also be eligible.
Sources say the finance ministry has allocated €6 million for the support scheme, which will be implemented through the labor ministry.
The scheme applies to hotels and tourist accommodations that operated during April 2026, including units that remained open through the winter season and others that reopened by April 20.
Applications were submitted electronically through the government’s “ERGANI” system.
Eligible businesses may receive subsidies for up to 80% of their employees. During the subsidy period, workers will receive a state allowance equal to 30% of their monthly salary, while employers will be required to cover the remaining amount.
Authorities said checks will later be carried out to compare actual salaries declared to the Social Insurance Fund with the salaries submitted through the ERGANI system.
Hoteliers seek extended support
Hotel owners have also asked Labor Minister Marinos Mousiouttas to extend the support scheme through May and June, arguing that businesses need greater certainty to hire staff and operate safely during the summer period.
At the same time, industry representatives are calling for stronger promotion of Cyprus abroad and additional financial support, potentially at a European level.
Other sectors tied closely to tourism, including restaurants and food service businesses, are also seeking state support after being affected by the war in Iran and wider regional instability.
For now, the government says no decision has been taken either to extend the hotel support scheme or to introduce aid for other tourism-related sectors. Officials say authorities are adopting a wait-and-see approach until the duration and impact of the regional crisis become clearer.
