Opinion
By Yannos Stavrinidis
Tourism directly accounts for 13% to 15% of Cyprus’ GDP, and more than 25% once we count the economic activity it supports along the way. Yet the latest figures show that hotel revenues fell by 7% to 8% in the 2026 season, while profitability dropped by as much as 10%. In other words, the tourists came, but at lower prices and on less favorable terms for hotels.
Cyprus took in €2.32 billion in tourism revenue in the first eight months of 2026. September then set an all-time record for arrivals, helping narrow the overall shortfall to 5.6%. For next year, 2025 remains the benchmark. The goal is to get Cypriot tourism back to those record levels.
There’s a contradiction in the Deputy Ministry of Tourism’s plans. It says getting advertising campaigns underway early is a priority, yet its 2027 budget is nearly 20% lower than the previous year’s. If we take it that €27 million is earmarked for reaching target markets, raising Cyprus’ profile and promoting air links, that cut poses a threat to the way the industry operates. It’s especially serious for an island that depends entirely on air connections.
To understand why hotel profits fell, start with the cost of flying. Higher energy costs are pushing up airfares. In that environment, a “win-win” deal with tour operators is a pipe dream. As soon as they see that hotels need to fill rooms, they press for terms that eat into hotel margins. That’s the paradox of this year. Arrivals held up, but margins shrank. It’s a fragile model that leaves hoteliers cutting prices just to fill their rooms.
For decades, we’ve chased the long-held goal of year-round tourism, with little to show for it. The reason is straightforward. Hoteliers are unwilling to stay open without flights or staff. Promotion helps, but winter flights are still scarce. Under those conditions, employment incentives alone won’t keep hotels open all year.
When profitability falls by 10%, hotels will put seasonal hiring on hold, cut back on maintenance, and buy less from local suppliers as they try to rein in costs. Even with full hotels, the benefits can stop at the lobby door.
There are opportunities, too. A report by French hotel group Accor forecasts a 75% rise in overnight stays by international visitors to Cyprus by 2036, compared with a European average of 42%. Making the most of that opportunity will take planning, action, and resolve. Cyprus needs to improve energy efficiency and make real improvements to what it offers visitors. That’s hardly going to happen when we spend €6 million on upgrades and €26 million on advertising.
The 2026 season should be a wake-up call for Cypriot tourism. We need to lock in flights now, release promotional funds before January and redirect employment incentives toward energy upgrades.
