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With over 12,000 short-term rentals currently in operation (and counting), Cyprus has become a hotspot for travelers seeking more flexible and often cheaper accommodation than traditional hotels.
According to Kathimerini's Dorita Yiannakou, Paphos leads the charge, followed by Famagusta, Larnaca, and Limassol. Even though tourism has benefited from this boom, overnight stays surged by over 15% last year alone, and the ripple effects are being felt in unexpected ways.
Hotel owners are sounding the alarm over what they see as unfair competition, especially as 1 in 5 tourists arriving at Cyprus’ airports bypass traditional accommodations entirely.
For locals, the downside is clear: the explosion of short-term rentals has drastically shrunk the availability of long-term housing, pushing up rents in popular districts like Limassol and Paphos. Families and young couples now face mounting difficulties finding affordable places to live, with more and more properties being pulled from the housing market to serve tourists instead.
This growing tension has pushed the Deputy Ministry of Tourism into action. A new harmonization bill, part of a wider EU effort, is set to crack down on unregistered rentals. Under this proposed law, platforms like Airbnb and Booking.com will be required to verify each property's registration number before listing it. Anyone operating without a license risks fines or even prison time.
Currently, only about 8,200 properties are registered, but officials believe there are thousands more operating under the radar. The government is also stepping up inspections to catch illegal listings, hoping to level the playing field for hotels, which must comply with stricter health, safety, and tax regulations.
Hotel owners are sounding the alarm over what they see as unfair competition, especially as 1 in 5 tourists arriving at Cyprus’ airports bypass traditional accommodations entirely.
Supporters of short-term rentals argue that the model offers affordable, flexible travel options and that the housing crisis has deeper roots, such as low wages and bureaucratic delays in housing development. But with housing pressure building and complaints mounting, the government now finds itself walking a fine line: supporting tourism growth while protecting local communities from being priced out of their own cities.
