Only 141 of the 728 hotels operating across Cyprus currently hold an operating licence, Paphos hoteliers association president Evripides Loizides said, warning that the problem requires immediate state intervention.

Speaking to the Cyprus News Agency (CNA), Loizides described licensing as one of the most serious issues facing the hotel industry, saying that it remained “at particularly low levels”.

“The responsibility does not lie exclusively with the hoteliers,” Loizides said, explaining that several objective obstacles continued to prevent hotel units from obtaining their licences.

In particular, he said that procedural and institutional problems needed to be addressed by the state, either through legislative intervention or amendments to the relevant regulations.

The matter has become more pressing ahead of January 1, 2027, when the temporary permits currently covering hotel businesses are due to expire.

Loizides warned that unless the necessary changes were made before then, the implementation of the new framework could have “serious consequences” for the industry.

He therefore called for the required corrections to be introduced before the beginning of 2027, allowing the outstanding licensing problems to be resolved before the temporary arrangements come to an end.

Meanwhile, referring to the course of this year’s tourist season, Loizides said that hotel occupancy in Paphos fell by around 10 per cent in July compared with the same month of 2025.

Nevertheless, he described the July performance as a clear improvement on May and June, when occupancy losses had reached approximately 15 per cent.

Loizides appeared cautiously optimistic about August, estimating that the month would perform at satisfactory levels, even though most reservations were now being made at the last minute.

However, he expressed strong concern about the remainder of the season. September bookings were currently around 15 per cent lower than last year, he said, with no signs so far of a substantial improvement, while October was expected to be even more difficult.

According to Loizides, Cyprus appeared to have lost part of its market because of the war, as several travellers had chosen other destinations for their holidays.

At the same time, the higher cost of living and wider financial pressures were causing consumers to postpone their decisions and make reservations “literally at the last minute”.

However, Loizides said weaker occupancy was not the most damaging problem facing hotels.

“The biggest blow to the hotel industry is not so much the decrease in occupancy as the significant drop in prices,” he told CNA, adding that hotel prices had fallen by more than 20 per cent.

This decline was significantly affecting hotel revenue and the viability of businesses, he said.

By contrast, Loizides described the performance of the Israeli market as particularly positive, with visitor numbers recording a significant increase, supported by the large number of air connections.

Should the same trend continue until the end of the tourist season, Loizides estimated that Israel would become Paphos’ second-largest tourism market after the United Kingdom.