Cyprus’s hotel sector is heading into the peak summer season with occupancy averaging about 85% in July and August. While remaining strong by historical standards, it is still below last year’s record levels as rising energy costs and regional instability continue to weigh on tourism.

Bookings Improve, But The Market Remains Behind Last Year

Pasyxe director-general Christos Angelides said reservations have strengthened in recent weeks, helped by stronger demand over long weekends and a rise in last-minute bookings from neighbouring countries and the domestic market.

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“There has been stronger demand over long weekends, particularly through last-minute bookings from neighbouring countries and the domestic market, which has helped improve the picture,” Angelides said.

Even so, he said Cyprus continues to face a difficult operating environment, with higher energy costs linked to regional conflict and persistently high airfares adding pressure to the sector.

“We remain optimistic and continue to work together as an industry, but these are issues we must keep in mind,” he said.

Occupancy Holds Up, But Last Year’s Benchmark Was Exceptionally High

Angelides said nationwide hotel occupancy is averaging around 85% during the summer peak, compared with as much as 97% in August during last year’s record tourism season. Industry estimates suggest occupancy this year is running about 10% to 15% lower.

The Industry’s Next Test Is The Off-Season

The industry’s focus is now shifting to extending the tourism season into the winter and shoulder months.

“Our biggest hope is to build on last year’s performance during the November 2026 to April 2027 period. That is where we believe the difference can be made,” Angelides said, adding that stronger off-season demand could help offset the softer start to the year.

Despite the more challenging conditions, he said Pasyxe members remain committed to maintaining service standards and protecting Cyprus’ reputation as a high-quality destination.

Regional Tensions Continue To Influence Booking Behaviour

Separately, Actta president Haris Papacharalambous said the market remains behind last year’s pace, although the decline has so far been manageable. He noted that the Famagusta district has been affected more than other parts of the island.

Papacharalambous said arrivals have declined across almost all of Cyprus’ main source markets this year, with Israel the clear exception. Arrivals from Israel rose 170% in June compared with the same month in 2025, when the Israel-Iran conflict disrupted travel patterns.

He said one of the industry’s biggest challenges remains the perception of Cyprus as being exposed to regional conflict, particularly following the drone incident at the British Bases in March and the media coverage that followed. According to Papacharalambous, any renewed outbreak of violence in the region has an immediate impact on bookings.

“The effect is visible the very next day,” he said, adding that the latest developments have not yet triggered a significant downturn.

Outlook Points To A Softer Year, But Not A Collapse

Papacharalambous expects overnight stays across Cyprus to finish the year about 12% to 14% below last year’s record level. While tourism volumes are expected to remain historically strong, 2026 is unlikely to match the exceptional performance recorded in 2025.