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Cyprus Tourism Decline Narrows As Israeli Arrivals Surge

Cyprus recorded 582,754 tourist arrivals in July, just 1.1% fewer than the 589,116 visitors recorded in the same month last year, according to figures from the Statistical Service (Cystat). The latest total was also 5.7% higher than in July 2024.

For the first seven months of 2026, however, arrivals reached 2,238,769, an 8% decline from 2,432,129 a year earlier. The gap has narrowed from 10.1% at the end of June, when the monthly decline stood at 1.7%.

Israel Becomes A Major Source Of Growth

The UK remained Cyprus’ largest tourism market in July, with 185,981 visitors, accounting for 31.9% of arrivals. British tourism was down 2% year on year.

Israel, meanwhile, recorded a sharp increase. Arrivals rose 55.8% to 119,293, giving the market a 20.5% share and making it the main factor limiting the overall July decline.

Poland remained third despite a 15.6% drop to 36,912 visitors. Germany followed with 21,338, down 9.9%, while arrivals from Sweden and Denmark also declined.

Norway was another exception, with arrivals increasing 10.6% to 14,055. Romania, Greece, Austria, Switzerland, Hungary, the Netherlands and Lebanon all recorded declines.

France saw the steepest fall among the listed markets, with arrivals dropping 46.3% to 6,797.

Uneven Demand Across Tourist Districts

The differences between markets are also being reflected across Cyprus. Famagusta hoteliers reported strong demand from the UK, Israel, Poland, Scandinavia and Central Europe, while Switzerland and the Netherlands were weaker, partly because of reduced summer flight availability.

In Paphos, hotel occupancy is expected to reach 85-90% in August, with Israel potentially becoming the district’s second-largest market after Britain.

Holidays accounted for 85.2% of July arrivals, while 11.7% visited friends or relatives and 3% travelled for business.

Airport Traffic And Outbound Travel

The trend was also visible in airport traffic, which fell just 1% in July. More than 1.63 million passengers passed through Larnaca and Paphos airports, bringing the seven-month decline to 3.7%.

At the same time, more Cypriot residents travelled abroad. A total of 210,047 returned from overseas trips in July, up 12.3% from a year earlier.

Greece remained the leading destination, accounting for 38.5% of returning residents, followed by the UK at 7.1% and Italy at 6%. Poland and Germany each accounted for about 3.5%.

Holidays made up 75.2% of residents’ trips, followed by business travel at 13.7% and studies at 10.3%.

Retail’s AI Push Faces A Cybersecurity And Regulatory Reality Check

Artificial intelligence is becoming a strategic priority for retailers, with 80% of retail leaders planning to increase investment in the technology, according to EY’s latest CEO Outlook Survey. However, growing concerns over cybersecurity, customer privacy and regulation could complicate adoption across an industry already facing inflation, geopolitical uncertainty and changing consumer expectations.

Confidence In AI Comes With Risks

The survey found that 80% of retail leaders are confident in their ability to expand the responsible use of AI and customer data. Retailers are increasingly applying the technology to demand forecasting, inventory management, customer service and personalised marketing, seeking to improve efficiency and respond more quickly to market changes.

Yet adoption brings new vulnerabilities. EY found that 24% of retail leaders identified cybersecurity and data privacy as a leading business risk for the year ahead. Retailers manage sensitive customer information, payment systems and complex supply chains, making effective security and governance essential as AI becomes more deeply embedded in their operations.

The World Economic Forum’s Global Cybersecurity Outlook 2026 highlights the wider challenge: 87% of organisations reported rising cyber risks linked to AI vulnerabilities, while 94% expected malicious AI to have a significant impact on cybersecurity in 2026.

Regulation Will Shape AI Adoption

Regulatory frameworks are also influencing how quickly retailers can expand their use of AI. The European Union’s AI Act, China’s state-led governance model and measures introduced by individual US states are shaping the rules around the technology.

For retailers, compliance is becoming a strategic consideration, particularly for customer-facing applications that use personal data to personalise offers, automate interactions or analyse consumer behaviour. Regulatory missteps could carry significant costs in a sector where customer trust is critical.

EY Outlines Four Possible Futures

EY recommends that retailers plan for multiple outcomes rather than assume the current investment boom will continue uninterrupted. Its analysis draws on a four-scenario framework developed by Jim Dator of the University of Hawaii.

One scenario envisages constrained AI adoption as economic pressures, regulation, cyberattacks, legacy systems and poor data quality limit progress. Retailers in this environment may prioritise lower-risk back-office applications, such as finance, procurement, inventory and logistics, while customer-facing tools face resistance.

A second scenario anticipates continued growth, with sustained investment and widespread adoption. A third envisages deeper economic and social transformation as technology reshapes business operations. The fourth considers systemic breakdown, in which a small number of technology platforms control access to AI models and charge premium prices, potentially making advanced capabilities less accessible even to large retailers.

Governance Will Determine Competitive Advantage

EY’s findings suggest that investment alone will not determine which retailers benefit most from AI. Companies will also need robust cybersecurity, effective governance and strategies that can adapt to different economic, technological and regulatory conditions.

For a sector operating on tight margins, the challenge is to turn AI investment into lasting business value while managing the risks that come with greater dependence on the technology.

The Future Forbes Realty Global Properties
Aretilaw firm
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