The government is actively seeking to resolve a 20-year hotel licensing deadlock that has hampered the tourism sector in Cyprus. During a parliamentary session on Tuesday, Deputy Minister of Tourism Kostas Koumis announced a significant increase in the number of licensed hotels, which has risen to approximately 45% from just 5-6% earlier this year.
Hotel licensing: Progress in Licensing
Koumis addressed the House energy, commerce, industry and tourism committee, discussing the referral of an amending law intended to regulate the establishment and operation of hotels and tourist accommodations more effectively. He indicated that the issue of hotel licensing has persisted for two decades, initially stemming from early hotel renovations and intensifying between 2014 and 2018, following urban-planning incentives introduced in 2013.
Government’s Commitment
According to Koumis, the current administration has prioritised this issue since March 2023, when licensed hotels accounted for merely 5-6% of the total. He noted that this figure has now surged to around 45%, with 23% of hotels licensed through the basic law and an additional 22% via a parallel procedure under article 18.
Legal and Regulatory Challenges
During the meeting, Koumis articulated concerns regarding certain provisions of the proposed legislation, asserting they violated principles of equality, legality, and freedom of contract. He acknowledged that while the government is not opposed to granting another extension for hotel licensing, it is crucial to ensure that the tourism sector, particularly the hotel industry, can operate without disruption.
Ongoing Issues with Hotel Applications
Despite the advancements, Koumis expressed apprehension that over 50% of hotels have yet to submit their applications for licensing. He urged the need to investigate the reasons behind this lack of compliance, suggesting that some businesses might be anticipating another grace period or could be concealing irregularities. He reassured stakeholders that the state does not intend to revoke operating licences, as doing so would adversely affect the tourism sector.
Calls for Responsibility
“We are considering a new grace period, but hoteliers must also recognise their responsibilities,” Koumis stated. His comments highlighted the balance the government seeks to strike between supporting the industry and ensuring compliance with regulations.
Legal Perspectives on Proposed Changes
A representative from the legal service presented concerns to the committee, arguing that the rejected amendments infringed upon the separation of powers, created equality issues for compliant businesses, and could lead to increased budget expenditure, affecting the right to contract.
Future of Tourism in Cyprus
Committee chairman Kyriacos Hadjiyiannis emphasised the necessity for the executive branch to propose a viable solution, particularly in light of safety and health concerns within the hotel sector. Koumis further elaborated that the significant increase in licensed hotel beds—now at 70% compared to only 5.8% in 2023—serves as a promising sign of tourism growth.
Optimistic Projections for 2026
Looking ahead, the Deputy Minister shared optimistic early estimates for tourism in 2026, although he cautioned that forecasts remain uncertain due to the ongoing effects of the pandemic and the trend of last-minute bookings. He noted that Cyprus has strengthened its relationships with major tour operators, many of which have hosted large sales conferences on the island in recent years to reassess its appeal as a tourist destination.
Shifting Focus to Off-Season Tourism
Koumis did not dismiss the possibility of a slight increase in arrivals but underscored the necessity of changing how success is evaluated within the sector. He pointed out that the summer season has already reached capacity levels, prompting a strategic shift towards enhancing winter tourism. Compared to the winter of 2022-2023, arrivals have surged by 23% in the most recent winter season.
Commitment to Quality Improvement
“An increase in off-season tourism is something that makes us happy,” Koumis remarked, affirming that authorities continue to work diligently on enhancing quality indicators across the sector. This commitment to improvement is essential for sustaining the growth trajectory of Cyprus’s tourism industry.
