Cyprus Hotel Association calls for Airbnb limits and overnight levy

The Cyprus Hotel Association (STEK) has renewed calls for tighter regulation of Airbnb-style short-term rentals, urging the government to introduce annual letting limits, an overnight levy and tougher enforcement measures as part of a comprehensive overhaul of the current legislative framework.

The industry body said the findings of the recent report by Cyprus’ Audit Office reinforce longstanding concerns about both the content of the existing legislation and, more importantly, its inadequate implementation and oversight.

Illegal short-term rentals remain a concern

In a statement, STEK said it has repeatedly warned that the current framework contains significant weaknesses, allowing unlicensed holiday accommodation to continue operating and advertising without meaningful inspections or effective coordination between the relevant authorities.

According to the association, the continued presence of unlicensed properties demonstrates that the existing system is failing to fulfil its regulatory purpose.

STEK argued that maintaining a simple registration system is no longer sufficient. Instead, it is calling for a comprehensive regime of monitoring, inspections and enforcement to ensure that every operator in the hospitality sector complies with the same legal obligations and safety standards.

Housing market under pressure

The association warned that weak regulation extends beyond creating unfair competition for licensed hotels.

It argued that the rapid expansion of short-term rentals is placing additional pressure on Cyprus’ housing market, making affordable homes harder to find for permanent residents while creating disruption within local communities. The organisation also highlighted concerns over neighbourhood quality of life and visitor safety where accommodation operates outside the regulatory framework.

Proposed changes to Cyprus Airbnb regulations

STEK welcomed the Deputy Ministry of Tourism’s intention to review the legislation governing short-term rentals, describing the reform as an opportunity to address longstanding weaknesses while introducing measures already adopted across many European countries.

Among its recommendations, the association proposes:

• More effective and systematic inspections to identify illegal accommodation providers.
• Stronger enforcement powers supported by meaningful administrative and financial penalties.
• Mandatory display of a property registration number on all online booking platforms.
• Greater cooperation between digital platforms and the authorities to remove illegal listings quickly.
• A maximum annual limit on the number of days a property can be let as short-term accommodation.
• Powers for local authorities to restrict or prohibit short-term rentals in areas experiencing severe housing shortages, excessive nuisance or declining residential amenity.
• A compulsory overnight levy for guests staying in short-term rental accommodation.
• Uniform standards covering safety, health requirements and insurance across all accommodation providers.

Learning from European markets

STEK said experience elsewhere in Europe demonstrates that successful regulation of the short-term rental sector depends on clear rules, effective supervision and striking the right balance between tourism growth, housing affordability and the interests of local communities.

The association confirmed it will participate actively in the public consultation on the proposed legislation, submitting detailed recommendations aimed at creating a modern, enforceable regulatory framework.

It said the objective should be to establish a level playing field across the hospitality industry while protecting visitors, safeguarding local communities, supporting the residential housing market and strengthening the long-term sustainability of Cyprus’ tourism sector.

Audit Office uncovers widespread licensing concerns

The Audit Office previously reported that, as of 6 May 2026, there were 8,464 licensed self-catering accommodation properties registered in Cyprus’s official Register of Self-Catering Accommodation.

However, a sample review of online booking platforms found evidence that a significant number of self-catering properties are being advertised and operated without being registered or are displaying inaccurate licensing information. According to the Audit Office, this makes effective monitoring and regulatory oversight considerably more difficult. In many cases, properties could not be identified at all.

Of the 20 properties in the sample that investigators were able to identify, only six (30%) were properly registered and held a valid operating licence. Ten properties (50%) did not display a registration number and appeared not to be listed on the official register. In a further four cases (20%), although a registration number was provided, it did not match the official records. The number either related to an expired registration or belonged to a different property altogether.

In its response, the Deputy Ministry of Tourism acknowledged that a number of properties advertised on online booking platforms are either not registered with the Ministry or fail to display a registration number. It said the issue is expected to be addressed through the implementation of EU Regulation (EU) 2024/1028, adopted on 11 April 2024. While the regulation entered into force in May 2024, its key obligations became applicable from 20 May 2026.

Hotels also face licensing shortcomings

The Audit Office’s report also highlighted significant compliance issues across Cyprus’s hotel sector.

As of 27 April 2026, only 168 of the island’s 728 hotels and tourist accommodation establishments had secured a full operating licence under the relevant legislation, representing a compliance rate of just 23%.

A further 158 establishments, or around 22% of the total, were operating under temporary licences because they met certain qualifying conditions.

That leaves the majority of hotels and tourist accommodation providers (402 businesses, or 55% of the total) operating without a full licence or any form of temporary authorisation. According to the Audit Office, the figures demonstrate that the temporary measures and regulatory concessions introduced in recent years have failed to deliver the intended improvements in compliance.