The Cyprus short-term rentals market is experiencing a softer tourist season, with accommodation providers reporting declines in both occupancy levels and nightly rates as the sector also pushes for stronger action against illegal holiday lets.
According to the president of the Self-Service Tourist Accommodation Association (STEK), Constantinos Karakontis, demand has eased compared with last year’s exceptionally strong performance, although trading conditions remain better than those experienced in 2024.
Speaking to Alpha TV, Karakontis said the market had slowed noticeably.
“This year is certainly moving at a slower pace compared with last year,” he said, adding that occupancy levels are down by between 10 and 15 per cent, while average prices have fallen by a similar margin.
Occupancy and prices under pressure
The latest figures suggest Cyprus’ short-term rental sector is facing increasing competition amid a more cautious tourism market.
While the number of properties advertised on major booking platforms has remained broadly stable at between 12,000 and 15,000 in recent years, only around 8,500 currently hold an official licence issued by the Deputy Ministry of Tourism.
The gap between licensed and unlicensed accommodation remains one of the industry’s biggest concerns.
Calls for stronger enforcement of illegal holiday rentals
STEK is backing legislative changes that would link the government’s licensing register directly with online booking platforms such as Airbnb and Booking.com.
Under the proposed system, registration numbers could be verified in real time, allowing platforms to remove listings that do not hold a valid licence.
Karakontis said this would help eliminate illegal operators and improve confidence across the sector.
“When the registration number is not the real one, the platforms can at the same time delete the property from the platform,” he explained.
Industry representatives argue that stronger enforcement would create a fairer marketplace for compliant operators while improving consumer protection.
Building safety concerns highlighted
Karakontis also questioned communication between public authorities following the collapse of an apartment building in Germasogeia, where one apartment had reportedly been operating as short-term tourist accommodation.
Although the property had received the necessary tourism permit, he suggested information held by the local district authority regarding the building’s condition had not been shared with the Deputy Ministry of Tourism.
Rather than introducing additional administrative procedures, he said authorities should publish lists of buildings deemed unsuitable for tourist accommodation, enabling operators and visitors to identify potentially unsafe properties more easily.
Short-term rentals and the housing market
The rapid growth of short-term rentals has frequently been blamed for reducing housing availability and driving up residential rents across Cyprus.
However, Karakontis rejected those claims, arguing that much of the sector’s expansion has taken place in established tourist destinations, including Famagusta and Paphos, rather than in areas experiencing the greatest housing pressures.
He acknowledged that managing thousands of independently operated properties remains challenging but maintained that enforcement should focus on illegal accommodation rather than imposing further regulation on licensed operators.
Outlook for Cyprus’ holiday rental market
Despite weaker occupancy rates and lower average prices this season, industry representatives remain optimistic that demand will remain above 2024 levels.
For many operators, however, improving regulatory oversight and removing unlicensed listings from online booking platforms are now seen as essential steps towards creating a more sustainable and transparent short-term rental market in Cyprus.
Oh, I do love the self-serving PR language that STEK uses e.g. ‘softer tourist season’ and ‘slower pace’ than last year, with a 10-15% drop in occupancy levels. This ‘nothing to worry about’ attitude hardly fits the stark reality in such tourist hot-spots as Oroklini. There, typical short-term rental charges this year have shot up by a staggering 100-135%. We have been renting at various apartment blocks there for the past 10 years. There is no escape, as landlords (typically owning less than 5 units each) have swallowed the online booking sites ‘advice’ to price gouge and then copied the same pricing into their direct rentals.
Local businesses and residents all agree that this year’s fall-off in tourist numbers is much closer to 35% than 10-15% – and any wonder?!
No doubt the Cyprus Inland Revenue’s enforcement campaign to capture landlord rental tax evaders (notorious!!) is both welcome and also having an immediate effect. Now, holiday lets landlords must (a) charge 9% VAT on top to tenants, (b) include all utility charges within the rent as an estimate-in-advance (no more separate hard data consumption charges at the end of the let), (c) only accept tenant payments into the landlord’s bank account online (no cash payments allowed).
Could (a), (b) and (c) explain why short-let rents have suddenly shot up by 100-135%? With (b), are landlords trying to ensure they are not out-of-pocket from bad tenants running up massive utility bills by whacking on at least 100% to the actual rent? For example, in my personal experience in Oroklini a one-bed apartment formerly at Euros 850 for 4 weeks plus Euros 40 for utilities, is now advertised at Euros 2,000 (850 + 980 utilities estimate = 1,830 + 9% VAT = 1,995). Or, perhaps these landlords honestly believe that l’il ole Oroklini has suddenly become an exclusive destination in the South of France or the Caribbean.
Whatever the case, the net effect is already discouraging foreign tourists. We refused point-blank to capitulate to such blatant price gouging and only visited this year after 10 previous annual visits because we had use of a friend’s house. The recent tourist buzz in Oroklini is a mixture of anger and defiance. Only a fool would pay such idiotic rents that have doubled almost overnight. The overall mood is definitely ‘Boycott Cyprus’ unless and until landlords regain some common sense and scruples.