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.