The large majority of tourist accommodation in Cyprus is operating illegally, according to a new report by the island’s Audit Office, with as few as one-in-10 properly licensed establishments in some areas.
Overall, 55% of accommodation providers are doing so without having gained the correct permissions, and another 22% hold only temporary licences. That means bona fide businesses form only 23% of the island’s hotel and tourist accommodation, the Audit Office figures show. In the Cypriot government-controlled Famagusta region, only 24 of the 241 tourist accommodation establishments are licensed—less than 10%.
Following the report, the island’s Deputy Ministry of Tourism recognised the issue, noting that over half of the territory’s tourist accommodation providers had never applied for a permit to operate. Tourism licensing is a perennial problem for the island, going back at least three decades. Officials say the backlog deteriorated further after an incentive scheme introduced in May 2013 came into effect with the aim of boosting the economy through denser developments and legalising unlicensed builds. This led to large-scale renovations and extensions that are yet to be assimilated into the permit system.
A compliance window of six years saw only 43 licenses awarded, meaning only six percent of hotels had a permit by 2023. That situation has now improved slightly, with the number of permits up to 94, or just under 13% by the end of 2024.
The last two years, meanwhile, have been taken up with consultations between the Deputy Ministry and various state bodies, with a view to ensuring a legal framework that applies safety legislation equally to all stakeholders. A programme of scheduled reminders to alert hospitality professionals to their obligations is also underway.
The picture is slightly better when it comes to self-catering accommodation, the Deputy Ministry said, with licensing drives increasing the number of operators with proper permits from 4,765 in April 2023 to 8,478 by 29 June 2026—a notable increase of 78%.
Given the proportion of operators doing business without licenses, the number of complaints about non-registered premises on the island is relatively low at 88 official reports.
Cyprus welcomed more than 4.5 million visitors in 2025, according to Cyprus Statistical Service data, a record-breaking number representing an increase of 12.2% year-on-year, but 2026 has been a challenging year so far, due to disruptions and travel alerts prompted by the war in the Middle East during the first and second quarters.
