Cyprus tourism sector faces licensing crisis as audit reveals widespread illegal rentals

An audit report released in July 2026 by Cyprus’s Auditor General highlighted severe shortcomings in the licensing of tourist accommodation. Only about 23% of hotels and other tourist lodging were fully licensed, while roughly half of all establishments operated without any licence. The same audit found that of the 8,464 self‑catering units recorded in the national registry, a sample check showed just 30% were properly registered, 50% had no licence displayed and 20% displayed numbers that did not match the registry.

The findings have prompted the Cyprus Tourist Association and other stakeholders to call for immediate regulatory reforms. Proposed measures include systematic checks to remove illegal listings, stronger administrative and financial penalties, mandatory display of registration numbers on booking platforms, a maximum annual duration for short‑term rentals, powers for local authorities to restrict rentals in affected areas, a nightly stay fee, and uniform safety, health and insurance standards for all hospitality providers.

The report also criticised weaknesses in administrative control, information‑system interoperability and monitoring of public‑funded tourism programmes, warning that the current gaps endanger visitor safety, distort competition and strain the housing market.