Cyprus's tourism sector is closing the gap on last year's record performance, though a rocky start to 2026 means the industry will likely finish the year short of 2025's historic total. After arrivals hit 4.53 million in 2025, a renewed bout of instability in the Middle East unsettled travel sentiment early in the year, driving steep declines in March and April. By July, however, the picture had improved considerably, with arrivals down just 1.1% year-on-year.
A rocky spring, a stronger summer
The scale of the turnaround is stark. Arrivals fell by 30.7% in March and 27.6% in April compared with the same months in 2025, according to Eurobank Research calculations based on data from the Cyprus Statistical Service. That decline eased to 1.7% in June and to just 1.1% in July, signalling a marked recovery through the peak summer season.
Despite this improvement, the cumulative shortfall for the year has not been erased. Between January and July, arrivals remained 8.0% lower than the same period in 2025, equivalent to 193,000 fewer visitors.
A mixed picture across source markets
The recovery has not been even across Cyprus's key source markets. Israel provided the strongest support, with arrivals rising by 8.6% and adding 25,000 visitors to the total. The United Kingdom, Cyprus's largest source market, moved in the opposite direction, with arrivals down 11.1%, a drop of 90,000 visitors that accounts for the largest single share of the overall decline. Poland held broadly steady, while Germany, Greece and the Scandinavian countries recorded more modest reductions.
Air connectivity holds steady
The infrastructure underpinning the sector has been largely unaffected by the fluctuation in visitor numbers. Passenger traffic at Cyprus's airports fell by 3.7% between January and July, while commercial flights declined by just 0.9%, indicating that airlines maintained their routes and flight frequency throughout the period. This suggests the adjustment reflects lower load factors and more subdued demand, rather than any structural loss of air connectivity.
What it means for the wider economy
The strength of the peak season matters beyond the hotel sector itself. A stronger high season supports aviation, transport, retail and catering, helping to limit the broader economic impact of regional instability. At the same time, the uneven performance across source markets underlines the strategic importance of diversifying access to continental European markets and strengthening demand outside the peak season.
Outlook for the rest of 2026
Based on the improvement recorded through July, Eurobank Research modelled two scenarios for the remainder of the year. If arrivals between August and December continue running around 1% below 2025 levels, in line with the recent trend, total arrivals for 2026 would reach approximately 4.32 million, a 4.7% decline from 2025's record but still 6.9% higher than 2024. A more conservative scenario, based on the average monthly decline recorded in May and June, assumes an average fall of 3.3% for the remaining months and would bring total arrivals to around 4.27 million, down 5.8% from 2025 but up 5.7% on 2024.
Both scenarios point towards a normalisation from an exceptionally strong peak, rather than a structural deterioration in tourism demand. The outlook remains cautiously positive, though performance will continue to depend on regional stability, travel advisories from key source markets, and the willingness of travellers from those countries to continue their trips.
Source: Eurobank Research, Cyprus Statistical Service
