Prospects for the Cypriot tourism sector remain cautiously positive, according to a new analysis by Eurobank Research, although performance continues to depend heavily on regional stability, travel advisories issued by key source markets and travellers' willingness to continue holidaying abroad.
Recovery after a difficult start
The report notes that Cyprus entered 2026 following a record year, with 4.53 million tourist arrivals recorded in 2025.
However, renewed instability in the Middle East weighed on travel sentiment and led to a sharp decline in arrivals during the spring.
By July, the situation had improved considerably:
- Arrivals in July were only 1.1% lower than in July 2025.
- June arrivals were down 1.7% year-on-year.
- March recorded a decline of 30.7%.
- April recorded a decline of 27.6%.
While the recovery has narrowed the gap with 2025 performance, it has not fully erased it.
During the January-July period, arrivals remained 8% lower than a year earlier, representing approximately 193,000 fewer visitors.
Israel offsets part of UK decline
Israel provided the strongest support to the market, with arrivals increasing by 8.6%, adding roughly 25,000 visitors.
By contrast, the United Kingdom, Cyprus's largest tourism market, recorded an 11.1% decline, accounting for around 90,000 of the overall drop in arrivals.
Meanwhile:
- Arrivals from Poland remained broadly stable.
- Germany recorded moderate declines.
- Greece recorded moderate declines.
- Scandinavian countries also posted modest decreases.
According to Eurobank Research, the divergence highlights the importance of further expanding access to mainland European markets and strengthening demand outside the peak summer season.
Tourism infrastructure largely unaffected
The report notes that the infrastructure supporting tourism remained largely intact despite weaker demand.
Passenger traffic at Cyprus airports declined by 3.7% during the first seven months of the year, while commercial flights fell by only 0.9%.
This suggests airlines broadly maintained routes and flight frequencies, with the adjustment reflecting lower aircraft occupancy and weaker demand rather than a structural loss of air connectivity.
Eurobank Research argues that the recovery matters beyond the hotel sector because a stronger summer season supports:
- Airlines
- Transport services
- Retail trade
- Restaurants and catering businesses
This helps contain the wider economic effects of regional instability.
Forecast: Around 4.3 million arrivals
Based on the improvement recorded up to July, Eurobank Research estimates that if arrivals between August and December remain roughly 1% below 2025 levels, total arrivals for 2026 would reach approximately 4.32 million.
That would represent:
- A 4.7% decline from the record level achieved in 2025.
- A 6.9% increase compared with 2024.
Under a more conservative scenario, assuming arrivals for the remainder of the year decline by 3.3%, in line with the average monthly decrease recorded in May and June, annual arrivals would total about 4.27 million.
That outcome would be:
- 5.8% lower than 2025.
- 5.7% higher than 2024.
According to the report, both scenarios point to a normalisation from an exceptionally strong peak rather than a structural deterioration in tourism demand.
