The Labour Ministry on Friday sent hotel associations and trade unions the government’s special support scheme for employment in the hotel sector, introduced in response to the sudden drop in tourist activity caused by geopolitical developments in the Middle East.
Under the scheme, any hotel or tourist accommodation engaged in economic activity and operating during 2025 may participate, provided it remains open from 1 April to 30 April 2026. Hotels may open as late as 20 April and still qualify.
Eligible businesses include those expecting or recording a reduction in activity of more than 40 per cent for April 2026 compared to April 2025, or those with occupancy rates below 60 per cent.
A key condition for participation is that businesses must not dismiss any employees up to 31 May 2026, unless termination without notice is justified under the Termination of Employment Law.
Hotels that enter the scheme will receive a special allowance covering up to 80 per cent of their employees for the month of April. The remaining 20 per cent includes shareholder‑directors, partners holding more than 20 per cent of shares, general managers and senior executives.
The allowance is calculated at 30 per cent of the monthly salary declared in the ERGANI information system at the time the application is submitted. The maximum monthly payment may not exceed €1,324.
Businesses can participate only if they are active and submit an application through ERGANI accompanied by a report from an approved accountant. When the scheme ends, authorities will check the actual salaries on which social insurance contributions were paid against those declared in ERGANI.
First reaction from hoteliers
Hotel operators welcomed the announcement but said they expected stronger support.
“It is a form of support for employees, but the sector expected something more,” the director general of the Cyprus Hotel Association, Christos Angelides, told Politis. “We hope things improve so we can return to normal operations for the benefit of the industry, the employees and the Cypriot economy. We wish circumstances were different so that no one needed support at all.”
The president of the board of the Association of Cyprus Tourist Enterprises, Akis Vavlitis, expressed similar concerns, saying the industry had expected a different scheme after discussions with officials. “We must consider what the tourism industry contributes to the economy and the fact that tourism revenue is spread across the entire economy. Any negative impact affects almost all economic activity,” he said.
Vavlitis added that the hope now is for an end to the war in the Middle East and a return to normality worldwide. “Otherwise, negative effects are expected in the coming months,” he warned.