While the growth in Airbnb accommodations boosted the broader regional economy, it has raised concerns over its impact on the traditional hotel sector, the Paphos Tourism Board (Etap) said on Wednesday.

“Airbnb-type accommodations function as an advantage in the general economy,” Etap Paphos regional manager Nasos Hadjigeorgiou said.

Whilst Hadjigeorgiou said he saw short-term rentals as beneficial to Paphos’ broader economy, he acknowledged their influence on the regional price competition, stressing it was the most significant impact of the current Airbnb boom.

Additionally, he highlighted that Airbnb and traditional hotels were competing in an “uneven playing field”: Whilst hotels were required to follow strict regulations in regards to accessibility, fire protection and health standards, these did not always apply to short-term rentals, creating an imbalance to some extent.

This development, he said, forced hotels to adjust their prices, eventually risking lower profit margins and an overall decrease in occupancy rates.

At the same time, Hadjigeorgiou said that short-term rentals attracted younger travellers who, although they may not be able to afford hotel accommodation, tended to spend more money in local shops, restaurants, cafés, markets and other services – stimulating the local economy.

Hadjigeorgiou added that short-term-rentals would also open new opportunities for residents to generate income by renting out properties or offering tourism-related services, supporting the overall economic growth in the region.

And while Hadjigeorgiou sees potential in the model, scepticism about Airbnb is far from being a uniquely Cypriot concern. In recent years criticism of short-term-rentals has surged, with countries like Greece and Spain firmly in the spotlight as popular Airbnb hotspots.

In 2022, a total of 3.796 million overnight stays in Cyprus were booked through platforms like Airbnb, Booking, Expedia and TripAdvisor. Experts estimate there are now more than 14,000 short-term rental properties on the market, with around 11,000 of them having applied for official registration as of 2024 – and with thousands more suspected to operate illegally.

The average listing is booked for 230 nights a year, bringing individual hosts an annual income of around € 20,000.

While the situation in Cyprus hasn’t yet reached the scale seen elsewhere, affordable housing is becoming increasingly difficult to find, especially in Limassol, the epicentre of thelocal housing crisis.

And Cyprus is far from an outlier. Across the Mediterranean, short-term rentals have become a flashpoint in the broader debate over housing, tourism and economic inequality.

In heavily touristed cities like Athens and Barcelona, short-term-rentals have boosted living costs to an extend that residents can no longer afford to live in their own neighbourhoods with increased tensions between locals and tourists.

While in Barcelona, residents are taking to the streets, Athenian city walls are covered in graffiti reading “Tourists go home” and “Stop Airbnb” covers city walls, as homelessness grows and entire neighbourhoods slip out of reach for locals.

Although Cyprus clearly hasn’t reached that boiling point yet, scepticism seems reasonable.