Cyprus’ tourism sector is showing signs of stabilisation after the US and the United Kingdom revised their travel advisories for the island, in a move seen as helping restore confidence in the country’s image as a safe destination.

Deputy Tourism Minister Costas Koumis described the revision as a positive development, saying Cyprus tourism is now moving towards a period of normalisation after months of disruption linked to regional tensions.

Speaking to CyBC’s, Koumis said “the British market has long been Cyprus’ largest source of tourists, even though arrivals from the UK recorded a significant decline in the first four months of the year because of developments in Akrotiri.”

He added that May ended with only a very small decrease in passenger traffic, expressing confidence that the sector is now on a more stable path.

The revision of the travel advisories was also welcomed by tourism stakeholders, although industry figures remain cautious over how quickly the change will feed through into bookings.

The Association of Cyprus Tourism Enterprises (Stek) president Akis Vavlitis said there was “moderate optimism” that conditions would improve following the US and UK decision, adding that the real impact would become clear over the next two to three weeks.

Speaking to the Cyprus News Agency (CNA), Vavlitis said the development had pleased the tourism industry, as the change carries both practical and psychological weight.

“There is a moderate optimism that things will improve due to the US and UK decision, but it will be seen in the next two to three weeks how positively it will affect,” he said.

He added that if bookings increase over the coming weeks, it would suggest the travel advice had been one of the factors holding demand back.

Beyond Britain’s importance as Cyprus’ largest tourist market, Vavlitis said the decision also sends a broader message to European and Middle Eastern markets, where confidence had been affected by the earlier warnings.

However, he said the incident had once again shown the risks of Cyprus relying too heavily on one market.

“We have been saying for years that we are wrongly relying on only one market,” he said, adding that Cyprus must find ways to diversify its tourism base.

He noted that Britain remains far ahead of Cyprus’ second-largest market, Israel, while the Russian market, which had previously acted as a counterweight, has been lost since the war in Ukraine.

“In recent years, normality is the exception, that is, crises come more often and are unpredictable and larger,” he said.

Vavlitis said that, based on a study by a major international firm, he had already suggested to the authorities and the President that India could become Cyprus’ next major tourism market.

“It is not an easy undertaking as you have to find the product that the Indian tourist wants and agreements have to be made,” he said, adding that Cyprus must find a way not to depend on a single source market.

Referring to the start of the year, Vavlitis said January and February had begun strongly, with bookings for the full tourist season running above last year’s levels.

However, he said developments linked to the war in Iran overturned earlier forecasts and disrupted reservations.

“Today the situation with reservations has improved, meaning more reservations are coming in than those that were coming in a month ago,” he said.

Still, he warned that it remains too early to say how the year will close or what losses may be recorded in revenue for hotels and the wider economy.

He added that several discounts had already been offered to tour operators, affecting the profitability of hotel businesses.

The Cyprus Hoteliers Association (Pasyxe) also described the revision of the US and UK travel advisories as a positive development, saying it reflects the coordinated efforts of the government and tourism stakeholders.

Pasyxe said the updated guidance restores Cyprus to the list of safe travel destinations, with the US returning the island to Level 1, advising only usual precautions, while the UK lowered the risk level and removed any recommendation against travel.

“This is a significant development, which sends positive messages to the markets, creating more favourable conditions for the rest of the tourist season,” Pasyxe said.

The association added that the change also removes burdens related to insurance coverage, as well as warning notes that had appeared on online booking platforms around the world.

Pasyxe said the coordinated efforts of the government during the crisis, both through the Presidency and the Foreign Ministry, had helped restore Cyprus’ international image.

“It is worth noting that Pasyxe took action from the very beginning, making successive contacts with the embassies in the US and the United Kingdom, substantially contributing to the efforts to revise the travel guidelines,” it added.

The association said the revision of travel recommendations is a “particularly positive development” that strengthens trust, the sense of security and the competitiveness of Cyprus as a tourist destination.

At the same time, the pressure on hotels has not eased. Vavlitis said businesses continue to face higher costs because of energy prices, supply chain pressures and wage increases under collective agreements that came into effect in April.

“To its credit, the entire hotel industry has given the increases without even thinking of asking the unions or the state to postpone the increases,” he said.

He added that Stek had been in contact with commercial banks at the highest level, as well as with the president of the Association of Cyprus Banks, and had received assurances of support.

“For all businesses that have been consistent with the banks to date, we will have the support of the major banks in whatever the industry needs,” he said.

Vavlitis said this gives the sector some confidence, especially after state support was offered in April, while the industry is waiting to see what will happen for May and June.

Although costs have risen, he said hotels have already offered price reductions. However, he warned that if fear is the reason behind weaker bookings, lower prices will not necessarily solve the problem.

He said he had conveyed this position to the President and the relevant ministers.

Vavlitis also said the wider economic pressure in key source markets, including Germany and Britain, is adding to the uncertainty, with inflation rising and further interest rate increases expected.

However, he said travel has become less of a luxury and more of a way of life in recent years, helping tourism recover relatively quickly from crises.

On staffing, Vavlitis said several hotels had not brought in additional workers from abroad, despite receiving approval from the Labour Ministry, while interest from foreign workers in coming to Cyprus remains.