Cyprus government negotiates wage subsidy scheme for hotel sector

The Cypriot government is finalizing a wage subsidy scheme to support the tourism sector amid fallout from the conflict in the Middle East. President Nikos Christodoulides announced an original proposal to subsidize 30 percent of hotel worker wages for units operating between April 1 and April 30, 2026, as part of a 100 million euro support package. Hotel associations, specifically PASYXE and STEK, have requested an increase in the subsidy level to 50 percent and expressed reservations regarding operating conditions. Meanwhile, trade unions are pressing the Labour Ministry to ensure equal treatment for all employees, warning against discrimination between EU nationals and third-country workers. High-level government officials, including the Finance and Labour Ministers, met with tourism stakeholders to shape a broadly acceptable proposal. While the government aims for an official announcement on April 2, disagreements over coverage and equity remain. The scheme is designed to be voluntary, necessitating a delicate balance to ensure high participation rates among hoteliers. The government is also coordinating a separate support scheme for airlines to maintain tourist connectivity.