Paphos hotels report weaker profits amid tourism uncertainty

Several property and hotel companies linked to the Constantinou family have reported mixed business performance in 2026, with some Paphos hotels facing weaker occupancy and profitability while related businesses continue selling properties and pursuing new development opportunities. The disclosures, issued by six companies, show contrasting trends across the group’s hotel, property investment, development and rental activities, against a backdrop of economic and geopolitical uncertainty affecting tourism. King’s Head Development Plc, which operates the four-star Pioneer Beach Hotel in Geroskipou, reported the sharpest deterioration among the hotel businesses, with accommodation revenue falling by approximately 15 per cent in 2026. Average occupancy dropped to 66 per cent, compared with 84 per cent in 2025, while the company recorded a first-half net loss of €1.1 million, against a profit of €660,000 during the same period last year. The company said the economic and geopolitical climate, including the continuing war between Russia and Ukraine, the conflict in Gaza and the further escalation of tensions in the Middle East from February 28, 2026, had created additional challenges for the tourism sector. Based on current conditions, it does not expect its full-year financial results to match those of 2025. Paphos Stone C. Estates Plc, which operates the five-star Asimina Suites Hotel in Geroskipou, recorded a more modest increase in accommodation revenue of 2 per cent, while average occupancy improved to 63 per cent, from 59 per cent in 2025. However, its financial performance weakened considerably, with a net loss of €612,512 in the first half of 2026, compared with €64,999 in the corresponding period last year. The company attributed the deterioration partly to uncertainty in the wider economic and geopolitical environment and challenges facing tourism. It described its first-half performance as unsatisfactory and said it was working to limit losses and improve its results, although it expects full-year revenue and financial performance to remain broadly at 2025 levels. Layster Investments Plc, which owns the four-star Athena Royal Beach Hotel in Geroskipou, reported a 1 per cent increase in accommodation revenue in 2026, but average occupancy fell to 75 per cent, from 84 per cent a year earlier. Profitability declined mainly because its cost of sales increased by approximately 7 per cent, largely reflecting higher staff costs and increased taxation. The company expects its revenue for the full year to remain broadly in line with 2025, despite continued uncertainty stemming from the wars in Ukraine and Gaza and the escalation of tensions in the Middle East. All three hotel companies said they were pursuing measures to attract additional visitors, including targeting specialised customer groups, organising themed events and offering comprehensive accommodation packages. Their strategies also focus on increasing room occupancy, maximising revenue, improving profit margins and controlling operating costs. King’s Head said it was reviewing market developments and adjusting its business strategy accordingly, while Paphos Stone and Layster highlighted operational efficiency and cost management as priorities for restoring or strengthening profitability. Away from the hotel sector, Constantinou Bros Properties Plc and Orca Investments Plc reported cumulative property sales since their establishment on December 31, 1999. Constantinou Bros Properties said it had sold 113 properties worth €43.31 million to buyers from Cyprus and abroad. Orca Investments reported 29 property sales worth €10.65 million over the same period. Both companies said they continued seeking buyers from domestic and international markets to promote their property portfolios and advance their business plans. Constantinou Bros Developers Plc reported full occupancy at its Anthousa apartment complex in Paphos during 2026, with the units rented mainly to employees of the Constantinou Bros Hotels group. The company also expanded its property portfolio during the year, acquiring a building in Strovolos and land intended for future development and sale. It is developing apartments on two plots it already owned. One project comprises 14 apartments, of which five have been sold for a combined €1,372,800. The second comprises six apartments, with four already sold for a total of €1.15 million. The company said the investments were intended to broaden its activities and strengthen its position in property development and sales. It plans to continue identifying and assessing investment opportunities involving the acquisition, construction and development of properties for sale, as well as the possible management of additional properties. The companies said their respective strategies were aimed at improving financial performance, expanding their activities and creating long-term value for shareholders.