Recently, the Parliamentary Committee on Energy delved into the licensing challenges faced by hostel-type accommodations in Cyprus. Elias Iliadis, representing the Hostel Owners Association, called for the intervention of the Parliament to resolve these issues.

As Brief reports, Iliadis highlighted the primary problem: hostels, not being located in tourist zones, face difficulties with the Town Planning Department. He emphasized, "Our aim is to change the use classification by the Town Planning Department and move forward to the next steps," warning that "without licenses and prospects for licensing, hostels may cease their licensing efforts as it seems a dead end." He added, "Our problem lies strictly with the zoning regulations, as the Planning Department equates us with the closest category, which is hotels."

A Town Planning Department official expressed readiness to resolve the issue, stating, "We will as soon as possible develop a policy for hostels, differentiating them from hotel units, hoping this regulation will enable their licensing." The official also mentioned informing the Ministry of Interior to issue a directive clarifying this matter soon.

When asked about the timeline, the Planning Department official estimated the process could take 1 to 1.5 months. Kyriakos Hadjiyiannis, Chairman of the Parliamentary Committee on Energy, noted that the Committee would await the decree and consider proposing a law based on its provisions to enable hostels to operate by summer.

In a memorandum submitted to the Committee, the Cyprus Hostel Association referred to the significant difficulties hostels face in obtaining licenses under the legislation passed in 2022. The Association points out that hostels do not align with hotels and their usage is more akin to residential rather than touristic. Therefore, the conditions and processes imposed on them should not be the same as those for hotels and tourist accommodations.

Despite the new law, spatial planning policies have not changed, as the Local Plans remain unmodified without explicit provisions for zones where hostels can operate. This results in Planning Authorities allowing hostels only in areas designated for hotels and tourist accommodations. The Association mentioned a specific case where an application to convert apartments into a hostel was rejected because hostels are only permitted in tourist development zones and not residential areas, like self-catering accommodations and other housing facilities.

Similarly, the Association has learned that municipal authorities may require hostels to purchase numerous parking spaces and pay high municipal fees, with unclear conditions for accommodating individuals with disabilities.

The Association warns that existing hostels might not be able to legalize their operation under the 2022 law, either due to the inability to obtain a change of use permit or because the costs for parking spaces and municipal fees are disproportionately high compared to their charges and revenues. Consequently, the law remains effectively inactive, and existing hostels might either have to cease operations or continue without the required licenses. The Association urges the Energy Committee to find solutions to these problems.

It is noted that, according to the legislation, the 25 hostels currently operating must secure operating licenses under the new legal framework within three years.