President blocks ‘two-tier’ hotel licensing regime

President Nikos Christodoulides has referred back to parliament the law allowing hotels and tourist accommodation to operate for up to five years under a special permit, citing violations of the principles of separation of powers, legality and equality.

According to Stockwatch, which cited a letter dated February 9, the president asked the House of Representatives to reconsider the Regulation of the Establishment and Operation of Hotels and Tourist Accommodations (Amendment) Law of 2026.

The law was originally approved on January 22 with 25 votes in favour and 15 abstentions following a proposal by Disy MP Kyriacos Hadjiyiannis.

The referral, he clarifies, does not concern a simple extension of deadlines but the creation of a new operating regime based on a “special licence”.

The amendment sought to address long-standing licensing delays, allowing establishments unable to obtain full permits to continue operating while securing required certificates.

It provides a one-year extension of the licensing deadline to November 30, 2026 and allows operation for three years with a possible two-year renewal.

According to the president, the framework creates unequal treatment between businesses that already comply with existing legislation and those that do not, noting it “violates article 28 of the Constitution, which prohibits unequal treatment between equal and similar cases”.

He also raises legality concerns because the arrangement tolerates continued non-compliance with planning and licensing requirements and introduces exceptions to urban planning rules.

He further points to the creation of a two-tier regime, since some establishments could operate without safety and health certificates that licensed operators must already hold.

At the same time, the obligation imposed on the Deputy Ministry of Tourism to accept incomplete applications and assist in their completion conflicts with the principle that legislation must set clear obligations.

The president also questions proportionality, saying stricter rules would apply to licensed businesses and more flexible ones to non-licensed operators in identical circumstances, while the law allows certain establishments to continue operating even if they had not submitted required documentation by previous deadlines.

The referral states the law interferes with executive authority by transferring administrative competence from the Council of Ministers and competent authorities to the legislature, contrary to the constitutional separation of powers. Established case law, he notes, confirms legislation should set general rules rather than regulate administrative execution.

He also raises budgetary concerns, arguing the provisions increase public expenditure because the new regime requires a special operating permit, a special fire safety certificate and certification of compliance with collective agreements.

These procedures require new registers, inspections, re-examination of data and additional administrative work by the Deputy Ministry of Tourism, the labour ministry and the fire service.

The amendment also extends the fire service examination period for fire protection studies from 30 days to six months and provides that the special fire certificate would be valid for three years and renewable once after inspection, while it may be revoked if active or passive fire protection measures are not respected.

Supporters of the proposal had argued that only a limited number of hotels have been able to comply fully with licensing provisions and that failure to adopt the measure could lead to the suspension of many operations with economic consequences.

Under the Constitution, the House must decide on the referral within fifteen days, with the matter expected to be examined first by the parliamentary tourism committee before returning to the plenary.