Eating out has become significantly more expensive in Cyprus over the last three years, with a meal out that cost €100 in 2023 now amounting to an average of €126 – an increase of 26 per cent, date released on Friday showed.
Secretary general of the hospitality venues association (Pasika) Fanos Leventis attributed the increased costs to a rising prices for energy and alcohol.
“The fact that there are increases is indisputable. The fact that the increases are justified is also indisputable,” he said.
According to Leventis, raw materials had increased in price following the pandemic, while geopolitical unrest had contributed to sharp increases in energy prices, adding that the zero VAT measure on some products does not seem to have helped the business sector.
Meanwhile, he pointed out that significant increases were recorded in alcoholic beverages, which he said significantly ups the per capita spending of diners when eating out.
Asked about inflation in services remaining higher despite normalising in the rest of the economy, Leventis said that the very high cost of energy played a role.
“In the actions that a business took in the past, energy was not taken into account in the costing of food and beverages, because it was taken for granted. Today, however, if someone does not take it into account, they will have a very serious deviation,” he said
Leventis, however, acknowledged that some price hikes might not be warranted, noting that at the same time, there were also price reductions and offers.
Balance between spending power and profit needed
He said that entrepreneurs must strike a balance between setting viable prices and taking the purchasing power of the public seriously.
“It’s a difficult equation, I would say, it’s a choice that not many have the luxury of managing in the right way,” he said.
When asked about the average profit margin for food businesses, Leventis said that to be healthy, a business must have a net profit margin of around 10 per cent.
“At this time, several businesses are certainly not reaching that and a significant number of businesses, despite the fact that they have traffic, are struggling for sustainability,” he said.
According to the harmonised index of consumer prices, prices in the catering and accommodation category in 2026 increased by 45.6 per cent compared to 2020, by 26 per cent compared to 2023 and by 13 per cent compared to last year.
Although the operating costs of catering businesses may have increased, increases in beverages and food, as well as electricity, fuel, rent and water were much smaller.
In August 2026, beverage and food prices recorded a 29 per cent increase compared to 2020, but only a 4.7 per cent increase from 2023 to date.
Meanwhile, the category housing, water, electricity, natural gas and other fuels recorded an increase of 36 and 2.7 per cent respectively.
