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British intelligence and military officials have raised concerns that a Chinese-owned luxury hotel near Limassol in the Greek Cypriot Administration could potentially be used to monitor activity at RAF Akrotiri, one of the U.K.’s key overseas military bases, The Telegraph reported Friday.
The 16-story City of Dreams Mediterranean resort, which opened in 2023, borders the U.K.’s Sovereign Base Areas on two sides and stands significantly taller than surrounding buildings, offering views toward the military installation.
Several intelligence and military sources told The Telegraph that an observer with binoculars and a suitable vantage point could potentially monitor aircraft taking off and landing, as well as movements of troops and officials around the base.
The newspaper stressed that there was no suggestion of wrongdoing by the hotel, its owner or operator.
Access to the hotel’s top floor, which provides one of the clearest views toward the base, is restricted to guests staying in its two presidential suites, according to the report.
Sources said such an observation point could potentially provide information about aircraft sortie rates, movement patterns, operational procedures, perimeter security, patrols and responses to drone threats.
It could also provide visual confirmation of military flights that do not publicly broadcast tracking information.
RAF Akrotiri is a major hub for British military operations in the Middle East and hosts F-35 stealth fighter jets and U.S. U-2 Dragon Lady reconnaissance aircraft.
During the early stages of the Iran war, a drone linked to Tehran struck U-2 operations at Akrotiri as part of Iran’s response to U.S.-Israeli attacks, according to The Telegraph. Sources said such a precise strike would likely have required intelligence gathering.
The report said RAF Akrotiri is expected to deploy counter-surveillance measures in response to the potential risk.
“The security of our people, bases and interests is taken extremely seriously,” a U.K. Defense Ministry spokesperson said.
“RAF Akrotiri is protected by robust, multi-layered security measures, which we keep under constant review. For reasons of operational security we do not comment on the details of these measures.”
City of Dreams Mediterranean is part of Melco Resorts & Entertainment, led by Chinese-Canadian billionaire Lawrence Ho, who sits on the National Committee of the Chinese People’s Political Consultative Conference.
The Telegraph said some officials at RAF Akrotiri feared Chinese authorities could seek to exploit the resort’s location for intelligence gathering.
The hotel strongly rejected the suggestion.
“City of Dreams Mediterranean is a commercial resort dedicated strictly to tourism, leisure and business events,” a spokesperson said.
“Any suggestion that our facilities serve any other purpose is entirely unfounded and is rejected in the strongest terms.”
The hotel said it operates under local licensing, planning and regulatory rules and remains subject to oversight by the relevant authorities. It also said Melco Resorts & Entertainment, a Nasdaq-listed company, follows global standards of corporate governance, transparency and regulatory compliance.
The Telegraph said its own visit to the resort found no signs of suspicious activity.
The report compared the concerns with other cases involving Chinese-linked properties or businesses near military facilities.
In the U.S., lawmakers have raised national security concerns over Chinese entities purchasing land or facilities near military bases, including a recent call for a review of a Chinese solar manufacturer’s purchase of a facility near a base in Ohio.
The Telegraph also cited concerns raised by the Trump administration that Britain’s agreement to transfer the Chagos Islands to Mauritius could allow Chinese fishing vessels to operate near the U.S.-U.K. military base at Diego Garcia.
In 2024, reports also said MI6 and the CIA had raised concerns over Chinese ownership of a hotel in Unterbach, Switzerland, overlooking the main base expected to operate the country’s F-35 fleet. The hotel owners denied any involvement in espionage.
RAF Akrotiri has faced separate spying concerns more recently. The Telegraph reported that Rashad Sultanov, a dual British-Azerbaijani national, was arrested last month on suspicion of spying on the base for the Iranian military and remains in custody awaiting extradition to the U.K.
Sources told the newspaper that having direct visual access to Akrotiri could provide an intelligence advantage, even if only basic operational information were collected.
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