I'm not long back from living in Cyprus and can confirm that the cost of living over there has rocketed. Many OAPs who sold up in UK to move over here are now going back because their pensions no longer keep them.
Eating out is very expensive, unless you chose what we called the 'living room cafes' in which you can get a basic meat meze for about ?10 a head. These places aren't in the tourist areas though, so you would have to travel.
We found it cheaper to book into hotels for the weekend and spend 48 hrs on the AI than to eat out! Used to be able to do that thru the Thomson Website for around £30 a day!
Car hire is quite expensive, about £50 a day and Cypriot drivers are terrifying!!
Cyprus Airlines is fab, better than any of the others we tried, but doesnt do cheap deals. Easy Jet is prob the cheapest, but again, not good timings.
Louis King Jason Apartments in Paphos is cheap and clean for SC (about £15 per night).
If you can afford it, then AI really is the way to go. Louis Phaethon Beach is cheap and clean for AI (and has some family rooms). St Georges (Paphos) is lovely, Crown Resorts Horizon (Paphos) very good and St Raphaels (Limassol) outstanding but all costly.
Oh and the heat is unbelieveable in the summer Jul/Aug - but you'll survive with UV suits, hats and plenty of sun screen if all you are doing is hotel or beach based - however dont expect to do trips etc, depending on the DC they will be pretty awful (we used to just keep DD inside between 11am and 3pm)
HTH