Hoteliers from across the country recently met with TDs and Senators to discuss the key challenges facing Irish tourism and the necessary measures the Irish Hotels Federation is calling for to ensure the successful long-term development of Ireland’s largest indigenous industry, supporting over 270,000 livelihoods. Pictured (l-r): Matt O’Connor, Vice President IHF; Minister Robert Troy and Sean O’Driscoll, iNua Collection. Photo: Maxwell Photography

‘Exceptionally high’ costs hurting hotels and tourism sector, O’Connor tells TDs

Eilís Ryan

Published: Mon 21 Jul 2025, 1:10 PM

Some 6,400 are employed in tourism and hospitality in Longford and Westmeath, Mullingar hotelier, Matt Connor, vice-president of the Irish Hotels Federation told local TDs and senators during a recent meeting of hoteliers and politicians on the key challenges facing Irish tourism.

Describing it as Ireland’s largest indigenous industry, supporting over 270,000 livelihoods across the country, the Irish Hotels Federation has said it is concerned over the “exceptionally high” operating costs that tourism and hospitality businesses are grappling with, a situation that is particularly challenging for regional businesses that are heavily reliant on food services.

“Tourism businesses are struggling to deal with ever-increasing operating costs and tighter margins,” Mr O’Connor said.

“It is now essential that the Government tackles this head on and delivers targeted measures to enhance cost competitiveness and support business viability.”

He said Irish tourism is experiencing difficult headwinds on a number of fronts, including reduced tourism expenditure, economic challenges across our key source markets and increased political uncertainty internationally – all of which pose a serious risk to the industry, and pointed to recent research by Fáilte Ireland showing that 51% of tourism businesses have seen a decrease in revenues to date in 2025 compared with last year. Mr O’Connor explained that the results indicate that overseas visitor spend, which typically accounts for 70% of tourism revenue, is a significant concern. This is particularly challenging for Food & Drink businesses, with 75% reporting a drop in overseas revenue so far this year.

Outlining the key policy priorities for the industry, Mr. O’Connor stressed the importance of decisive action in the upcoming Budget, including a permanent restoration of the 9% VAT rate on hospitality food services; a meaningful reduction in Employers’ PRSI and measures to tackle excessive business costs.

“Having these measures in place would go a long way towards ensuring the long-term success of Ireland’s tourism and hospitality industry,” Mr O’Connor concluded.