- The Irish hospitality sector has outlined its wish list including
- The return to the 9pc VAT rate on food and catering services took effect from 1 July 2026 at an estimated cost of €232 million in that year
- The Irish Hotels Federation sought an additional €90 million for tourism marketing
- A report identified a shortfall of between 10,000 and 15,000 hotel bedrooms nationwide
- Hospitality insolvencies fell by 23pc in the first nine months of 2026
The Irish hospitality and tourism sector has outlined a wish list in pre-Budget submission documents rooted in the sector’s contribution of billions of euro to the national economy and its role in sustaining employment across every county.
Industry bodies including the Irish Hotels Federation and the Irish Tourism Industry Confederation prepared detailed submissions that sought to protect viability after years of cost pressures while positioning the sector for sustained growth in visitor numbers and spend. The analytical case rested on evidence of rising input costs, capacity shortfalls and the need for targeted fiscal measures that would deliver measurable returns through higher tax receipts from increased activity.
Last year operators argued for a return to the 9pc rate from the prevailing 13.5pc on the grounds that the higher charge eroded margins in an industry already contending with elevated energy, insurance and labour expenses.
This year data presented to government showed that electricity costs had climbed by more than 60pc over a three year period while insurance premiums rose by more than a quarter.
Labour costs increased in parallel with successive minimum wage adjustments and employer social insurance contributions. Restoring the lower rate was presented as essential to keep menu prices competitive for both domestic diners and international visitors and thereby protect the estimated 150,000 jobs supported by food led businesses. The measure was ultimately confirmed in the budget and took effect from 1 July 2026 at an estimated cost to the exchequer of €232 million in that year rising to €681 million in a full year.
Alongside the value added tax request the sector pressed for a substantial increase in public funding for tourism marketing and product development. The Irish Hotels Federation sought an additional €90 million so that the overall tourism allocation would reach €340 million. This investment was justified by the proven return of approximately €25 in economic activity for every euro spent on overseas promotion.
Funds would support the reopening of international offices, the securing of new air routes and campaigns aimed at diversifying away from heavy reliance on the North American market which had shown signs of softening. Hotel capacity itself featured prominently in the analysis.
A report prepared for the Irish Tourism Industry Confederation identified a shortfall of between 10,000 and 15,000 bedrooms nationwide with the deficit most acute outside Dublin.
Data showing a 23pc fall in hospitality insolvencies in the first nine months of 2026 provided early evidence that the value added tax change had begun to stabilise trading conditions.
