Hospitality sector shows resilience with 26pc drop in closures ahead of VAT cut

Hospitality insolvencies in Ireland fell by more than 26pc in the first half of 2026 compared with the same period in 2025, according to PwC figures.

There were 60 such cases recorded, down from 81 the previous year, even as businesses continued to face high energy, transport and wage costs. Overall corporate insolvencies remained steady at 444 for the period. PWC noted that this significant decline indicates a strong trend toward stabilisation across food-service and accommodation businesses.

The reduction came just ahead of a scheduled VAT rate cut to 9% for food-service businesses, boosting confidence across the sector. Improved trading conditions and stabilized consumer spending helped cushion businesses against previous economic pressures.

The vast majority of remaining business failures continue to impact smaller food and beverage operators (cafés and restaurants), while accommodation businesses remain highly resilient. [

PWC noted that, while hospitality closures saw a sharp decline, the overall corporate environment remains a mixed picture.

Despite sector improvements, hospitality still carries an insolvency rate of over 60 per 10,000 businesses, more than double the national average of 27 per 10,000. In contrast to hospitality, retail insolvencies have continued to rise, leading absolute failure numbers across the Irish economy. PwC experts note that despite business resilience, operators continue to battle elevated wage and input costs.