Many tourist businesses expect revenues to fall this year after B&Bs and restaurants endured a tough summer, said State agency Fáilte Ireland.
The organisation, responsible for promoting the Republic as a holiday destination, said on Thursday that turnover at 63 per cent of tourism firms either fell or levelled off this summer.
Around 44 per cent of hospitality businesses now expect turnover for 2025 to be down on last year, according to Fáilte Ireland’s September Tourism Barometer.
“Operators do not hold high hopes for the remainder of the year, including in sectors which performed relatively well this summer,” says the report.
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The news comes just weeks after Minister for Finance Paschal Donohoe pledged to cut VAT for the industry to 9 per cent from 13.5 per cent from July of next year.
The move, announced in Budget 2026 at the start of this month, followed sustained lobbying by hospitality businesses, which warned that rising costs threatened to close many firms.
Central Statistics Office (CSO) figures showed tourism numbers on the slide in early summer, although the latest release showed a 1 per cent increase to 772,800 incoming visitors in August.
Fáilte Ireland’s barometer shows that numbers from North America, a key market for the Republic, were down this summer, although the State agency says the “decline could have been more severe”.
[ CSO figures for May show 10% drop in tourist numbersOpens in new window ]
Two-thirds of the businesses that responded to the survey said North American numbers were either down or stable compared to last year, while 34 per cent said they were up, the document shows.
North American tourists stay longer and spend more than their European counterparts.
They spend an average of €1,526 each on their holidays here, against the €509 that British visitors part with when they stay in the Republic, the Irish Tourism Industry Confederation (ITIC) calculated earlier this year.
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Most restaurants and B&Bs reported that business was down this summer, says the Fáilte Ireland report. Hotels and attractions saw business increase.
More than eight out of 10 tourist businesses said rising energy, wage and other costs continued to bite this year.
Among tourist businesses that do not provide accommodation, the cost of staying in the Republic was the problem they highlighted most.
Many pointed to “the public perception of Ireland lacking in value-for-money accommodation as a barrier for businesses”, Fáilte Ireland acknowledges.
The agency says its latest findings indicate that while challenges remain, there was some recovery this summer.
