Irish Hotels Face Cost Pressures Despite Stable Booking Outlook for 2026
Killarney, Co. Kerry – The Irish Hotels Federation (IHF) commenced its annual conference today amidst growing concerns over rising business costs, even as forward bookings suggest a stable trading environment for 2026. The conference, held at the Gleneagle Hotel & INEC, brings together over 300 hotel and guesthouse owners and managers from across Ireland to discuss the challenges and opportunities facing the tourism and hospitality sector.
Mounting Costs a “Major Challenge”
A recent IHF survey revealed that 92% of hoteliers are worried about the international economy and potential political instability in key markets. 76% expressed concern about the Irish economy over the next 12 months, citing pressure on consumer finances and international risks.1
IHF President Michael Magner highlighted that Ireland’s cost base, particularly in areas like energy and insurance, is significantly higher than international standards.2 Data from Eurostat indicates that Ireland is the second-most expensive country in the EU for hotels and restaurants, surpassed only by Denmark.2
Cautiously Optimistic Outlook
Despite these headwinds, the industry maintains a cautiously optimistic outlook. Over half (51%) of hoteliers reported a positive outlook for trading conditions in the coming year, while only 13% expressed a negative sentiment.1 Forward bookings suggest business levels will remain stable in 2026.
The IHF noted a robust performance in 2025, with the average national hotel room occupancy reaching 76%, a 1% increase from the previous year. Still, regional disparities were significant, ranging from 70% occupancy in the border region to 83% in Dublin.1
Investment in Upgrades and Sustainability
The survey also found that 75% of hoteliers plan to increase capital investment in the next year. Key areas of investment include guest bedroom refurbishment (61%) and upgrades to restaurants, bars and common areas (47%).1
Sustainability is also a growing priority, with 53% of hotels planning to increase investment in this area in 2026, and a further 32% actively exploring new options. Investment targets include renewable energy and energy efficiency solutions (60%), food waste reduction (33%), and water conservation measures (26%).1
Government Support and Conference Details
The IHF welcomed the government’s decision to restore the 9% VAT rate on hospitality food services from July, which will partially offset rising costs for food-led businesses.1
The conference program includes discussions on engaging Gen Z, navigating the future of hospitality, trends and AI, global developments, and the tourism outlook. Actor and musician Martin Kemp will join broadcaster Claire Brock for a closing conversation.12
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