For Trea Heapes of Pure Space, an eco-resort of cabins and bell tents nestled in woodlands on the Loop Head Peninsula in Co Clare, the views this summer were simply spectacular.
“We were seeing literally hundreds of basking sharks breach each day. I was sending all my guests out to make sure not to miss them, because they won’t see anything like it anywhere else in the world,” says Heapes.
The Shannon estuary is also famous for its dolphins but while her guests love nothing more than being off the beaten track, enjoying the sea, saunas and cetaceans, Heapes is keeping a weather eye on something much less inspiring – her bank account.
“I’m not joking when I say I check it every day, to see what’s there and what bills are owed,” she says.
RM Block
As ever with a tourism business, hers is highly seasonal. She has to make enough over the summer to see the business through the leaner months of winter.
This summer was something of a mixed bag. “July was a funny month. In the second two weeks we had availability we never would previously have had, and it was the same for other providers in the area. Then in August people seemed to realise there was only a few weeks of summer left and started booking furiously – particularly Germans,” she says.
For Tina Darrer, owner of Dooley’s Hotel in Waterford, it has also been something of a curate’s egg. Occupancy rates were good at the popular family hotel, but not so good that she could put up her rates to cover the increased cost of doing business.
“Summer has been okay but I’m still holding my breath because food and beverage was down. People were ordering their main course but often skipping dessert.”
Of concern to her now is VAT and, as ever, having to contract with tour companies for next year, without knowing exactly what rate to apply.
While the Government has committed to restoring the reduced 9 per cent rate for food service in January, she is worried about rumours that tour operators booking dinner, bed and breakfast packages might still be levied at the higher, 13.5 per cent, rate for the food element.
“If that were to happen, they would go ballistic,” says Darrer, who employs almost 100 full- and part-time workers in high season, making her a key contributor to the local economy.
While new hospitality businesses are still setting up, and employment in the sector increased in the first quarter of 2025, the statistics mask the very real problems being experienced by many businesses in the sector.
Indeed, the Irish Tourism Industry Confederation’s (ITIC) pre-budget 2026 submission puts Irish tourism “at a tipping point”.
CSO figures for the first half of the year – so worrying they were initially queried – showed revenues down 17 per cent and volume down 13 per cent.
At the same time margins are being squeezed, with energy and labour cost rises a particular burden. Energy costs in the State are now 17 per cent above the EU average. The State also has the second-highest minimum wage rate.
With 200 restaurant closures in the first five months of the year alone, and the continuing cost-of-living pressures being felt by consumers, uncertainty is the watchword, not least because most restaurants are already operating on razor-thin margins, with little fat to trim.
Attractions look to boost appeal
Members of the Association of Visitor Experiences and Attractions include everything from the Guinness Storehouse to Fanad Lighthouse.
With an average ticket price of just €11, “it’s a very important bellwether because it shows how people are going out and spending their leisure time and, if they’re leaving Dublin, where it is they are going to”, says its chief executive, Catherine Flanagan.
This summer member feedback suggests that while the main tourism hotspots are “holding their own”, those slightly off the beaten path were seeing fewer visitors, she says.
Given that summer is the season such businesses rely on for the revenues to keep them going through winter, that’s a concern. While there is still lots of interest from the culturally curious, “people are mindful of how they’re spending their money”, says Flanagan.
As concerns grow around the sector’s reliance on the US, there are alternative opportunities to be explored, she suggests, particularly markets such as Germany, whose visitors here would have traditionally come for a second holiday rather than for their primary break. With a little support, Ireland could become their primary destination, says Flanagan.
Indeed, as traditional mainland European holiday destinations increasingly endure heatwaves, the appeal of “coolcation” destinations such as Ireland may also rise, she adds.
Promoting tourism in the shoulder seasons has also long been on the hospitality sector’s menu, with conference visits another area of opportunity for the winter months. However, removing the passenger cap at Dublin Airport is vital to achieving that, she points out.
Part of the problem the sector faces is that it is somewhat taken for granted, when in fact “it needs to be nurtured and looked after”, she adds.
The fact that tourism is back under the aegis of the Department of Enterprise and Employment is a good augur. It was previously housed under culture and art, which seems odd, given its economic importance. The sector’s hope now is that Fáilte Ireland and Tourism Ireland will have parity with agencies such as Enterprise Ireland and IDA Ireland, as drivers of economic growth.
“After all, tourism locates in areas where, in many cases, it’s the only economic game in town,” says Flanagan.
Restaurants back in the Fáilte fold
For restaurateurs “the consensus is that the season has been flat, with spend down”, says Restaurants Association of Ireland chief executive Adrian Cummins, who welcomes the prospect of an all-island food tourism strategy, as well as the decision by Minister for Enterprise, Tourism and Employment Peter Burke to put restaurants back under the remit of Fáilte Ireland after a five-year absence.
“We’re very happy the new Minister is striking while the iron is hot and undoing all the damage that was done in the last regime where we were divided. It was shocking to have the industry divided but now we’re all treated equally, which is the right thing to do,” says Cummins.
It is, he says, a smart and timely move but one that needs to be backed up with funding if the current restaurant closure rate, which he puts at 50 to 60 a month, is to be staunched.
The hospitality sector also stands to benefit from the rowing back in the number of hotel bedrooms taken out of commission to facilitate asylum seekers.
At one point more than 20 per cent of hotel rooms were contracted by the State, a figure now down to seven per cent. Anything that takes tourists out of a location impacts downstream operators, from cafes to visitor attractions.
The fact that 7,000 hotel bedrooms are under construction, 5,000 of them in Dublin, is also helping to boost capacity.
As things stand, for hoteliers the season so far has pretty much lived up to expectations, says Paul Gallagher, chief executive of the Irish Hotels Federation. While room rates are a little softer, occupancy has been strong, allowing hotels to absorb some of the cost increases they face.
And while hoteliers have concerns about the impact of US tariffs and the weakness of the dollar, they also see opportunities to attract more visitors from countries such as Canada, he says.
More concerning right now are ongoing increases in input costs, including ingredients, which make the recent announcement of a 10 per cent hike in water costs particularly hard to swallow.
Then there are all the new administrative costs of managing everything from gender pay gap reporting to pay transparency regulations, new rules for which must be adopted by next year.
In the meantime, what would really help hospitality is to not alone restore the reduced VAT rate but to fix it for several years, taking it out of budgetary consideration once and for all, says Gallagher. As things stand, it has become such a political football that it’s hard for hotels to sign contract rates with tour companies for next year, knowing that the goalposts might be moved, he contends. That’s not a “reasonable position” for hotels to be in, he says.
