The Restaurants Association of Ireland claims some businesses are losing up to €3,500 per day as a result of water restrictions in Dublin.
The group is calling for compensation following confirmation that water shortages have been extended until at least next Thursday.
Many restaurants and hotels have been forced to make contingency plans to see them through the weekend period.
Chief Executive of the Restaurants Association Adrian Cummins, said a daily rate should be introduced to support business owners.
"I think [that's] the most fair and equitable way of doing this … we do pay the highest water chares in Europe, so it's important that businesses are supported in some sort of compensation package," he said.
"Many business are now having to buy in water to support their business."