Irish hotel occupancy rose to 76% last year

Irish Hotels Federation says the sector is cautiously optimistic for 2026, partly boosted by the return of the 9% Vat rate in July

Planned investment projects include bedroom refurbishment (61% of hotels) and upgrades to restaurants, bars and common areas (47% of hotels).

Ireland’s hotel sector said it is cautiously optimistic for 2026, after the national average room-occupancy rate rose slightly to 76% last year.

The Irish Hotels Federation (IHF), which meets in Killarney today for its annual conference, says that business costs and global uncertainty are the primary concerns facing hoteliers.

Industry research found that 92% of Irish hoteliers are worried about the global economy and the potential impact of political uncertainty in key markets. 

Closer to home, 76% are concerned about the Irish economy, as consumer finances remain under pressure and international developments pose potential risks.

Following a decision in Budget 2026, the 9% rate of Vat on hospitality food services will be restored from July. 

A slim majority (51%) of hoteliers report a positive outlook for trading conditions over the next 12 months, while 36% report a neutral outlook and 13% are negative.

While most regions saw an increase in occupancy levels, significant regional disparity persists, ranging from 70% occupancy in the border region to 83% in Dublin.

IHF president Michael Magner said the sector was optimistic, despite significant headwinds. “Chief among them is relentless increases in the cost of doing business, which is already exceptionally high by international standards,” he said.

Thankfully, the Government’s decision to restore the 9% rate of Vat on hospitality food services from July will partially offset these increases for food-led businesses operating on some of the tightest margins of any sector.

Following a period of already significant capital investment in their properties during the last four years, 75% of hoteliers plan to further increase investment over the next 12 months. Planned investment projects include bedroom refurbishment (61% of hotels) and upgrades to restaurants, bars, and common areas (47% of hotels).

Mr Magner notes that continued investment in product development remains a priority for Irish hotels. 

“A focus on value-enhancing investment is essential for the future growth of our sector and tourism industry. 

"Hotels are examining all aspects of their operations to elevate their product, meet changing visitor preferences and achieve their sustainability goals. This ensures Irish tourism is positioned to deliver long-term growth as Ireland’s largest indigenous industry, supporting over 270,000 livelihoods.”