Budget 2026: Hospitality, tourism & leisure
As Budget 2026 approaches, Ireland’s tourism and hospitality sector faces a mixed outlook: strong investment activity but mounting operational and cost pressures.
Over €340 million was invested in hotels in Q1 2025, yet according to the CSO, foreign visitor numbers fell by 6.5% up to July 2025 compared to July 2024. Overseas spend declined 15% in H1 2025 year on year, and while some months like June showed a smaller decline, the overall trend across H1 indicates a drop in spending, driven by reduced visitor numbers and shorter stays.
Other items like food inflation and the new auto-enrolment pension scheme (from January 2026) will add further cost pressures. Many smaller F&B operators are now at or below breakeven, with the vast majority expecting a VAT cut on food service to 9%. The recent recommendation by the living wage commission to increase the minimum wage by 5% would see the current rate increase to approximately €14.17 if and when implemented.
Crowe is calling for balanced budgetary measures: a review of the VAT rate on food services, targeted supports for regional tourism, removal of the Dublin Airport passenger cap, a national hotel retrofitting scheme, and government assistance with staff accommodation.
Domestic tourism remains strong, and air capacity into Ireland is projected to grow 2%, but weaker demand from Great Britain and Europe has increased reliance on North American visitors. This heightens exposure to risks from exchange rates and tariffs that could hit discretionary spending.
Echoing the Irish Hotels Federation and the Irish Tourist Industry Confederation, we believe the sector is at a “tipping point”. Budget 2026 must prioritise competitiveness, connectivity and investment to protect Ireland’s largest indigenous industry and its role in regional development.
As Budget 2026 deliberations intensify, the focus must be on safeguarding jobs, sustaining local economies, and supporting long-term growth across Ireland's tourism and hospitality sector. Crowe’s Hospitality, Tourism & Leisure division will be monitoring developments closely.
Our Budget 2026 webinar, featuring leading economic analyst and commentator Jim Power along with a panel of Crowe Ireland experts moderated by tax partner Claire Davey, is now available to view on demand. Click here to to find out more about what Budget 2026 means for business owners across all sectors.
