A leading Donegal hotelier has urged the Government to tackle the issue of rising costs within the hotel sector head-on.
Carolynne Murray, Vice Chair of the Donegal Branch of the Irish Hotels Federation, said the Government needs to tackle what she described as “unsustainable increases” in the cost of doing business.
Ms Murray, general manager and director of the Shandon Hotel, met with TDs and senators this week to discuss the issues facing hoteliers across the country.
She called for immediate action to ensure the successful long-term development of Ireland’s largest indigenous industry, supporting over 270,000 livelihoods – including 8,000 in Donegal.
In the run up to Budget 2026, a key concern for hotels and guesthouses across Donegal is the exceptionally high operating costs that tourism and hospitality businesses are grappling with, a situation that is particularly challenging for regional businesses that are heavily reliant on food services.
Ms Murray said “Tourism businesses are struggling to deal with ever-increasing operating costs and tighter margins. It is now essential that the Government tackles this head on and delivers targeted measures to enhance cost competitiveness and support business viability.”
“This is at a time when Irish tourism is experiencing difficult headwinds on a number of fronts, including reduced tourism expenditure, economic challenges across our key source markets and increased political uncertainty internationally – all of which pose a serious risk to our industry.”
Mrs. Murray noted that recent research by Fáilte Ireland shows that 51% of tourism businesses have seen a decrease in revenues to date in 2025 compared with last year.
Results indicate that overseas visitor spend, which typically accounts for 70% of tourism revenue, is a significant concern.
This is particularly challenging for ‘Food & Drink’ businesses, with 75% reporting a drop in overseas revenue so far this year.
Outlining the key policy priorities for the industry, Mrs. Murray stressed the importance of decisive action in the upcoming Budget:
Key policy priorities for Budget 2026
* A permanent restoration of the 9% VAT rate on hospitality food services. This is key to supporting the viability of our tourism food offering.
* A meaningful reduction in Employers’ PRSI for labour-intensive indigenous industries such as tourism and hospitality.
* Measures to tackle excessive business costs, which are amongst the highest in Europe, including insurance premiums and energy pass through charges.
* Increased investment in training, skills and development, leveraging the enormous un-tapped surpluses in the National Training Fund.
* Measures to support enhanced air access for Dublin and our regional airports.
* Increased funding for Fáilte Ireland and Tourism Ireland to support sectoral growth, marketing and development.
* More targeted measures to support sustainability initiatives within our sector in line with Ireland’s national climate action goals.
“Having these measures in place would go a long way towards ensuring the long-term success of Ireland’s tourism and hospitality industry,” she added.
