Tourism Minister Leo Varadkar has warned businesses they must past on the savings to customers created by today's VAT cut on many services.

Minister Varadkar said the reduction in VAT - from 13.5% to 9% - was 'hard fought for' and a failure to implement it would make it difficult for similar supports to be given by Government. He said he expected the cuts to be passed on.

Many hotels, restaurants, cafés and hairdressers across the country say they have already passed on the cut.

The Government hopes the move will see prices fall across a series of industries, boosting visitor numbers to Ireland and creating jobs

Hotels say their industry will pass on the price cuts, while restaurants have produced special signs and posters for consumers confirming the price cuts have been passed on.

In some instances price drops may not be dramatic, though restaurants say an average of €1 will be cut from menu prices - and both consumers and tourists are being told they are the real watchdogs.