Some hoteliers have reported electricity price increases of over 400% and gas price increases of over 300% since 2019, according to a new survey by the Irish Hotels Federation (IHF).
The data reveals that linen costs are up 29%, food up 22%, and beverages up 12% in the past 12 months.
Denyse Campbell, President of the IHF, said that Government support in next week's budget is critical to offset the immediate financial shock that businesses are facing.
She said now is not the time to increase the 9% Tourism VAT rate.
"As the main tourism season draws to a close, businesses are reporting skyrocketing cost increases, which are nothing short of frightening," Ms Campbell said.
"One hotelier in the Southwest has reported how their monthly electricity bill rose from €8,300 in July 2021 to €18,000 in July 2022.
"Another larger hotelier in the Northeast received a one-month energy bill for €122,000 in August 2022, up from €27,000 in August 2021," she added.
Today's IHF data reveals that hoteliers are reporting forward occupancy of just 23% in November and 18% in December.
"What's even more concerning is that energy prices are projected to get worse," said Ms Campbell.
"Combined with rapidly cooling demand – with hoteliers projecting forward occupancy of 23% in November and 18% in December – many businesses are finding themselves under greater pressure now than during the darkest days of the Covid-19 pandemic," she added.
The IHF has called for a number of supports in the upcoming budget.
"There is an immediate need for measures to mitigate the impact of the energy price increases, financial support for businesses through continuity grants, and increasing grants to enable hotels to become as sustainable and low carbon as possible," she said.
"Critically, these are needed in conjunction with the retention of the 9% Vat rate for the tourism and hospitality sector.
"The 9% VAT rate is the right rate for long-term sustainable growth in the tourism industry and has brought us in line with our European competitors.
"Increasing the VAT to 13.5% in March 2023 would make Ireland's VAT rate the second highest in the EU and will impact tourism businesses in every part of the country," she added.