29% of businesses operating in the experience economy are less confident about their company than they were six months ago, new data shows.
A survey carried out by Ibec shows that one in four of these businesses are less confident about the overall state of the economy.
According to the business group, 300,000 people work in Ireland's experience economy, which contributes €4 billion to the Irish economy.
80% of respondents said the cost of labour was the biggest risk to their business, while 73% cited increased overhead costs.
Businesses also cited government regulation and compliance, alongside cybersecurity as major risks.
This latest Ibec survey targeted consumer-facing businesses across the country, operating in the restaurant, bar, accommodation and retail sectors as well as the wider supply chain including food and drink.
40% of respondents were from front of house businesses, while 60% came from the wider supply base.
"With the school midterm break ongoing, many of us, with our families, will be enjoying Ireland's vibrant experience economy," said Sharon Higgins, Executive Director of Membership and Sectors at Ibec.
"Unfortunately, many of the businesses at the heart of this sector remain vulnerable, as the data shows," she added.
While cost pressures remain, Ms Higgins said significant progress has been made through initiatives such as the enhanced SME Test, the new Better Regulation Initiative, and pauses in Statutory Sick Leave increases.
But, she said additional relief is still needed.
"As we approach an election campaign and the formation of the next government, it’s important that the next Government have a clear direction on how we continue to support vulnerable businesses and ensure that new policies do not inadvertently drive up future costs," Ms Higgins said.
"As a business community, we will engage with policymakers to highlight ways to maximise current efforts - such as ensuring that the enhanced SME Test and guidelines are rigorously applied by all government departments to measures impacting SMEs directly or indirectly.
"We will also highlight additional measures, such as a PRSI rebate and how they could help offset labour costs for any business struggling," she said.
Today's findings show that 87% of businesses agree that sustainability is a priority.
A similar proportion plan to implement sustainability initiatives in the next one to two years.
Meanwhile, digitalisation is a priority for 67% of respondents, with 66% intending to introduce related projects in the next one to two years.
