The Irish Tourism Industry Confederation (ITIC) has renewed its call for the 9% VAT rate for the food-led hospitality sector to be restored at the start of next year.
The chief executive of ITIC said Budget 2026, which will be announced next week, is "vital for the sector" and he called on the Government to cut the rate from 13.5% on 1 January.
Eoghan O'Mara Walsh made the comments at confederation’s annual conference at the Lyrath Estate in Kilkenny, which is being attended by over 350 tourism industry figures.
Mr O'Mara Walsh said the costs of business are "a huge burden on tourism enterprises up and down the country" and he added that "margins are really, really being squeezed".
Mr O’Mara Walsh said the one thing that the Government can control is the applicable VAT rate.
"So, VAT needs to be restored to 9% for food services from 1 January. That's very, very important for a vulnerable yet viable sector."
A pledge to reduce the rate is contained in the Programme for Government, but it’s understood the coalition has been considering delaying the move until July.
However, Eoghan O’Mara Walsh said the industry wants to see the restoration of the 9% VAT rate coming at the start of January.
"I think the thing to keep in mind is that the winter months are the fallow months for Irish tourism and hospitality enterprises, so it's a really tough time."
The Minister for Enterprise, Tourism and Employment said the negotiations on the Budget are still continuing but he told the delegates that he is "very much committed" to a VAT rate cut.
However, Peter Burke would not be drawn on whether the revised rate will be introduced on 1 January or what form it will take.
"What I will say very clearly to everyone, I expect fully we will deliver on the 9%. I don’t want to comment on the timing. I don't want to comment on the form it's going to take, because I can't."
"It would be foolish of me to give assurances to people here when the decision fully does not rest with me but be assured, I am a firm advocate to ensure that we do get the 9% rate delivered," he added.
ITIC welcomed the Minister for Transport’s decision to legislate for the removal of Dublin Airport's 32 million a year passenger cap, which it described as "overdue".
Minister Darragh O’Brien previously said the process of getting the legislation passed is likely to take "a period of 10 to 12 months".
The chief executive of ITIC said that timeline is "too long to wait" and Eoghan O’Mara Walsh said the limit "needs to be lifted urgently".
"75% of the tourism economy is based on international visitation, so to have an arbitrary ceiling at our main gateway is self-sabotage," he added.
Tourism at 'critical juncture', says ITIC
Meanwhile, ITIC warned that tourism is at "a critical juncture" and it said the sector must be supported in Budget 2026.
The industry body said its members have concerns over competitiveness, connectivity and investment, which they hope will be addressed next week.
And it has called for an additional €90 million should be allocated to fund tourism agencies.
Eoghan O'Mara Walsh said CSO numbers for the first eight months of the year point to a 9% decline in inbound visitor numbers, and a 13% decline in expenditure, compared to the same period last year.
The Minister for Tourism has promised "a very strong budget for tourism".
Peter Burke said the "budget arithmetic is still being worked out, so we are still in negotiations".
However, he said the package for tourism will "reflect the employment, it will reflect the value of the sector, and it will reflect the work that our state agencies are doing, Fáilte Ireland and Tourism Ireland, and the need to expand into new markets and also to align policy with action."
Delegates representing tourism sectors for across the country attended the conference in Kilkenny, where there were mixed views of the performance of the industry so far this year.
The chief executive of the Association of Visitor Experiences and Attractions (AVEA) said two thirds of the businesses it represents outside of Dublin are "either flat or down" on last year.
Catherine Flanagan said for Dublin members and well-known visitor attractions around the country, "it's been a fairly strong summer, with good ticket admissions and retail performance".
"But outside of that, for the vast majority of our members, it's been very mixed, with two thirds of our members saying they were either flat or down on the previous year."
She has called for business supports around overheads and the costs of doing business in the Budget.
"They're impacting not just on tourism, but on SMEs all over the country. We're really feeling the pain on that."
Ms Flanagan said the AVEA is also looking for the 9% VAT rate to be extended to visitor attractions.
"We've done a calculation on that, and we have calculated that that would come in at a cost to the Exchequer of only €15 million for the full year of 2026," she said.
The Inbound Tourism Operators Association said it has been a positive year "on the whole."
Alva Pearson Downey said two thirds of tour operators "would feel that revenue, when we get to the end of the year, will be on a par with 2024".
She said while the ITOA does have concerns going into next year around the geopolitical environment, she said members are "pacing quite well currently for 2026, so business on the books will be on a par with that of this time last year".
Ms Pearson Downey said tour operators would like to see extra funds allocated in the Budget for semi state bodies, which promote Ireland overseas.
"We want to retain our efforts in the US market. We very much need extra support so that we can diversify within the European markets. We're in those markets. We're strong in those markets, but we know we can get more."
The delegates at ITIC conference were also told today by the Minister for Enterprise, Tourism and Employment that he will publish a new National Tourism Strategy next month.
