There has been a significant decline in confidence in the Irish economy among businesses operating in the 'experience economy', according to a new survey.
The sentiment study, carried out by employers group Ibec, shows that 49% of businesses are now less confident about the economy, compared to 28% six months ago.
Over 70 businesses operating in the sector, which includes hospitality, retail, travel, tourism, food, drink, entertainment, the arts, sports and events, were surveyed as part of the research.
The study was conducted in advance of the October Bank Holiday and mid-term break period.
It also shows that seven in ten of the businesses have concerns about Ireland as a strong tourism destination, up from 57% six months ago.
Ibec said the finding was "largely due to respondents noting a reduced demand from overseas travellers".
The business body said the experience economy sector contributes €4 billion annually to the economy and employs over 330,000 people.
Eight in ten of those surveyed said they expect "wage growth to continue, consistent with 2024, despite firms expecting total or domestic sales to remain stable".
The Head of Membership at Ibec Avine McNally said events taking place across the bank holiday and mid-term break, from the Dublin Marathon to events and family activities for Halloween, "will provide a welcome boost at a time when confidence in the sector is moving in the wrong direction".
Ms McNally said increased wages, significant labour policy changes, inflation, and rising operating costs have "put this critically important sector in a precarious position over the past number of years, resulting in many closures".
"While the research doesn't fully capture the boost the sector will receive from the Government’s decision to permanently reduce the VAT rate to 9% for the hospitality sector beginning July 2026, it is important to appreciate the context of its introduction," she said.
Ms McNally said the experience economy has been "under substantial pressure, as reflected in this round of sentiment research".
She said measures such as "a targeted PRSI rebate may also be needed to further offset costs".
"A busy festive period will hopefully provide a further boost, creating the foundations for a more optimistic 2026," she added.
