Over half of tourism operators have reported a downturn in business this year

Seán McCárthaigh

Over half of tourism business owners in Ireland have reported a downturn in business so far this year, according to new research published by Fáilte Ireland.

A study on self-reported assessment of the tourism sector by people involved in the industry found just 24 per cent of businesses claimed revenue had increased this year compared to 2025, while 51 per cent had experienced a decrease in turnover.

The reported downturn in revenue was most pronounced among B&B operators, activity providers and pubs and bars as well as among operators based on the Wild Atlantic Way.

The study noted that similar research carried out last year had found respondents stating that 2025 was a good year for the industry.

However, Fáilte Ireland said the latest results of its Tourism Businesses’ Sentiment Survey, which obtained the views of over 640 operators on trade in May, showed the upward trend in performance had not continued so far this year.

The results did suggest that tourism businesses in Dublin are performing better than those in other parts of the country with 38 per cent of respondents in the capital claiming revenue had increased in the first few months of 2026 – the same proportion as reported that turnover was down.

Approximately three-quarters of all operators claimed their business had been impacted by the war in the Middle East which had escalated costs and led to cancellations as well as some reluctance to book holidays.

A similar proportion claimed energy costs had risen, while 53 per cent said they had been affected by disruption linked to the nationwide fuel protests which took place in April.

Fáilte Ireland observed that concern by Irish tourism businesses about an over-reliance on the North American market especially because geopolitical events could deter US citizens from travelling abroad had increased because of the US-Iran conflict.

The survey revealed that 50 per cent of operators said cancellations had increased during 2026, while 45 per cent claimed booking had fallen compared to last year.

Hotel owners reported that longer leisure stays are not happening to the same level as in the past.

Asked how they were addressing the impact of the situation in the Middle East on their trade, 55 per cent of respondents said they were finding ways to cut costs, while 33 per cent said they would absorb increased costs.

A third of operators said they would target domestic holidaymakers as all major overseas markets had been affected by the war to a similar extent.

Nevertheless, most types of operators with the exception of attractions and hotels, claimed the domestic market is down this year as it appeared that consumers lack disposable income.

Looking ahead to the remainder of the year showed tourism business owners were cautious in their expectations with 43 per cent still expecting a decrease, although 29 per cent said they expected their revenue would be up for the rest of 2026.

Business sentiment was notably stronger in Dublin where 43 per cent of operators believe turnover will increase over the remainder of the year compared to 32 per cent who expect a decrease.

Fáilte Ireland said the results of the survey reflected self-reported sentiment rather than hard data as it focused very much on the opinion of tourism operators.

It pointed out that the year began on a positive note with strong growth in inbound visitor numbers for the first quarter which was up 24 per cent annually.

Fáilte Ireland said the reported sentiment in the survey for several businesses was more negative that official figures would suggest.

“This could be attributed to elevated expectations and a run of ‘bad news’,” it added.

Fáilte Ireland stressed that there were also plenty of positives in the sector, particularly in relation to summer air access which is up 5 per cent on UK routes and 7 per cent on flights from the US.

It added: “Growing Irish incomes and accumulated household savings are supportive of strong domestic demand.”

The tourism body said it was also encouraging to see that many operators across numerous sectors had stated they were investing in their business, despite significant cost challenges.