Why the 9% VAT cut won’t save Irish hospitality

The real problem isn’t tax - it’s cost

Energy bills, wages, insurance, rent, supplies — everything has risen faster than the sector can pass on to customers.

A VAT cut affects what you charge, not what you pay. It offers short-term relief, but not structural support.

Many operators will simply use the VAT saving to absorb rising costs rather than lower prices. Understandable, but it means the consumer won’t feel it — and the benefit disappears quickly.

It’s too little, too late

The cut isn’t expected until mid-2026. By then, hundreds of small operators could already be gone.

Margins are wafer-thin, and cash flow is the killer — relief in July doesn’t pay January’s bills.

Uneven and unfair

Hotels and mixed venues may be excluded, creating an uneven playing field within hospitality itself.

Restaurants get help, but hotel dining rooms and pubs serving food may not. That complexity doesn’t help an already over-regulated sector.

Short-term thinking creates long-term uncertainty

The industry has endured years of rate changes — 9%, then 13.5%, now back to 9%.

Businesses can’t plan pricing, investment, or hiring with that kind of instability. What’s needed is predictability, not ping-pong policy.

The real levers of competitiveness lie elsewhere

The hospitality sector needs:

• Employer cost reliefs – PRSI and auto-enrolment supports
• Energy and insurance reform – to make costs more sustainable
• Targeted grants and digitalisation incentives – to modernise operations
• Stable multi-year tax policy – to build confidence and plan ahead