Rising Costs Challenge Donegal’s Hospitality Sector, Says IHF Chair

The Chair of the Donegal branch of the Irish Hotels Federation (IHF), Aisling Arnold, has highlighted the severe impact of rising costs on the hospitality industry. In her remarks on August 22, 2025, Arnold stated that the escalating expenses over the past 36 months have made operations increasingly difficult for businesses in the region.

During an interview on the Nine til Noon Show, Arnold emphasized the urgent need for the restoration of the 9% VAT rate, which the hospitality sector believes is vital for its survival. She noted that if the rate were reinstated, it could help safeguard over 270,000 jobs across Ireland, a significant figure for the country’s economy.

Arnold explained that businesses are being compelled to raise their prices to cope with the relentless increase in operational costs. This situation not only affects profitability but also places a burden on consumers, who may find themselves paying more for services that were previously more affordable.

According to Arnold, many establishments are struggling to maintain their viability under the current economic conditions. The hospitality industry, which has been a cornerstone of Donegal’s economy, faces unique challenges that are compounded by these rising costs. She called for immediate action from policymakers to address these issues, expressing concern that without intervention, many businesses may not survive.

The IHF’s call for a VAT reduction is part of a broader campaign to protect jobs and stimulate growth within the sector. The federation argues that a lower tax rate could enhance competitiveness, attracting more visitors and ultimately benefiting the local economy.

As the situation evolves, the hospitality sector in Donegal and beyond remains under pressure. The implications of these rising costs extend beyond individual businesses, impacting the overall economic landscape. With ongoing discussions regarding tax policies and support measures, the future of the hospitality industry hangs in the balance, contingent on the response from government authorities.

The urgency of this matter underscores the critical need for a collaborative approach to ensure that the hospitality sector can continue to thrive amid challenging economic conditions.