Donegal Hotels Face Financial Strain Amid Rising Costs

The Chair of the Donegal branch of the Irish Hotels Federation (IHF), Aisling Arnold, has voiced significant concerns regarding the ongoing financial challenges faced by the hospitality sector. Speaking on August 22, 2025, Arnold highlighted that businesses have endured escalating costs over the past three years, making operation exceptionally difficult.

“Ever-rising costs have made doing business exceptionally tough,”

Arnold stated during an interview on the Nine til Noon Show, emphasizing the urgent need for intervention. The IHF has been advocating for the restoration of the 9% VAT rate, which they argue is crucial for the survival of the industry. This reduction is projected to safeguard over 270,000 jobs across the nation, underscoring the potential impact on employment in the sector.

The hospitality industry has had to adapt by increasing prices to offset the rising operational expenses. Arnold pointed out that these hikes are often necessary to ensure that businesses remain viable. The ongoing financial strain has placed immense pressure on hotels, restaurants, and related services, which are vital components of the Irish economy.

The IHF’s call for a tax reduction reflects a broader concern within the industry about sustainability and growth. As businesses struggle with increased overheads, the potential for job losses grows, posing a threat not just to the sector but also to local economies that rely heavily on tourism and hospitality.

Arnold’s remarks are timely, considering the upcoming budget discussions where economic measures affecting the hospitality industry will be reviewed. The IHF hopes that policymakers will take into account the realities faced by businesses and respond with supportive tax policies that can help stabilize the sector.

In conclusion, the challenges posed by rising costs in Donegal’s hospitality sector are emblematic of broader economic pressures that many businesses across Ireland are experiencing. The IHF’s advocacy for the restoration of the 9% VAT rate is a critical step toward ensuring the continued viability of an industry that plays a key role in the national economy.