As Ireland’s Budget 2026 approaches, hoteliers across County Louth are making a united appeal to policymakers: enact swift, targeted policies to protect and revive the region’s fragile tourism and hospitality industry. Represented by the Irish Hotels Federation’s (IHF) Mourne Boyne Lakes Branch, local hotel owners are warning that escalating operational costs, tight margins, and a lack of competitiveness are putting the long-term future of regional tourism at risk.
Cost Pressures Threaten Hospitality and Regional Food Services
Businesses in Louth—especially those offering food-related services—are under severe financial strain. Operational costs have surged, squeezing profitability and endangering viability. According to IHF regional spokesperson James McKenna, these pressures are placing local tourism enterprises on a precarious edge, threatening the very foundation of hospitality in the area.
Restoring the 9% VAT Rate: A Crucial Lifeline
A central ask from Louth hoteliers is the reinstatement of the 9% VAT rate on food-related services, lowered from the current 13.5%. This move, they argue, would align Ireland with the majority of its European peers and help level the playing field. Germany, for instance, plans to reduce its food-service VAT from 19% to 7% from January 2026—an example of proactive support for the sector that Ireland should mirror. Such a measure, say Louth’s hoteliers, is essential to sustaining employment, preserving competitiveness, and enabling continued investment in regional offerings.
Tourism: A Regional Pillar Under Threat
Tourism and hospitality are among Ireland’s most significant indigenous industries, supporting over 270,000 livelihoods nationwide, including around 3,000 jobs in Louth alone. Yet, the sector is battling headwinds: falling revenues, economic instability in key markets, global political uncertainty, and intensified competition from destinations with lower operating costs are all fueling concern.
IHF’s Pre-Budget 2026 Recommendations
Ahead of Budget 2026, the IHF has outlined a suite of measures aimed at stabilising hospitality across Ireland:
- Permanent 9% VAT rate on hospitality food services to aid business viability.
- Relief on operating costs, including energy pass-through charges and high insurance premiums.
- Support for hotel employee accommodation, addressing staffing shortages linked to housing constraints.
- Sustainability incentives aligned with Ireland’s climate goals.
- Increased funding for Fáilte Ireland and Tourism Ireland to drive marketing and development.
- Enhanced air access for both Dublin and regional airports to boost visitor arrivals.
- Training and skills investment, leveraging surpluses in the National Training Fund for hospitality workforce development.
Government Engagement and Broader Support
Ahead of Budget 2026, IHF leadership is set to meet with Ministers including Paschal Donohoe and Jack Chambers, underscoring the urgency of these issues. Meanwhile, the Irish Hotels Federation is advocating for a special grants programme for retrofitting properties and addressing infrastructure bottlenecks that hamper tourism growth, especially at Dublin Airport.
Why This Matters for Louth and Beyond
County Louth — steeped in history, natural beauty, and hospitality — depends heavily on tourism. Hotels and eateries employ scores of local people, generate visitor spend, and fuel small businesses throughout the region. Failing to act now risks not just the survival of individual ventures, but the broader economic and cultural vitality of communities across Louth.
A Region Poised for Recovery—With the Right Support
With Europe’s travel sector cautiously recovering, and Ireland’s domestic and international tourism figures slowly rebounding, the potential for a strong revival exists—if supported proactively. Restoring VAT relief, reducing cost burdens, investing in workforce skills, and expanding accessibility through air travel could transform vulnerability into renewed regional prosperity.
Looking Ahead: Budget 2026—A Turning Point for Tourism
The government’s decisions in Budget 2026 will be closely watched by Louth’s hoteliers and across Ireland. Will Budget 2026 become a turning point that safeguards rural hospitality, empowers sustainable tourism sector recovery, and restores Ireland’s competitive edge globally? Or will it pass without the decisive action needed, risking long-held livelihoods and the future of regional tourism?
As Louth prepares for the critical weeks ahead, its hospitality sector is united and ready—with clear, feasible policy demands. What now rests on government shoulders is the will to act fast and secure the future of Ireland’s regional tourism.
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