Ireland’s hospitality sector is now in the second half of 2026 with stronger financial performance, as revenue gains come from higher room prices instead of more guests. The industry faces new pressures from rising costs and shifting customer habits, forcing businesses to adjust their strategies to stay profitable.
According to Bank of Ireland’s most recent sector analysis, average daily rates (ADR) continue to be the main factor behind revenue per available room (RevPAR) increases in most locations. Dublin sustained an occupancy level of 82% during the first half of the year, while regional destinations such as Limerick, Kilkenny, and Galway posted some of the steepest RevPAR rises. Limerick saw a 9.4% year-over-year improvement, Kilkenny achieved 7.8%, and Galway recorded 6.9%, though Cork’s growth remained more modest. Belfast returned to positive figures, whereas Derry/Londonderry still struggles.
International tourism has played a key role in this recovery, with visitor numbers up 18% over the first five months of 2026. European travelers accounted for 24% of the increase, while North American arrivals rose by 15%. North American guests remain particularly valuable, with average spending per trip reaching €1,219—well above the levels seen from British or European visitors.
Behind the demand figures, a major change in supply is unfolding. Properties previously tied to protection contracts are now returning to active use, reducing the share of registered tourism accommodation under such agreements from 13% of the national total in summer 2023 to just 3.7% by May 2026. While this will eventually add capacity, the effect will differ by area and won’t immediately expand commercial availability.
Domestic tourism continues to be vital, especially in smaller markets and during slower periods. Irish travelers support local businesses, though operators note shorter booking lead times and a rise in last-minute reservations. Instead of expanding capacity, businesses are now prioritizing upgrades to facilities, energy savings, and enhancements to guest experiences.
Operators are also turning to technology to safeguard profits and service standards. Tools like artificial intelligence, automated systems, dynamic pricing software, and energy-tracking platforms are now considered essential for maintaining efficiency. The Bank of Ireland report highlights that while demand remains robust, the focus for the coming months must shift toward turning revenue gains into stronger cash flow.
For the second half of 2026, the bank forecasts low-to-mid single-digit RevPAR growth, largely due to price increases. Dublin’s occupancy is projected to remain stable at 83.8%, with full-year RevPAR up by 1.1%. Additional support could come from continued strong demand from North America and Europe, favorable currency exchange rates, and major events. However, businesses will need to monitor consumer confidence, rising airfares, geopolitical instability, and ongoing cost pressures.
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