Ireland’s hospitality sector anticipates a strong winter with inbound travel recovery, tech adoption, and consolidation reshaping the market, says Bank of Ireland’s head of Hospitality Sector Gerardo Larios Rizo in his latest Developments & Insights report.
Inbound travel to Ireland is showing signs of recovery after a turbulent start to 2025, with recent months delivering strong performance and a positive outlook for the winter season.
According to the report, domestic demand, however, remains under pressure as households tighten budgets, forcing operators to rethink pricing strategies and lean into efficiencies.
“The market is becoming more sophisticated, and scale matters”
Figures from the Central Statistics Office indicate that the negative trend in inbound visitors earlier this year has reversed.
August and September arrivals posted gains compared to the same period in 2024. Dublin Airport reported 3.2 million passengers last month, an 8% increase year-on-year, supported by a 12.3% rise in capacity.
Gerardo Larios Rizo, head of Hospitality Sector at Bank of Ireland, explains: “The strong US demand and increased capacity position Ireland well for a solid winter season. American visitors now account for 25% of trips and 41% of inbound expenditure, which is a significant boost for operators.”
Domestic market under strain
Irish households continue to save at elevated levels, limiting discretionary spending.
Average spend per domestic trip has grown only marginally over three years, while trip length has fallen by 8%. Bord Bia forecasts foodservice growth in hotels and accommodation at just 2% this year, compared with 5% across other segments.
“Price sensitivity is curbing the ability to drive revenue through menu increases,” Rizo explains. “Value propositions and cost control remain critical for survival in this environment.”
Consolidation and scale
Hotel consolidation is reshaping the competitive landscape. Half of Ireland’s hotel stock now operates under group or brand structures, rising to 60% in Northern Ireland.
Expansion by groups such as Talbot Hotels, Address Collective and TMR in the Republic, and Andras, McKeever and Galgorm in the North, is accelerating. New entrants like Citizen M and Hoxton have landed this year, with Hilton’s Home2Suites and Sótel slated for 2026.
“Consolidation will drive operational efficiencies and intensify competitive pressure, particularly for independents,” says Rizo. “The market is becoming more sophisticated, and scale matters.”
Technology and the human touch
Staffing costs and consumer expectations are pushing operators toward AI-driven solutions, from robotics to self-service models. T
he business case promises payroll savings and enhanced customer experience, but Rizo warns of a trade-off: “The widespread embrace of certain technologies could lead to a diminished or less authentic experience when visiting Ireland. High-touch service may soon become a luxury differentiator.”
Rates hold firm despite supply pressures
Accommodation performance remains robust. STR data for October shows Dublin delivering a €7 RevPAR increase, with Galway and Cork posting gains of €11 and €10 respectively.
Kilkenny leads with an €18.8 surge in average room rate, while Belfast lags, down €0.50 year-on-year.
“Year-to-date RevPAR is less than 2% below the 2023 peak, which is encouraging given the material increase in supply,” Rizo notes.
As Irish businesses navigate a trading environment impacted by global geopolitical uncertainty, the opportunities associated with artificial intelligence (AI) and fluctuating consumer sentiment, the Bank of Ireland Sectors team examine the developments, challenges and opportunities across seven key elements of the Irish economy; Agriculture, Healthcare, Hospitality, Manufacturing, Food & Drink, Retail and Technology-media-telecoms (TMT).
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