Ireland’s hospitality industry is demonstrating resilience despite a challenging start to 2025, according to executives speaking at Bank of Ireland’s ninth annual Hotel Sector Briefing.
Gerardo Larios Rizo, head of Hospitality Sector at Bank of Ireland Corporate & Commercial Banking, told attendees that while inbound visitor numbers were down 8% year-on-year to the end of September, North American arrivals rose 4% and now account for a quarter of inbound traffic and 41% of expenditure.
“The fundamentals remain solid, with consumer spending forecast to grow 2.8% this year and Modified Domestic Demand up 3.4%,” he said.
“AI is shaping how hotels forecast demand, personalise guest experiences and optimise pricing,”
Capacity constraints remain a concern, particularly the cap at Dublin Airport, though September saw a record 3.35 million passenger arrivals. Northern Ireland posted softer growth overall, with the exception of City of Derry Airport, which grew by 40%.
Powering the Irish brand
Gerardo Larios Rizo, head of Hospitality Sector at Bank of Ireland
Larios Rizo highlighted structural shifts in the hotel market, noting that the number of four-star properties has climbed from 279 in 2015 to 380 today, while three-star hotels have declined from 341 to 265. “Brand penetration, particularly in Dublin, has gathered speed this year with upcoming openings including Sofitel, Hoxton and Home2 Suites by Hilton,” he said.
Technology adoption is accelerating, with artificial intelligence moving beyond buzzword status. “AI is shaping how hotels forecast demand, personalise guest experiences and optimise pricing,” Larios Rizo said, adding that Irish operators are exploring generative engine optimisation as a new distribution channel. Energy management systems are also gaining traction as part of ESG strategies, despite waning enthusiasm in some quarters.
John Feeney, CEO of Corporate & Commercial Banking at Bank of Ireland, said the sector remains a cornerstone of the Irish economy, supporting more than 270,000 jobs. “While the industry continues to face challenges including margin pressures and uncertainty around the reduced VAT rate, our customers remain optimistic and forward-looking,” he said.
Feeney pointed to strong investment momentum, with new developments and refurbishments alongside sustainability initiatives and technology upgrades. Major events have boosted tourism, including the 153rd Open at Royal Portrush, which attracted 278,000 spectators, and an NFL game in Dublin that drew an estimated 35,000 American visitors.
Accommodation formats are diversifying, from glamping pods to aparthotels, reflecting evolving traveller preferences. Generational shifts in ownership are also reshaping the landscape. “These transitions speak to the resilience and adaptability of the sector, and we’re privileged to be part of your journey,” Feeney said.
Bank of Ireland is investing in digital transformation to simplify services and enhance customer experience. “Our sectoral insights and dedicated hospitality team ensure we stay close to the pulse of your industry,” Feeney added.
Conall Mac Coille, the bank’s Chief Economist, added that while macroeconomic conditions remain stable, “the sector must adapt to shorter trip durations and flat spending patterns.”
The briefing featured a panel of industry executives chaired by Pat McCann from Dalata, including Alice Mansergh of Tourism Ireland, Janice Gault from Northern Ireland Hotels Federation, Paul Gallagher of the Irish Hotels Federation and Eoghan O’Mara Walsh of the Irish Tourism Industry Confederation, who agreed that collaboration between stakeholders will be essential to navigate the next phase of recovery.
Davy Private Clients has urged Irish business owners to take a proactive approach to financial planning as significant changes to the pension system and tax reliefs come into effect. Speaking at the event, Barry Kennelly, director at Davy Private Clients, said: “Planning in advance is critical and getting the right tax advice is really important to ensure that available reliefs can be utilised.”
Sustainability in the hotels sector
Jenny De Saulles, director of Sector Development at Fáilte Ireland said the tourism body has intensified efforts to embed sustainability across the tourism sector, citing strong results from its Climate Action Programme. The initiative, which now includes more than 180 hotels, offers three years of advisory support and easier access to grants.
Hotels participating in the programme are saving an average of €35,000 annually without upfront investment, according to Fáilte Ireland data. Small and medium-sized enterprises can cut energy bills by up to 30% through simple efficiency measures.
Energy usage per guest night fell by a median 12.1% between baseline measurements and 2023, while potable water consumption dropped 7.81%, equivalent to 140 million litres annually. Carbon emissions per guest night declined by 13.6% for Scope 1 and 2, averaging a 3.4% annual reduction.
Performance among participating hotels exceeds international benchmarks. Median emissions stood at 6kg CO₂e per guest night in 2024, compared with EarthCheck’s average of 21kg for Ireland and UK hotels.
The agency is also advancing its Employer Excellence Programme, which has impacted 30,000 employees across the sector. Engagement levels are high, with 75% of staff and 89% of leaders reporting positive outcomes. The programme has improved talent retention and reduced turnover costs, with 26 tourism businesses recognised among Ireland’s top workplaces.
Fáilte Ireland said these measures are central to future-proofing the industry and meeting national climate targets, which include halving greenhouse gas emissions by 2030 and achieving net zero by 2050.
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
For support in challenging times, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. All episodes are here. You can also listen to the Podcast on:
-
Spotify
-
SoundCloud
-
Apple
