The Restaurants Association of Ireland warns that over half of businesses have been forced to reduce trading hours or days due to rising costs.
The Restaurants Association of Ireland (RAI) has highlighted the vital role the hospitality sector continues to play in supporting communities, employment and the wider Irish economy, while warning that over half of businesses have been forced to reduce trading hours or days due to rising costs. With 3,000 members, the Restaurants Association of Ireland is the representative body for restaurants, cafés, gastropubs and other food-led businesses in Ireland.
The social and economic heartbeat of communities
Hospitality remains one of Ireland’s most important indigenous industries, with 99.6% of businesses classified as SMEs and just 73 out of 20,213 considered large enterprises, operating in every town, village and city nationwide. The food-led hospitality sector is central to local economies and serves as the social and economic heartbeat of communities across the country.
Hospitality is one of the main entry points into employment for young people, providing important first job opportunities for students and younger workers, particularly in rural and regional areas where alternative employment options can be limited.
While new survey findings from the Restaurants Association also highlight the ongoing cost challenges facing businesses, with 75% of businesses considering or having already reduced staff hours due to continued rising costs, which risks impacting the sector’s ability to provide these employment opportunities.
The Restaurants Association of Ireland also acknowledges the Government’s ongoing engagement and understanding of the sector’s challenges, including the reinstatement of the 9% VAT rate from July 1st, which according to the survey 78% of businesses say is essential to their survival.
At the same time, the survey highlights the ongoing strain on operators:
- 56% of businesses now report labour costs exceeding 40% of turnover
- 75% are considering or have already reduced staff hours due to rising costs
- 50% have already reduced opening hours or trading days
- 53% are delaying or cancelling investment
Recent data from the Central Statistics Office further reflects these challenges. In the year to January 2026, the value of food service sales declined by 5.3%, while volume fell by 8.6%. Employment across food and beverage services also declined by 3.8% year-on-year.
The Restaurants Association of Ireland also welcomed the engagement led by Minister Peter Burke, noting that the forthcoming report from the Cost of Doing Business Advisory Forum is expected to identify practical measures to reduce business costs and improve operating conditions.
Commenting on the findings, CEO of the Restaurants Association of Ireland, Adrian Cummins said:
“Hospitality plays a unique and vital role in Ireland’s economy and society. For many young people, it is their first job, where they gain confidence, learn essential life skills and take their first steps into the workforce, something the sector is incredibly proud of.
Across rural communities, towns and cities, these businesses are at the heart of local life. Made up overwhelmingly of small, locally owned businesses, the sector provides vital employment and is one of the most accessible entry points into work for young people, particularly in rural and regional areas.
However, the reality is that rising costs, particularly labour costs, are placing significant pressure on businesses. If these pressures continue, there is a real risk that some businesses may not be in a position to take on staff or offer the same level of opportunities to young people which no one wants to see happen.
We welcome the Government’s understanding of these challenges, including the reinstatement of the 9% VAT rate and the work through the Cost of Doing Business Advisory Forum. The 9% VAT rate will provide meaningful support, but it is important to recognise that our labour-intensive sector continues to be significantly impacted by rising costs.”
For further information about the RAI, visit https://www.rai.ie
