Ireland’s hospitality industry is poised for a strong second half of 2026, buoyed by increasing hotel revenues despite a complex operating environment marked by rising costs, shifting consumer trends, and evolving accommodation options.
Room rates propel growth
A recent report by Bank of Ireland, titled Hospitality Sector H1 2026 Insights and H2 2026 Outlook, reveals that growth in the sector is primarily driven by increases in room rates, rather than occupancy levels. Several regional destinations are outpacing larger urban areas as hotel operators focus on converting revenue growth into sustainable profits.
The average daily room rate remains a key factor in driving revenue per available room (RevPAR) growth across most markets. In Dublin, occupancy levels remained strong at 82% during the first half of the year, while regional destinations such as Limerick, Kilkenny, and Galway recorded significant RevPAR increases.
Year-over-year RevPAR increased most in Limerick, rising 9.4%, with Kilkenny posting 7.8% and Galway 6.9%. Cork recorded a smaller rise, Belfast moved back into positive territory, and Derry/Londonderry still struggled.
Inbound tourism on the rise
Inbound tourism has provided a welcome boost to the sector, with trips to Ireland increasing by 18% in the five months to May 2026. European visits rose by 24% and North American visitor numbers increased by 15%. The report notes that international brands, alternative accommodation providers, and technology-led operators are increasing competitive pressure across the market.
North American travelers continue to be an important market for Irish hospitality businesses, with average visitor expenditure from the USA and Canada reaching €1,219 during the period, significantly higher than visitors from Great Britain and continental Europe.
Gerardo Larios Rizo, who leads the hospitality division at Bank of Ireland, said the industry’s results show a market shift in which simply growing revenue is no longer enough.
“H1 was not simply a demand recovery story; performance was rate-led, uneven by geography, and increasingly dependent on operators’ ability to convert RevPAR into margin,” he said.
Accommodation supply shifts and domestic support
Fáilte Ireland figures indicate that lodging registered under the Beneficiaries of Temporary Protection and International Protection schemes fell from 13 % of the country’s total tourism beds in the summer of 2023 to 3.7 % by May 2026.
Although the change should raise tourism capacity gradually, the analysis points out that effects will differ across regions and will not instantly boost the stock of commercial lodging. Home-grown demand continues to be a vital support for the sector, especially in regional areas and in the off-peak periods.
Local travelers in Ireland still back domestic tourism operators, yet hoteliers note that booking lead times are shrinking and last-minute bookings are rising. Capital spending is now leaning more toward refurbishments, upgrades for energy efficiency and upgrades to the guest experience, rather than constructing new properties.
Technology and the path to profitability
Adopting technology is growing in relevance for hospitality, as AI, automation solutions, revenue-management platforms and energy-tracking tools aid in safeguarding profit margins and upholding service quality. The forecast for the rest of 2026 stays upbeat, especially for Dublin where occupancy is projected to hold at 83.8 % and RevPAR is anticipated to increase by 1.1 % over the year.
