Irish hotels increased their average room rates by 3 per cent in 2025 amid strong demand for accommodation despite declines in domestic travel and the volume of tourists visiting the Republic from overseas, Fáilte Ireland said on Tuesday.
In its inaugural quarterly economic report, the tourism body said the hotel sector experienced its best months in September and August.
This was driven “partly by the two American football events in Dublin”, August’s Aer Lingus College Classic between state universities Iowa and Kansas and September’s NFL game between the Pittsburgh Steelers and the Minnesota Vikings.
Based on monthly data provided by the hotels to Fáilte Ireland market data company STR, the average hotel occupancy rate was up to 78.4 per cent in 2025, from 77.8 per cent in 2024.
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Average daily rates increased by 3 per cent to €174, as did revenue per available room – a key measure of profitability within the industry – to €136.
Fáilte Ireland characterised the increase in room occupancy as marginal and said that the increase in average daily rates was in line with general tourism price inflation, which was 3.1 per cent last year.
According to the data, room rates reached their peak in August at €202.
The sector’s performance was notable, given the decline in both inbound and domestic tourism last year.
Citing previously reported Central Statistics Office (CSO) figures, Fáilte Ireland said the number of overseas trips to Ireland slid 3 per cent in the year after a weak start to 2025, impacted by the Trump administration’s tariff agenda in the US.
Overseas tourist spending, which accounts for 60 per cent of total tourism spend in Ireland, also slumped, dropping 9 per cent to €5.47 billion in 2025.
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Domestic tourism also faced challenges. Irish households took 3.1 million domestic trips within the State last year, an 8 per cent slide on 2024, the CSO said last week. The figures do not include visits from Northern Ireland.
Minister for Tourism Peter Burke said the findings are encouraging.
In his introduction to the report, the Fine Gael TD said: “Despite the very real challenges facing the industry – including rising input costs, increasing consumer price sensitivity, and heightened geopolitical uncertainty – the resilience, adaptability and determination of Ireland’s tourism SMEs are evident throughout this report.”
Burke said the lowering of the VAT rate for the hospitality business to 9 per cent from July 1st will be a “key measure” to help the sector in a challenging environment.
In a survey of hospitality businesses included in the report, some 88 per cent of restaurants and cafes said they would benefit from the measure, as did 75 per cent of hotels.
The estimated cost of the VAT reduction, one of the more controversial policies announced on budget day last year, is €232 million in 2026 and €681 million in a full year.
