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The experience economy covers a broad range of events including the arts, culture, food and drink, sport, heritage, travel, and entertainment, where the customer experience is based on turning up in person. The survey gathering responses from over 70 businesses found that 49pc of firms are now less confident about the Irish economy than they were six months ago, up from 28pc in the previous study. Nearly eight in 10 companies expect to face wage increases over the next six months, reflecting continuing upward pressure on pay across the sector. The sector employs more than 330,000 people and contributes approximately €4bn annually to the Irish economy, it said. The study was conducted in advance of the October Bank Holiday and mid-term break period. Ibec explained that while the October mid-term break is expected to bring a short-term boost in the activity, many firms remain under pressure from higher labour and operating costs. Despite the challenges, most businesses plan to continue investing in digitalisation and staff training, it said. About 80pc said they intend to implement digital transformation initiatives within the next one to two years to improve efficiency and customer engagement. Investment in sustainability is expected to decline in the short term as firms focus on managing costs, it said. Ibec’s study found that while domestic demand remains relatively stable, the combination of inflation, rising wages, and uncertainty in international tourism markets continues to weigh on business sentiment. “Increased wages, significant labour policy changes, inflation, and rising operating costs have put this critically important sector in a precarious position over the past number of years, resulting in many closures,” said Avine McNally, the head of membership at Ibec. The survey suggests that while the upcoming holiday period will provide temporary relief, many operators are adopting a cautious outlook for 2026 as external demand softens and cost pressures persist. Commenting on the planned reduction in the Vat rate across the hospitality sector, Ms McNally said. “While the research doesn’t fully capture the boost the sector will receive from the Government’s decision to permanently reduce the Vat rate to 9pc for the hospitality sector beginning July 2026, it is important to appreciate the context of its introduction.”
