A quarter of businesses in the “experience economy” are less confident than they were six months ago, new research has found.
A similar proportion of firms indicated they expect conditions to be poor over the next six months.
The experience economy includes hospitality, retail, travel, food, drink, tourism, entertainment, the arts and events.
The survey of 328 firms, conducted by employers’ organisation Ibec, also found 25% of respondents expect their turnover to decline.
Over 70% said they have the same or are more confident about their business than they were six months ago, when similar research was last conducted.
Energy, inflation and competitiveness, and the cost of labour were identified as being the top three risks.
Just 17% said they have plans to implement sustainability related initiatives in the next 1-2 years, despite three quarters of respondents agreeing it’s a priority.
Digitalisation is a priority for just 14% and less than half of this cohort intend to introduce related projects in the coming 1-2 years.
“The survey has brought to light the competitive challenges faced by businesses within this sector,” said Sharon Higgins, Executive Director, Membership and Sectors in Ibec.
“The input costs due to the increases in energy, inflation cost of labour with the impending national minimum wage increases, on top of recent VAT increases along with many other input factors will make it very difficult for these businesses in the coming months.”
“A worrying insight from the survey is that digitalisation is a priority for only 14% of businesses.”
To address the challenges in the sector, Ibec wants the Department of Enterprise to have strategic oversight and responsibility for the development and delivery of a holistic strategy for the entire sector.
It also wants the Government to better coordinate labour market regulation and cost factors and limit any further cost competitiveness measures that could threaten business viability.
It also wants details of the €250m SME support package announced in the budget, amid concerns it may not be sufficient.