Donegal enjoyed a bumper weekend of tourism business with many hotels at full capacity thanks to an influx of visitors over the Northern Bank holiday weekend.

However, as the summer season draws to a close a leading hotelier has warned that many hospitality businesses in Donegal will be forced to reduce their opening hours or in some cases close altogether because they can’t cope with rising costs across the sector.

He said that if the government fails to agree to a further extension in the reduced VAT rate of 9 per cent for their sector, many tourism operators in the county will be in trouble.

“Businesses in the hospitality sector have already absorbed massive energy and staffing costs,” Mr Diver said.

“And going forward, with the VAT rate set to increase at the end of the month this will push costs up even further.”

“If the VAT rate does go up they just simply can’t pass it on to the consumer because it is expensive enough as it is,” Mr. Diver added.

“They (the public) can’t absorb it either, so they are just going to cut back on their opening hours and the food that they are offering.