The Commission for Regulation of Utilities (CRU) has approved a 9.8% increase in water charges for businesses.
Industry bodies have expressed concerns about the hike, which will come into effect from the start of October.
The Irish Hotels Federation (IHF) said this is just one example of how increased operating costs are undermining the viability of businesses.
“Over a two-year period, the average 70-bedroom hotel in Ireland will have seen an increase of over 40% in water tariffs,” said Michael Magner, IHF President.
“This is unsustainable given the exceptionally challenging environment in which hotels and other hospitality businesses are currently operating.”
According to Mr Magner, the hospitality sector is disproportionately impacted by increases in water charges, which he said businesses are unable to absorb.
“The cumulative impact of these and other cost increases now poses a serious threat to the viability of many businesses through our wider tourism and hospitality sector.
“It is now imperative that the Government tackles these increases head on and delivers targeted measures to enhance cost competitiveness and support business viability,” he added.
Mr Magner said the industry is particularly concerned about the potential for further annual increases through to 2029.
“We are calling for a fairer funding model that supports the long-term sustainability of Irish water services, while maintaining cost competitiveness for SMEs,” he added.
The Restaurants Association of Ireland (RAI) previously called for any utility increases to undergo an SME test to assess the impact on businesses.
In a similar response to the IHF, the RAI stressed that hospitality businesses will be among the hardest hit by this increase.
“We are just incredibly disappointed, once again, another cost is being heaped on struggling hospitality businesses. This is a ludicrous decision in the current climate,” said Adrian Cummins, CEO of the Restaurants Association of Ireland.
“There seems to be no logical thinking here. On one hand, you have businesses needing support due to the soaring cost of doing business. On the other hand, water charges are being hiked by nearly 10%. Is there anyone left with common sense?,” he asked.
In its decision published yesterday, the CRU said the increased water charges are necessary to ensure the reliability, efficiency and sustainability of water services.
