A new survey has found that some 89% of hotels and guesthouses have reported increased business levels so far this year.
According to the latest Hotel Barometer from the Irish Hotels Federation (IHF), the number of overseas visitors has increased by 12% year-to-date.
The sector is benefiting from an upturn in tourism from all key markets including North America (visitors up 14%), Britain (up 11%) and the rest of Europe (up 13%).
The domestic market is also showing signs of improved performance, which is enormously important for the sector given demand from the island of Ireland accounts for the majority of all hotel bednights (69%).
A total of 64% of hotels and guesthouses said that they have increased staffing levels during the last 12 months, while 55% plan to take on further staff over the next year.
Overall, some 95% of hoteliers say the 9% VAT measure will assist them in hiring additional new staff and/or retaining current levels over the coming 12 months.
Stephen McNally, president of the IHF states that confidence among hoteliers continues to improve as the recovery in tourism strengthens.
He said: "Irish tourism has performed strongly since the start of the year and throughout the summer season, with overseas visitors set to reach over 7.8 million by year end – a level not seen since 2007.
"The improved outlook for future trading conditions is providing a significant boost to tourism businesses throughout the country, including hotels and guesthouses."