A new Fáilte Ireland survey shows 43% of tourism businesses reported a fall in summer income, with restaurants and B&Bs hit hardest.
Energy and payroll costs remain the main concerns, while international visitor numbers from North America and Europe also fell.
Despite challenges, the Northwest, and Sligo in particular, continues to offer strong value for money and scenic attractions.
Speaking to Ocean FM News, former Restaurants Association president and Sligo restaurateur Anthony Gray says: "Sligo is punching above its weight, but government action on rising costs is urgently needed."
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