Tourism and hospitality groups say the industry will be seriously damaged unless the government takes action to avert a growing crisis in the sector.

A report out today shines a light on the combined affect of increased VAT at 13 point 5 per cent and Government-imposed cost increases.

The research was commissioned by a number of representative groups in the sector - including the Irish Tourism Industry Confederation and the Restaurants Association.

The report's author, economist Professor Anthony Foley says it's not just tourism feeling the pinch.