A Michelin-star restaurant in Galway has fallen victim to "insane" running costs, with its owners deciding not to renew their lease.

The closure of Loam comes as the Restaurants Association of Ireland (RAI) cautions against raising the VAT rate for the sector, saying that on average, Ireland has lost a restaurant every day since September due to rising costs.

Loam, off Eyre Square, had closed as a restaurant and wine bar for the winter season, due to staff shortages and spiralling costs.

Head chef Enda McEvoy and his wife Sinead Meacle have now announced that it is time to work on a new project.

They explained: "We are sad to say that Loam will not be reopening in its current location in Fairgreen this spring.

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"We have been given the opportunity to be released from our lease and we have decided, after much deliberation, to accept this offer. The cost of running such a large space right now is insane and it doesn't look like it's going to get any easier."

They added: "In the background we are working on a new project and of course our other premises, Éan [a bakery and wine bar on Druid Lane], will be running as usual."

Loam first opened its doors in November 2014, holds a long-standing Michelin star and was voted 'Best Restaurant in Ireland' in 2019 at the RAI awards. Its name means "rich, fertile soil" and its ambition was to "capture the feeling and magic of the west of Ireland".

In late August, the couple told their customers via a message on social media that Loam was closing for the winter season, amid "such uncertainty" for the sector.

The couple have now said that they believe the venue's closure is the "correct course of action".

They continued: "We have made new friends in our regulars both local and international and we have seen countless first dates, anniversaries, birthdays and a number of weddings hosted in this space.

"We know this restaurant is special to a great number of you as it is to us. Thank you all for choosing to spend your special moments with us and there will be more special moments in the future."

Adrian Cummins, chief executive of the RAI, said: "Where we are now is an extremely precarious time for our industry, due to energy costs and high costs working in the business."

Image: Enda McEvoy Loam restaurant