Figures released today show that the number of international visitors to Ireland grew by an estimated 5% in 2005 to almost 6.7 million.
The Irish Tourist Industry Confederation described their figures as encouraging, but said there are some major challenges for the industry.
Preliminary figures from Fáilte Ireland indicate that more tourists are travelling to Ireland, but many are coming for shorter trips and staying in cities and towns rather than rural locations.
Visitor traffic from Britain for 2005 shows a modest increase of around 3% on last year.
The North American market remained largely the same.
With growth in air travel, this year Ireland had 16% more visitors from mainland Europe, while there was a decrease of 9% in those coming from other parts of the world.
Not all sectors of the tourism industry have shared in the growth.
With more people travelling by air, ferries are losing out, and with fewer cars coming from Britain, regional and rural tourism sectors are suffering.
Urban areas are taking much of the business; indeed Dublin continues to grow as a travel destination.
Next year, Tourism Ireland will spend €64m in aggressive overseas marketing campaigns.