But the organisation says those in the tourism sector are slightly more optimistic about the prospects for 2010.
Fáilte Ireland says tourism brought just over €5bn into the economy last year, a drop of almost 17% from the previous year and the lowest figure since 2004.
In a review of the industry, the body blamed the fall in revenue on difficult conditions in the important UK and US markets, as well as intense competition which drove accommodation prices down.
But a Fáilte Ireland survey of tourism businesses found that they were more optimistic about 2010, with almost two-thirds expecting business to be similar to or better than 2009.
This was up from 20% in a similar survey last year.
Fáilte Ireland's figures show that the number of people visiting Ireland fell by 12% last year, with the weakness of sterling hitting the British market particularly hard.
There was growth from some European markets, however, with Italy showing a 19% increase.
But the number of home holiday trips fell for the first time in the past decade, to 7.9 million.
