Last year's Irish tourism figures fell back to levels last seen in 1998, according to figures released by Fáilte Ireland today.
The organisation said tourism earnings fell to €4.6 billion last year - a drop of 13%. Visitor numbers fell 15% to 5.6 million. The British market declined 18%, meaning it made up about half of the total decline in numbers. The European market dropped by 17% and the US was down 9%.
Fáilte Ireland says a recovery of the British market is now a key aim for 2011 .
The body's research suggests that domestic holidays in 2010 were more or less at the same level as in 2009, although spending on home holidays declined.
Profitability fell for most accommodation providers during 2010 - including two out of three hotels, three-quarters of guesthouses and four out of five B&Bs. Fáilte Ireland says two-thirds of tourism operators lowered their prices during 2010 with almost all the remainder holding prices steady.
Two-thirds of businesses expect to maintain their 2010 prices in 2011 but one-third are expecting even further declines.
Fáilte Ireland chairman Redmond O'Donoghue said tourism businesses 'walked the tightrope' last year, but the survival of so many showed the resilience of the industry.
Fáilte Ireland's CEO, Shaun Quinn, emphasised that the prospects for the tourism industry in the year ahead would hinge more than ever on the performance of overseas markets as the home market had effectively peaked. 'It is in Britain, representing 45% of our overseas visitors, where we will need to turn the tide but where we face the greatest challenge,' Mr Quinn said.
He added that there were now some favourable factors, including falling prices in Ireland, a stronger sterling against the euro and the recent cut in the travel tax.
Fáilte Ireland's review pointed to some of the main worries within the tourism industry, including access to capital, and costs associated with local authority charges and utilities. Some firms in in the accommodation sector also expressed fears about so-called 'zombie hotels' driving rates down to levels which may not be sustainable in the long term.
