Earnings from tourists this year have increased, although the number of visitors to the State dropped by 5.2 per cent up to June, the Minister for Tourism, Sport and Recreation told the Dail.

Dr McDaid said earnings in the first six months increased by 3.8 per cent, to £1.3 billion while the number of tourists visiting the Republic, during the same period, declined to 2.7 million.

He said the slowdown was most acute in the case of Britain and north America. "Bord Fβilte now estimates that total overseas numbers for 2001 are likely to show a further reduction on that figure following the terrorist attacks.

"Bord Fβilte's original estimate for 2001 was for an increase of 5 per cent in overall visitor numbers, although that estimate had been revised significantly downwards in the light of the anticipated adverse impact of the foot-and-mouth disease emergency earlier this year." Dr McDaid said that no official estimates were, as yet, available relating to the loss of tourism business from the US and elsewhere arising from the New York atrocity.

"However, although it is accepted that it is still too early to assess the overall impact on international travel patterns, it is clear that the terrorist attacks in the US are likely to impact significantly on visitor numbers to Ireland, particularly from America, for the balance of this year and into 2002, leading to the first annual decline in visitor numbers for a decade."

Dr McDaid said it was vitally important that there was a root-and-branch reassessment of the State's tourism marketing strategies, including the focus on business. The Exchequer budget for tourism this year would be close to £90 million.