A €200 million drop in tourist revenue and a 3 per cent downturn in overseas visitors in 2008 was reported by the Irish Tourism Industry Confederation (ITIC) yesterday.
ITIC, which represents a cross-section of tourism bodies, said yesterday the outlook for 2009 was "gloomy", with a 7 or 8 per cent drop in visitors next year likely.
The organisation called on the Government to reduce VAT for one year to improve competitiveness and boost consumer spending.
"We have to give the consumer some reason to be a little more confident about spending money," ITIC chief executive Eamonn McKeon said.
While almost five million overseas tourists brought in some €7.5 billion this year, visitors from the main overseas tourist markets dropped significantly, it said.
UK tourists, who accounted for more than half of all visitors, fell by in excess of 4 per cent last year. This sharp decline began in September when UK visitors dropped by 10 per cent. Due to the weakness of sterling and a cutting back in short trips, a fall in British visitors is predicted next year.
North American visitors were down by 8.5 per cent to under one million, while continental European visitors were down by 2 per cent. Both the US recession and a reduction in direct air services to Ireland have made this market "the most challenging", ITIC said.
The economic downturn in all of Ireland's main tourist markets is "uncharted waters" according to Mr McKeon. "We have had situations previously where the UK was in recession but Germany was not . . . but we have never had all our markets including the domestic market in recession previously," he said.
ITIC does not expect the tourism market to lift until 2010. Mr McKeon was, however, hopeful that "the worst will be behind us by next year".
Growth in the domestic tourist market fell rapidly this year and is expected to contract by a few per cent next year.
"People who were taking four or five weekends away are taking one or two, and we think spend will be down," Mr McKeon said.
However, he noted there would be "wonderful value available to encourage people to stay at home" as businesses sought to attract customers.
Decline has been felt across the sector, according to the ITIC, such as an estimated 10 per cent drop in revenue in the hotel sector.
The tourism body was calling on the Government to reduce VAT, to provide a stimulus package. The national pay agreement was "unwarranted and should be abandoned".
However, the recapitalisation of three Irish banks was welcomed by Mr McKeon, who said tourism needs access to credit more than any other sector because of its seasonality.
He said he would be watching the banks to ensure credit began to flow to small businesses as many members had been having difficulties accessing credit.
