Nine out of 10 Irish hoteliers are concerned about the impact of Brexit on their business next year, a survey showed.
Prolonged uncertainty over the divorce from the EU could further erode tourism confidence, the Irish Hotels Federation (IHF) warned.
The representative organisation called on the Irish Government to tackle the high cost of doing business like “unsustainable” increases in insurance premiums.
President Michael Lennon said: “We are increasingly concerned about the direction that Brexit is taking and the impact that heightened uncertainty is having on our sector.
“A disruptive Brexit would have enormous economic repercussions which would be felt directly by tourism businesses given our heavy reliance on the UK market.”
Ireland is the EU state which would arguably be most affected by a no-deal Brexit.
It has traditionally relied on UK visitors for a significant chunk of its tourism market in Dublin and areas like the scenic west coast.
Mr Lennon said even if a Brexit deal is eventually reached, any prolonged uncertainty in the coming months could further erode customer confidence.
He added: “The impact would be more pronounced in regions with greater exposure to the UK market, particularly those outside the main tourism hotspots.
“These regions have lagged behind in recent years and can least afford the economic hit.”
The hotel industry grew this year but confidence in the future has dropped significantly, according to the Federation.
A fall in UK and Northern Ireland visitor numbers, with the pound weak against the euro, was masked by increases in other markets.
It said nine out of 10 hotels were concerned about Brexit and more Government measures were needed to mitigate risks to growth.
The Government has been leading a “Brexit roadshow” for months designed to help businesses around the country prepare.
Special assistance has been budgeted for in next year’s public spending plans and Taoiseach Leo Varadkar has said he does not think an emergency budget will be needed for a no-deal Brexit.
Some in the tourism industry are smarting from the recent decision to increase the lowered 9 per cent VAT rate to 13.5 per cent after the country recovered from recession.
Mr Lennon said: “The consistent growth achieved over the last seven years in a dynamic and competitive international market cannot be taken for granted.
“We are particularly concerned with the Government’s change in approach to tourism and the lack of recognition of the important role it plays as an engine of economic growth and regional balance.
“With the Brexit storm gathering, relentless increases in the cost of doing business, international trade wars, a slowdown in European growth and the increase in tourism VAT, there is little surprise in the drop in business sentiment.
“Many of our members are now re-examining their future investment strategies and taking a more cautious approach to planning for next year and beyond.” – PA