Such was the gloom brought on by the wet and overcast weather one evening last week that Michael Cahill, who runs a pub, restaurant and guesthouse in Rossbeigh, in south Kerry, thought it could have been the middle of winter.

He blames the rain for the dramatic slump in tourism numbers in the Ring of Kerry and throughout the rest of the State. "On a sunny Sunday last May, there were about 5,000 people on the beach here. Now on any Sunday there would be about 50," he says. "The bad weather is putting people off."

He contrasts the slump with last summer, when his pub and restaurant were doing a thriving trade and his guesthouse was busy with holidaymakers and day-trippers.

The story is similar elsewhere. Some of the large hotels are doing well, because of the pre-booked foreign visitors, but the domestic tourism market has sharply declined.

Small hotels, guesthouses, pubs and restaurants are suffering most, particularly in scenic rural areas and in resorts which traditionally attracted visitors in large numbers. Industry sources estimate that the reduction could range between 10 per cent and up to 30 per cent in some areas, as Irish people opt for foreign holidays because of the unreliable weather at home and the feelgood factor generated by a buoyant economy.

A spokeswoman for Dublin Tourism said while the number of foreign tourists visiting its offices was marginally up on last year, there was a definite decrease in Dubliners booking holidays in Ireland. She said visitor attractions outside the immediate city area were experiencing a drop in numbers because the bad weather was discouraging visitors from making day-trips.

Teresa O'Donnell runs the Oakdale farmhouse in Glenties, Co Donegal. Located on the road to Donegal town, and near such popular locations as Ardara, Glencolumbkille and Glenveagh Castle, and advertised as being "in Daniel O'Donnell's area," it is a typical guesthouse used by Irish holidaymakers touring the northwest.

But there was nobody for bed-and-breakfast on four nights last week and on last Tuesday.

"This time last year, I was turning people away. I had advance bookings. Now there is just a trickle of visitors, and I don't see it picking up," says Ms O'Donnell.

Visitor numbers are also down in Connemara, traditionally a popular holiday location for city-dwellers and those interested in improving their Irish. Mary Cloharty, of the Carna Bay Hotel and Glynsk House Hotel, blames the weather, but also stresses the need for marketing. "It is necessary now because of the growth in accommodation. Numbers staying in the Carna Bay are up on last year because of marketing. We are clients of a marketing group, and it is performing very well for us," she says. She believes that the days when visitors casually booked into a hotel or guesthouse while passing by may be coming to an end. "I have found after 18 years in the business that you now have to get to people before they leave their living rooms. And that means marketing."

Some industry sources privately say that as well as the unreliable weather, high prices could be putting Irish people off holidaying at home. The secretary-general of the Department of Tourism and Trade, Ms Margaret Hayes, recently told the Dail Committee of Public Accounts that holidaymakers mainly complained about prices and litter.

Criticising high prices, the committee's chairman, the Fine Gael TD, Mr Jim Mitchell, remarked: "To bring your family out once a year would break you. And the price of the pint is going up every few months."

Michael Cahill agrees that there have been some complaints about prices. Another factor discouraging families from holidaying in scenic rural areas, he believes, is the lack of easy access to indoor leisure facilities, such as swimming pools.

But the wet summer is the principal reason for this year's slump, he says. "Nothing can be done about that. It is a matter for God."