SOMEBODY, says Liz Fahy, had to point out that the emperor was wearing no clothes. Ms Fahy is managing director of Holiday Ireland, an organisation that has been marketing Ireland for 20 years on behalf of its 40 affiliated hotels. Her comments that cancellations by potential overseas visitors for the first quarter of this year were twice the level they were for the same period of 1996 brought expressions of bafflement from Bord Failte.

Yet many hoteliers agree with her. They say potential visitors from Britain, Europe and North America are cancelling trips to Ireland because of the punt exchange rate, and because of the political situation in Northern Ireland.

When they are pressed on the matter, many are also distinctly sceptical about the new brand Ireland logo which is being used to market Ireland abroad.

Ms Fahy emphasises that her comments are about the first quarter. Last year was the best ever for the first quarter but this year her members have experienced "a dramatic cancellation rate". That rate has almost doubled, to 62 per cent, and inquiries are down by half on the same period last year.

She welcomes the Bord Failte marketing drive in Europe but called for it to be extended to Britain and intensified to alleviate "what could be a disastrous season for the Irish tourist industry".

She is unenthusiastic about the "brand Ireland" campaign and the £100,000 logo introduced last November and currently being "rolled out" across Europe and North America. "I think change for change's sake is not a good marketing idea."

Spokesmen for Bord Failte dismiss Ms Fahy's claims and say the Republic is on course for reaching its target of a 7 per cent growth in numbers and a 9 per cent growth in revenue in the tourism sector this year.

Ms Fahy counters with a list of hoteliers who support her view, and adds that some hoteliers have given information about their cancellation rate to Bord Failte to show them what is happening.

Brian McEniff, who owns five hotels in counties Mayo, Sligo and Donegal, and is a director of Holiday Ireland, says the figures for overseas visitors coming to his hotels in the first quarter are down between 8 and 12 per cent as against last year.

Visitor numbers from Scotland and England are probably down because of the Northern Ireland situation, while those of people from further abroad are probably down because of the exchange rate and Northern Ireland.

He noticed the drop in business as early as January. "When we identified the problem we got off our bums and changed our marketing strategy," he says. "The home and Northern Ireland markets, are performing very well for Mr McEniff's brother, Sean, who has two hotels in Co Donegal and is building a 259 room hotel in Dublin, beside the Bleeding Horse pub on Camden Street, holds a different view. Sean McEniff, who is on the board of Bord Failte, says between £15 and £20 million was invested in tourism in Bundoran last year. "It's all upbeat. You don't get that sort of investment if the confidence isn't there."

Tourism Minister Enda Kenny says he believes Ms Fahy is "off the mark completely". Mr Kenny, who appointed her to the National Tourism Council, says he has reason to believe CSO statistics to be published next week will show a good first quarter for 1997 in terms of overseas visitors.

He says that tour operators and carriers are reporting excellent business. The targets which were set for this year will be reached, investment in hotels is continuing, and he wishes Ms Fahy would come and explain to him the reasons why she said what she did.

"I don't know why she is making these comments and there is certainly not any drop off due to the logo," Mr Kenny says.

Bord Failte says the estimate for visitors in the first quarter is up 10 per cent on last year. It is expected that the CSO figures will confirm this, a spokesman says.

However, although overall figures are growing, some hotels and some regions may not be faring well. "The industry we have today is different from the industry we had two years ago. There will be 20 new hotels built this year in Dublin alone, making for an additional 2,000 rooms. The industry needs a huge increase of business growth each year and some are maybe not experiencing the increase in business that others are, or that they need."

Bord Failte is confident the sector will meet its target for 1997 of 4.7 million overseas visitors spending £1.88 billion. It predicts that by 1999 revenue from 5.5 million overseas tourists will equal £2.25 billion, a threefold increase on the 1987 figure.

Despite all this optimism and billion pound forecasts, Bord Failte called a special board meeting last week to discuss how the sector was performing and how the Republic was being marketed.

"It was not a meeting to discuss the shamrock or the (brand Ireland) new logo," says the spokesman. He insists the whole industry is behind the logo introduced in November and points out that the shamrock remains as the logo used by Bord Failte. The logo is part of the multi million pound campaign aimed at attracting younger people to Ireland from abroad, and the performance of the campaign will be monitored.

"That process has just begun. Within a matter of months we will sit down and discuss the first reports and decide on any fine tuning which needs to be done. We will not flinch from any decision that has to be taken.

"We are not going to throw out the new logo and put the shamrock back just because a few journalists and observers have been making a noise about it."

The brand Ireland campaign is an all Ireland campaign run by a number of bodies including Bord Failte. Sandra Elliot, sales director with the Northern Ireland Tourist Board (NITB), says it is "far too early" to establish the results of the campaign.

What the NITB needs, she adds, is a ceasefire and a resolution of the marching season controversy, so that visitor numbers to the North might return to 1995 levels. It is a sentiment with which Enda Kenny agrees.

"If Adams and McGuinness could do their thing, not only would they get into talks, but the impact on an industry that transcends borders and religion would be huge."