A confidential report commissioned by the Irish Tourist Industry Federation is said to reveal dramatic price increases within the sector.
The report, which is yet to be published, says price increases are outstripping inflation and that the Irish tourism industry is seriously uncompetitive.
It also says the tourism boom is over, growth in the industry has stalled and the future of the sector will be threatened unless remedial action is taken.
Responding to the report's findings, the Minister for Tourism, Mr John O'Donoghue, said the tourism sector had a responsibility to keep its prices in check.
The report, details of which emerged on RTE radio this morning, says the global economic slowdown including the September 11th attacks and last year's foot-and-mouth outbreak have all impacted heavily on the industry.
However the report also blames the industry's decline on what it describes as a "severe loss of price competitiveness".
Irish inflation for the period since 1996 was just under 22 per cent, significantly higher than the EU average. However, prices in hotels and restaurants and for alcohol and tobacco grew by almost 33 per cent while the cost of various goods and services related to the tourism sector rose by a whopping 45 per cent.
Ireland, it says, is now the second most expensive country of the twelve eurozone members. Prices in pubs and restaurants in the Republic are the most expensive in the EU while the State is the second most expensive in terms of alcohol and cigarettes.
Labour Party spokesperson on tourism Ms Kathleen Lynch said the report confirms what many suspected about "the spiralling costs in the industry which are contributing to a decline in tourist number".
Ms Lynch called on the Minister to state immediately what action he intends to take to deal with the soaring costs in the industry.
