Overseas visitor numbers to Ireland hit a record high of 6.4 million in 2004, generating €4.2 billion in foreign exchange earnings, according to provisional figures released today by Failte Ireland, the national tourism development authority.
An estimated 7 million domestic trips added another €1.1 billion to the tourism sector last year.
The 3 per cent increase in visitor numbers was less than the 4 per cent target set by the Tourism Review Group and revenue figures were also hit by the trend towards shorter city-based breaks.
This trend is also reflected in the fact that Dublin has continued to dramatically increase its share of the market and now accommodates 31 per cent of British tourists and 20 per cent of all overseas visitors.
Ms Gillian Bowler, Failte Ireland chairman
While the top line figures are impressive Failte Ireland chairman, Ms Gillian Bowler cautioned that not all sectors of the industry are benefiting equally from the growth.
"The continuing divergence in experience between the east and west of the country is of major concern," said Ms Bowler.
"For example, hotel occupancy rates in Dublin were 70 per cent compared with a national average of 62 percent and 56 percent in the north-west. This is without doubt the overriding strategic issue and it will take time to address it."
Ms. Bowler said that if the Tourism Review Group's target of 10 million visitors annually by 2012 was to be met major projects such as a second terminal at Dublin Airport, a western road corridor and a national conference centre needed to be delivered quickly.
"The decision by Ryanair to base a hub at Shannon is a huge development when you look at the number of planes based there," said Ms Bowler.
"We should see that kicking in during 2005, and it's not just the number of planes that will impact but also the mix of routes being served."
2004 also saw a continued structural shift in tourist activity with hotels benefiting from a 5 per cent increase in overseas holiday nights, at the expense of guesthouses and B&Bs.
Although tax incentives for the building of new hotels expired at the end of 2004, Shaun Quinn, Chief Executive of Failte Ireland said he expected the supply of new rooms to continue to grow as international chains establish themselves in Ireland.
Although over one third of visitors still say Ireland is an expensive destination - broadly unchanged since 2003 but significantly up from the figure of 11 per cent in 2000 - Quinn pointed to the fact that 97 per cent of visitors said they would recommend Ireland to a friend.