A record 7.8 million overseas visitors came to Ireland this year, pumping €4 billion into the economy, according to the Irish Tourist Industry Confederation report for 2007.
The total tax take was in the region of €2.5 billion from an exchequer investment of €160 million, according to the confederation.
Most of the growth came from continental Europe, with big rises in the numbers of visitors from Scandinavia and Spain.
While some of the growth from continental Europe was driven by new markets in eastern Europe, the confederation said growth in France, Germany, Italy and particularly Spain had been fuelled by the expansion of low-cost air carriers, particularly Ryanair.
Britain continued to be the main source of visitors to Ireland at 3.8 million, but this figure represented zero growth over 2006, according to the industry.
The North American market grew by less than the predicted 4 per cent, coming in at about 3.3 per cent, largely due to the weakness of the US dollar. However, the confederation noted that only two European countries, Ireland and Italy, showed any growth from North America.
According to Dick Bourke, chairman of the confederation, the total revenue for 2007, from overseas visitors, at €4.1 billion, was about €1.1 billion up on 2006.
However he said if the domestic market was included, the total tourist revenue would be at least €1.6 billion higher - as the domestic sector had put in a "stellar performance".
Commenting on Ireland's prospects for the year ahead, Mr Bourke said open skies air agreements would be of benefit to the east coast, but he warned there was spare capacity into Shannon.
A Government marketing fund of €5 million had been set up to entice visitors to the west but he said he would like to see rapid progress on a feasibility study for a second national conference centre, which would be located in the west.
Mr Bourke said Ireland West Airport, Knock, continued to defy expectations and was an important gateway to the west and the northwest.
He acknowledged that B&Bs were being challenged by the arrival of new, lower-cost hotels, but he believed the B&B would continue to play an important part in tourism.
The Shannon cruising season was broadly similar to 2006, according to the report, which noted: "It is hoped that the longer-term decline has been arrested and that with the investment in bigger boats, the demand will rise again."
The report also noted there "needs to be improved integration between water- and shore-based facilities as well as better access to berthing facilities."
Some 113 cruise ships visited the Republic in 2007, 70 of which docked at Dublin, representing 60,000 passengers. Cork received 35 ships with 35,000 passengers, while Waterford played host to 18 calls and 18,000 passengers.
