Fine Gael spokesman on tourism Jimmy Deenihan has called for a radical change in tourism policy to revitalise the domestic market.
A lot of Irish facilities were now "stale" and investment should be targeted in traditional resorts and not concentrated in trying to promote new and undeveloped tourist areas, he said.
Mr Deenihan was speaking in the aftermath of poor tourist figures for the B&B sector and record numbers of Irish holidaymakers going abroad.
This weekend has been one of the busiest ever in Kerry, with a record passenger number of 12,5000 flying into Kerry airport.
There have also been numerous private jets flying in for the Ryder Cup Challenge golf tournament in Killarney over the past week. However, the season has been a slow and patchy in parts of Co Kerry. Mr Deenihan said cost was not the only factor driving Irish people abroad.
"More investment is needed in indoor facilities for children especially. What is happening to some extent is resources are being spread evenly across the country, away from traditional resorts which could be built upon in terms of tourism infrastructure."
A lot of the facilities "have gone stale" and were no longer attractive to the Irish holidaymaker and particularly the Irish family on holidays.
Children had become a lot more demanding and their demands were not being met in many Irish tourist resorts. Water parks and indoor facilities for children were badly needed, Mr Deenihan said.
Figures released by the CSO this week for the first quarter of 2005 showed a 23 per cent increase in holiday trips abroad by Irish people on the same period last year.