One million fewer passenger trips were made on the Luas this year, the Railway Procurement Agency (RPA) revealed today.
But the agency insisted the light rail system was performing well despite the economic downturn.
Some 27.4 million passenger journeys were made on both the Red and Green lines over the past year, down significantly on the 28.4 million made in 2007.
However, the figure is still up on the 25.8 million trips in 2006.
RPA chief executiveFrank Allen said the performance was encouraging in very difficult economic circumstances.
"The fast, reliable and comfortable service which Luas has provided over the last five years has produced a loyal and consistent customer base which has become more discerning in getting the best value for money from the range of ticket options which are available," he said.
Customers are switching away from buying single journey tickets at vending machines and opting more for period passes and off-system sales outlets.
Sales off monthly and annual tickets, which carry tax benefits, are up by more than half.
Use of the Luas Smartcard is up 28 per cent while integrated Irish Rail and Luas tickets are up 15 per cent.