Value for money will help the tourism sector recover next year after it was hit by a one million fall in visitors in 2010.
A review of the industry revealed numbers were down 16 per cent on 2009 to an estimated 5.5 million with the lucrative British market seeing the largest drop.
In its annual review and outlook, the Irish Tourist Industry Confederation (ITIC) said the falling business appeared to have bottomed out.
“Despite the severity of the recent downturn, tourism is still big business,” ITIC chairman Tom Haughey said.
“And in the current year generated revenue of 4.5 billion euro and supported close to 200,000 jobs.”
An ITIC survey carried out in two waves before and after the Government announced its €15 billion four-year savings plan reported an optimistic outlook.
The body said the main reason was an improvement in value in Ireland.
It also pointed to the buoyancy of the US market and economic recovery across Europe as key drivers in better tourist trade along with a more favourable exchange rate between the euro and sterling and the dollar.
Mr Haughey warned: “Recovery in tourism will have to be driven by growth in overseas visitors as weakness of demand is very likely to be experienced in the domestic market over the next couple of years.”
The survey also revealed three-quarters of businesses believe the banking and economic crisis has damaged Ireland’s image.
ITIC warned it was undermining confidence of overseas business suppliers as well as damaging consumer perceptions.
Elsewhere, the survey showed that the number of British visitors to Ireland fell by 1.3 million on 2009 figures.
It found that earnings from overseas visitors contracted by a third over the past three years, with annual revenue now €1.7 billion less than it was in 2007.
ITIC also praised the Government’s decision to cut the airport departure tax from €10 to €3 and growth incentives by the Dublin Airport Authority will provide an opportunity to recover some of the air services lost over the past two years.