Bed and breakfast operators have no future if they cannot offer more than a basic accommodation and breakfast service, Fáilte Ireland warned yesterday.

The B&B sector has declined in recent years and a Fáilte Ireland survey revealed almost one in five B&B operators believed that business would be worse this year.

"There are an awful lot of people in that sector who are getting out of it," said Fáilte Ireland chief executive Shaun Quinn. "People are retiring and there isn't necessarily another generation coming behind."

Asked if there was future for the Irish B&B, he said "it depends".

"If you are a B&B operator and you reckon that you are in the basis of providing solely a bed and breakfast on price-based competition, then that's not sustainable when you are up against a new hotel."

B&Bs could not hope to compete on price with a full-service hotel with restaurants and leisure centres.

"But if you say I am going to go back to basics, the business of having a family home experience, then there is definitely a market for that from overseas, particularly in the US and parts of Europe."

There are about 2,800 registered approved B&Bs in this State.

Mr Quinn said grading B&Bs was not a panacea for the industry's difficulties. "You'll never legislate for personal service in a grading scheme," he said.

"The family home experience is a USP, a unique selling point, certainly in US and in some continental countries."