Without tourism, the Government would have lost €2.2 billion last year, writes John Downes

Tourism is a €5 billion-a-year business in Ireland, making it the second-biggest indigenous industry after agriculture.

Last year, the revenue which it generated for the Government was estimated at €2.2 billion, bringing with it the equivalent of approximately 141,000 full-time jobs in the sector.

Put another way, if there was no tourism whatsoever in Ireland, the Government would be €2.2 billion a year poorer, and many of those people employed in the industry would find themselves out of a job.

Clearly, then, the success of the tourism industry in Ireland plays a very important role in the economic well-being of the Republic.

But which factors decide whether Ireland is having a successful year with regards to tourism? And as we settle into the school year, has it been a good summer for tourism here?

Three of the most important tourist markets for Ireland are Britain, mainland Europe and North America.

According to Mr Brendan Leahy, chief executive of the Irish Tourist Industry Confederation (ITIC), which represents commercial tourism organisations here, if international travel in general is down, this has a knock-on effect on Irish tourism.

The uncertainty following the September 11th attacks on the World Trade Centre in New York in 2001, the war in Iraq, and the threat from the SARS virus are all recent examples of events that have had an effect on the industry.

Another important issue is the degree to which a holiday destination has transport access, such as airports and ferry ports, allowing tourists to arrive at their destination easily.

Recent years have seen a proliferation in the number of companies - such as Ryanair and Aer Lingus - offering low-cost or budget fares to many and varied destinations.

While this has increased the number of people travelling abroad, it also means the length of stay - and ultimately the amount of money visitors spend - is decreasing, with some people choosing to take several short breaks to different destinations throughout the year rather than the more traditional two- or three-week summer holiday.

According to Mr John Brown of Fáilte Ireland, which promotes tourism within the Republic of Ireland, domestic tourism (people from the Republic choosing to holiday here) plays an important part in generating Irish tourism revenue.

Last year, it represented some €960 million of the total figure for the tourism industry.

Much of this tourism takes place in the off-season, or quieter periods of the year, when people choose to take short breaks as a means of getting away from the stress of their busy lives.

Ms Karen Brennan is the deputy manager of the Clew Bay Hotel in Westport, Co Mayo. While June was quiet enough, she said, July and August were a lot busier.

Much of the hotel's custom came from the domestic market, filling the gap left by what she sees as the decrease in overseas visitors to her hotel.

"The foreign market was down about 20 per cent this year," she said.

"So it was mainly domestic tourism which made up the shortfall. We are absolutely happy with the summer, as the domestic market tends to have a higher spend."

While the early part of this year began rather slowly, there is evidence that the trade is beginning to pick up momentum.

The number of British, European and North American visitors this summer has actually increased over the year, although there are still fewer US tourists than before the September 11th attacks, according to Fáilte Ireland.

Mr Bernard O'Riordan, managing director of Killarney Heights Hotel in Kerry, however, believes that despite this generally positive trend, his overseas visitor numbers have decreased by 30 per cent to 40 per cent this summer.

"The whole economic downturn following September 11th is still affecting trade," he says.

"A lot of our business comes from overseas visitors, and it will be a couple of years before this comes back... maybe August picked up a bit, a lot of Irish people would have stayed here, but once the schools reopened, this dropped again."

There are some other operational issues in the tourism industry that affect performance, including the relatively high overhead costs here - in particular, insurance, and the difficulties in recruiting and retaining suitable staff.

The high cost of living is another issue that the ITIC sees as having a negative impact on the performance of the tourism sector here.

However, despite these difficulties, it seems clear that the Irish market has generally performed well, even if that performance tends to vary from region to region and sector to sector.

In the current economic climate, tourism businesses are also having to price keenly to win customers in both the overseas and domestic market.

While this might be good news for people looking for a relatively inexpensive holiday, for an industry still recovering from some of the worst trading conditions in recent years, this has a somewhat inevitable knock-on effect on already tight profit margins here.