Bord Failte is braced for a significant fall in overseas visitors following last week's attacks on the United States, which could outstrip the impact of the Gulf War a decade ago.
Officials at Bord Failte said today it was too early to assess the extent of the damage done to tourism by the suicide attacks on New York and Washington, but warned they could be far-reaching.
"This is a very worrying time for the tourism industry, which is just recovering from the effects of foot-and-mouth disease earlier in the year," said Bord Failte spokesman John Brown.
"We know the airlines have already seen a drop in bookings, but what concerns our industry more is the medium- to long-term effects, and in that there is the extra factor of what kind of retaliation is being planned." The biggest immediate fear is that big-spending North American visitors will stay away, as they did in 1991 during the Gulf conflict.
"In 1990 we had 443,000 North American visitors in the Republic of Ireland, in 1991 it fell to 356,000 and it took three years to recover to the 1990 level," Mr Brown said.
The losses in revenue for the Irish tourism industry are potentially greater now, with the number of North American visitors to Ireland breaking the one million barrier for the first time last year.
They are our highest spending visitors, they are big users of car hire, big users of hotels and big spenders on shopping," he added.
Last year, visitors from the United States and Canada between them spent IR£557 million during their stay.
Businesses in the tourism sector were reluctant to be drawn on the likely impact, with a spokesman for Jurys Doyle Hotel Group saying it was too early to comment .
But share prices have been hit, with Jurys Doyle down 6.67 per cent at 7.0 euros at 16:30 GMT, and Gresham Hotel Group down 4.0 percent at 0.72 euros.