Tourism bookings from the US have dropped by up to 60 per cent from the same period last year as the impact of the September 11th attacks takes effect.
Traditionally most bookings for holidays to Ireland are made in the two weeks after Thanksgiving but tour operators have reported a very dramatic fall-off.
Mr Paul Diver, the secretary of the Irish Hotels' Federation in Co Donegal, said they were facing a huge loss of business from the American market.
"They are just not going to travel. All the tour operators are talking about a 50 to 60 per cent drop in bookings from the same period last year," he said.
Many hotels, he said, rely on the American market for up to 65 per cent of their business. He did not believe the home market could make up for these losses. Hotel owners were also concerned that business from Northern Ireland could be affected by the euro changeover.
At a tourism seminar in Enniskillen this week, the chief executive of the newly-established Tourism Ireland Ltd, Mr Paul O'Toole, accepted there was a lot of uncertainty and difficult trading conditions. He believed however the "core position" remained strong.
While 2000 was the best ever year for Irish tourism, the figures for 2001 could show a decrease of 10 per cent, he said.
He highlighted the damage done by the 25 per cent reduction in air seats into Ireland since September 11th. Mr O'Toole acknowledged that it could be reduced further.
He said it was important that US carriers were also encouraged to keep flying directly to Ireland - in the five years up until the recent crisis this business had doubled.
"We are now back to 1998 levels and if that slips back further that is a big problem for us," Mr O'Toole said.
Tourism Ireland Ltd was set up under the Belfast Agreement to promote the island of Ireland abroad. Of the 7.25 million who visited Ireland in 2000, the Republic got 88 per cent while Northern Ireland got between 14 and 15 per cent, showing that only a very tiny proportion visits both jurisdictions.
One objective of Tourism Ireland is to increase the numbers visiting both parts of the island. Measures to support Northern Ireland would include an integrated all-Ireland promotional campaign and specific initiatives in Scotland and the north of England .
Mr O'Toole said Tourism Ireland Ltd would support the introduction of new low cost carriers for the European market. He said they increased competitive access and this resulted in "a win win" situation for all carriers as overall demand increased.
The Chairman of the Northern Ireland Tourist Board, Mr Roy Bailie, said it would not come as a surprise to anybody that the North would like a bigger share of the market, but he said the NITB would not be entering into "turf wars" with Tourism Ireland Ltd.
The seminar, attended by the Minister for Tourism, Dr McDaid, was organised by North West Tourism and Fermanagh Lakeland Tourism. The chief executive of North West Tourism, Mr Paul McLoone, said there was a need for more co-operation between tourism organisations at regional level on both sides of the Border.