Next year will be a challenging one for Irish tourism, despite expectations of a continued increase in overall tourist traffic.

Tourism Ireland and Fáilte Ireland's ambitious new targets for 2004, unveiled in a joint announcement yesterday, include increasing overall tourist traffic in Ireland by 4.4 per cent next year to 7.7 million.

However, senior managers from both organisations cautioned that more tourist traffic might not lead to increased revenues for tourism providers.

Tourism Ireland's chief executive officer, Mr Paul O'Toole, said: "Growth in visitor numbers has not translated into an improved bottom line for some tourism sectors due to a number of factors."

He said this trend was likely to continue into 2004.

Revenues were flat this year, despite an increase in the number of travellers, as rising costs and fierce competition from overseas put downward pressure on margins. The strong euro made overseas visitors more cost-conscious, and a long-term trend towards shorter breaks meant tourists were spending less time - and therefore less money - here.

Mr O'Toole said bringing bigger spenders to Ireland would be a major focus of next year's marketing push.

"We will be targeting the more discerning consumer. We need to make sure we don't totally go down the cheap-price route," he said.

Fáilte Ireland said plans to attract wealthier tourists included an increased emphasis on sports tourism, especially golf and angling.

Another focus will be on improving access to Ireland by sea and by air. Tourism Ireland said it would work with carriers to create new air routes from mainland Europe and increase co-branding arrangements with airlines in the United States.

The Government has pledged more than €110 million for tourism next year, a 4.5 per cent increase over last year. Of that, €70 million of the total will go towards marketing.

The industry is expected to spend around €120 million of its own money on marketing next year.