The number of tourists visiting Ireland has increased this summer after a late start, according to Fáilte Ireland.
The number of English and continental European visitors has risen since last year and although there are still fewer US tourists than pre-September 11th, the American section of the market is also recovering.
The general manager of corporate development at Fáilte Ireland, Mr Malcolm Connolly, said figures for the number of Irish people holidaying at home were "strong".
There were still no official statistics for this year but indications were of "low single digit growth" in tourism levels, he said. Nearly six million tourists visited Ireland last year.
Mr Connolly said June had been "weak" and there had been a trend towards booking holidays late. The number of Irish people holidaying at home had proven to be "very strong".
Hotel room occupancy levels were similar to last year but still hadn't returned to pre-September 11th levels. Hotels had done better than bed-and-breakfast establishments and guest-houses as they could afford to lower their prices to attract more trade.
Mr Connolly said that with concerns of an international economic down-turn and the weakening of sterling and the dollar, tourists were "more price-sensitive" than ever.
He warned the cost of living in the Republic had risen above the EU average and the price of drink, eating out, and shopping would have a direct impact on tourism. "We need to get general cost of living rates down. It can't be down immediately but we need to do it in the medium-term."
The chairperson of the Irish Self-Catering Federation, Ms Jacinta Stacey, believed the cost of living was exaggerated by the media.
"Irish holiday-makers complain about it because they want cappuccinos, paninis, and roast peppers. Foreign holiday-makers want tea, toast and home-made soup in granny's kitchen," she said.
Ms Stacey said it had been "a difficult year" for those involved in the tourism industry. "We thought the SARS outbreak would lead to a big rise in tourists as people avoided long-haul travel. We also thought we would have more British visitors keen to avoid France after the Iraq war.
"But the British have done the patriotic thing and stayed at home." The number of Irish holidaying at home has increased in August due to the good weather with accommodation by the seaside proving very popular, she said.
The East coast "did very well" but Co Kerry had experienced a down-turn in visitors in her section of the market, she claimed. Revenue was also down because foreign tour operators had stressed the need to offer discounted rates to attract customers. .
The chief executive of the Irish Hotel Federation, Mr John Power, has said the year had started slowly but August was proving to be a positive month and he predicted similar movement in September and October.
The number of inquiries from tourists for early next year was encouraging, he said. Mr Power said counties Donegal and Kerry were "holding up well" in terms of hotel business but Killarney, Shannon and Limerick had suffered from the decrease in US tourists.
Dublin was also "down a couple of percentage points". The number of business travellers had fallen. However, the number of people from the North holidaying in the Republic was strong.
Mr Brian Quinn of Ireland West Tourism said trade had "picked up after a very slow start". The recent good weather had led to an increase in island trips but had a negative effect on souvenir shops as visitors did not want to be indoors.