The number of tourists visting Ireland last year fell by 15% to 5.6 million people, the lowest level since 1998.
New figures from Fáilte Ireland also show that the number of people taking home holidays dropped by 4% to eight million.
The end of year review says the overall earnings from tourism declined by 13% in 2010 to €4.6bn.
The number of visits from mainland Europe fell by almost 17%, with the North American market down 9%.
Chairman of Fáilte Ireland Redmond O'Donoghue said 2010 was an "extraordinarily difficult year" for the sector, with visitor numbers falling back to 1998 levels.