The Minister for Arts, Sport and Tourism, Mr O'Donoghue, conceded that the tourism industry was undergoing a "difficult" season.

"However, I believe from my initial soundings - and this view is shared by the tourism State agencies - that the degree of difficulty varies from region to region and from sector to sector."

Mr O'Donoghue said that close to €10 million in Exchequer funding would be spent this year supporting the industry. "I will urgently review the situation to see what further steps can be taken to help the industry to meet the unique challenges which they are facing this year."

The Minister said that while air and sea passenger movements were up on last year, indications were that outbound business was more buoyant than inbound.

He added that the US market continued to be a challenge with the pace of recovery slower than hoped. It was of interest that US airlines were reporting that their peak season was generally slacker than anticipated so that Ireland would not be the only country experiencing difficulties with the US market.

He said the indications were that the strong performance in the domestic market towards the latter part of 2001 had continued into 2002, which was of benefit to many businesses, especially hotels.

"It may well be that the World Cup will have an impact on travel trends this year, especially in June. It does seem that there has been some softening in the British market in the past three to four weeks, and some commentators have linked this to the World Cup. The combination of poor weather and the World Cup may also have had an adverse impact on domestic tourism."

The Minister was responding to a Fine Gael motion calling for Government action to halt the decline of the industry.