A new study by the Irish Hotel Foundation found 63% of Irish hotels saw business from the UK either stall or decline during the summer period.
The result comes in stark contrast to strong results from other markets, two-thirds of the hotels surveyed said business from US visitors had increased.
The research shows that tourist numbers from Britain rose by just 1pc last year, while US numbers jumped by 19% and mainland Europe visitors rose by 6%.
One in three tourists who came to Dublin last year was from the UK, so a return of the British market to its former strength is a real necessity for the hospitality sector.
Some operators have been hit much harder than others by the stagnation of UK business. Bed and breakfasts, hostels and golf clubs have reported the sharpest declines in UK tourists of late, while hotels have reported more stable business levels.
The IHF has repeated calls on the Government to maintain the special 9% VAT rate enjoyed by the hospitality sector since 2011. Transport Minister Leo Varadkar, pictured, has voiced his support for this move, but comments made by Finance Minister Michael Noonan on Friday night indicate the rate is unlikely to be extended for another year.