The survey interviewed almost 50 of Northern Ireland's leading hotels and guesthouses which represents 80% of the total capacity of the hospitality sector.

Visitors perceptions

concerns about travelling to Northern Ireland have already cancelled tours to Northern Ireland will cancel further tours if crisis continues

More than a quarter are considering immediate staff lay-offs, with a further 30% freezing plans to expand employment.

If business does not improve by July, nearly 70% of undertakings say they will have to make staff redundant, the survey says.

Tour operators that regularly bring volume business to Northern Ireland were also interviewed.

About 60% of operators said that clients had expressed concerns about travelling to Northern Ireland during the outbreak, cancelled tours to Northern Ireland and would cancel further tours if the current crisis continued.

Expectations dashed

Despite improved turnover in 2000, the foot-and-mouth crisis has dashed the expectations of all NIHF members for this year.

While 90% expected modest or significant growth, 86% have experienced reduced sales, 65 % reduced profits and 39% are currently experiencing cash-flow difficulties.

Economist Philip McDonagh said the hospitality sector was now operating at levels of activity almost 30% down on last year.

"The early season outbreak left enough time for tour and conference operators and even individuals to shift bookings away from Northern Ireland.

"The industry needs to get back to near capacity or the entire season may be in jeopardy," he said.

Mr McDonagh added the next ten weeks would be critical to the future of the industry.

"If there is another outbreak or consumer confidence is not restored, half the industry will have difficulty in meeting its financial obligations, and a third will be facing issues of future viability," he said.

The Department of Agriculture can be contacted on its helpline numbers on 02890 524279 or 02890 524590 between 0830 - 2100 GMT.