Hotels and guesthouses saw a 1pc increase in national room occupancy levels last year as more overseas visitors came to Ireland.
Speaking on the eve of the Irish Hotels Federation's annual conference, chief executive Tim Fenn said hotels in large urban areas and tourism hotspots had done well from the influx of visitors.
Many rural hotels continued to face the twin pressures of weak domestic demand and difficulties encouraging overseas visitors to venture outside traditional locations, he added.
Overseas visitors grew by 7.2pc to 6.99 million in 2013 thanks to The Gathering, more advertising and a cut in VAT. Still, domestic demand, which accounts for two-thirds of all hotel nights, was subdued.
"We're effectively seeing a three-speed recovery, with Dublin city centre positioned in the fast lane and tourism hotspots such as Cork, Galway and Killarney doing fairly well," Mr Fenn said.
"Unfortunately, rural areas such as the Midlands, Shannon and North West are lagging behind due to their over-dependence on local consumer spending."
Total revenue generated across all tourism-related businesses in 2013 was up 5pc at €5.7bn and accounted for 4pc GNP.
Of this, €4.3bn was attributed to foreign exchange earnings (overseas visitors). Home-grown tourism was flat with revenues from the domestic market up 1pc at €1.4bn, but significantly down on pre-recession levels.
The IHF's 76th annual conference begins today in Knightsbrook Hotel in Trim, Co Meath.