Chief executive Pat Dawson said popular city breaks in the likes of Paris and Berlin had suffered in the aftermath of terrorist atrocities.
However, London is holding firm at the top of the tree when it comes to Irish weekend favourites despite recent terror attacks, while Rome and Barcelona make up the top three, an ITAA survey found.
Mr Dawson said favourites such as Turkey and Tunisia still have not recovered from an Irish tourist perspective because of terrorist attacks, but Morocco was making a comeback because of relative stability.
Spain and Portugal are reaping the benefits of customers feeling safe in their surroundings, easily topping the pile with Irish families, according to the latest ITAA quarterly survey. It showed provincial France has not suffered as much as Paris, making it into the top five destinations for holidays.
However, Paris has slipped down the list, along with Berlin.
Mr Dawson said Paris and Euro Disney had slipped down the list because of terror but London remained on top for short breaks, although a sense of uneasiness about visiting popular tourist areas such as Westminster was increasing.
The poor exchange rate from euro to dollar coupled with a belligerent political atmosphere under Donald Trump has hurt the US holiday trade from an Irish perspective, Dawson said.
“You can see it with airlines offering summer deals on seats to the USA all the time now,” he said.
“America is very expensive at the moment because of the exchange rate and it has suffered because of the political climate, which is seen as a bit unwelcoming at the moment.”
While no European airlines had received bad press like that which hounded United Airlines in recent weeks, customers were becoming more and more weary of extra charges imposed, said Mr Dawson.
“Ironically, that customer fatigue has had a positive effect on our business,” he said. “Travel agents in Ireland are doing well because customers are coming back to the idea of paying for a service and everything being taken care of.
“Service is the main reason for our revival. People are simply sick of exorbitant baggage charges and other fees. Airlines are giving with one hand and taking with the other. Customers like the certainty they get with travel agents and the lack of worrying about extra charges imposed.”
Meanwhile, Fáilte Ireland said it was actively assisting tourism businesses that traditionally relied on visitors from Britain. Visitors from Britain were down by 6% in the first quarter of 2017 and chief executive Paul Kelly admitted the trend was a concern.
A Fáilte Ireland spokesperson added: “Thanks to Brexit and sterling, it is a lot more expensive for British visitors. We will be actively helping businesses who have over-relied on British visitors to diversify into new markets. The numbers from the USA and Canada have huge potential to grow so we’ll be aiming to help pivot to those new markets.”
CSO figures showed while visitors from Britain were down 6%, North American visitors grew by 23%. Mainland European visitor numbers declined by 1%.