ONE in 10 Irish tour operators has not renewed its licence for 2010, with insiders claiming the industry has been hit harder in the last year than it was after the 11 September attacks in New York.

Figures from the Commission for Aviation Regulation (Car) show that 10% of tour operators and 5% of travel agents will not continue their business next year.

The startling figures come after a year of high-profile closures in the sector, including the recent collapse of Budget Travel.

Describing the fall-off in trade as being "significantly worse" than after the World Trade Centre attacks in 2001, a spokesman for Car said the increase in the non-renewal of licences was symptomatic of a struggling industry.

"The numbers are completely different to what they were in 2007/2008 simply because of the economic recession," he said.

"This is an issue of discretionary spending; people who have lost their jobs are not taking mini-breaks anymore."

Some companies have yet to renew their license and in order to do so they must show that they have a bond in place – either through a bank or an insurance company – to service financial and contractual obligations in the event that their company finds itself in trouble.

"It has been more difficult this year to get a bond. I can't think of anyone who has closed because they can't get a bond though, it generally seems to be a lack of business," said the spokesman.

But the situation is far from catastrophic, according to the Irish Travel Agents Association (ITAA), which claims the figures are not all they seem.

"We have seen a reduction in the number of licenses held but I wouldn't overstate that," said chief executive Simon Nugent. He said that some travel agents have given up their right to charter planes and are no longer arranging their products under that tour model.

"It's a challenging economy. There have been companies who have closed voluntarily, or they have retired and closed their company, and there have been those who have been forced to cease trading," he said.

"People have cut down the number of trips they are taking but according to all of the market research, people see the summer vacation as non-discretionary. We are not in a meltdown. We are still an island; it still gets wet and people still want to get away."