The "pervasive negativity" of two new reports into the crisis in the hotel industry points to the imminent threat to one in five hotel jobs and many hotels facing closure.

There is an upside, however. The average price of a room dropped to €77.81 last year – down by 20% since the 2007 peak.

Guests may be echoing through the marble hallways in their luxurious tax-break-funded hotel because 45% of rooms are spookily empty on a weekly basis; the restaurant may be short on atmosphere as they savour the value menu; some of those must-have extras of the boom such as a duvet 'turndown' service at dusk may be gone, but overall guests' bills are now at their lowest level for 10 years. The depth of the crisis that now faces an industry that has lost €1bn in income in just two years – €3.9bn in 2009, compared with €4.9bn in 2007 – is alarming.

But the reasons for the crisis also show how the sector, just like the wider economy, has become a victim of its own greed.

The first of these reports, a survey by Limerick accountants Horwath Bastow Charleton for the Irish Hotels Federation, paints a grim picture of empty rooms, zombie hotels, debt and gloom. While the economy grew, we needed to expand our hotels, but the unfettered tax-break scheme meant 16,000 extra rooms were built between 2005 and 2008 when just 6,000 would have met even the highest demand. The debt burden on every room built under this scheme is now estimated to be €135,000.

Many of the new businesses, built by developers according to the rule of thumb of Tiger morality – as tax shelters for profits made from overcharging for houses and apartments – are now, as we know, run by Nama. Their long-term economic value is totally dependent on their staying open – empty or full – until the last day of the tax break. Rooms in these swanky mausoleums are therefore let at a minimum price, undercutting longer-established hotels.

This group is now portraying itself as the innocent victim of the disastrous policy. But the second report into the industry shows clearly just how self-serving that argument is. The dramatic fall-off in tourists staying in any hotel – new or long-established – is a damning indictment of the entire industry which, if it wants to survive, needs to listen to what visitors to this country have to say.

While there are many good hotels that have always offered value and the wonderful welcome that used to be such an integral part of the 'Irish experience', the prevailing perception by many, many holidaymakers is that we got too greedy. Rip-off Ireland and yes, a cute-hoorism that saw a way of making a buck out of a smile, turned its greedy face on tourists and the industry has now been bitten by the hand that fed.

'A Changed World For Irish Tourism', the report commissioned by the Irish Tourist Industry Confederation, shows just how much damage that rip-off culture has wreaked.

British visitors – our single most valuable and loyal customers – are turning away in droves, mainly because their experience here has not been good. A full one-third of UK visitors describe the value they were given in brutal terms. It is not just judged as a polite "average" or even vaguely non-committal "acceptable". Just plain "bad".

This has led to a word-of-mouth catastrophe in terms of visitor numbers. In 2003, 753,000 British people came here on holiday for the first time. Last year, it was down to 383,000. This year will see one million fewer British visitors than the peak year of 2006. And this despite the enormous goodwill towards Irish holidays that still prevails across the British media.

In his report on the factors that led to the banking collapse, the governor of the Central Bank, Professor Patrick Honohan, described how so many of the problems we now confront are self-inflicted, caused by a reckless blindness to the consequences of our get-rich-quick, money-for-nothing approach to economics and business.

The greed creed was all-pervasive throughout the hotel and tourism industry for many years: overpriced coffees and cakes, expensive minerals, hugely inflated extra costs for inferior services, poorly maintained rooms and bathrooms and at the height of it all, a 'céad-mile-fáilte' welcome provided by largely eastern European and Asian staff, many of whom were paid far less than their Irish counterparts, sometimes even exploited. At its worst, there was a real perception that if you moved you had to pay for it.

Today, the task of rebuilding has begun as our tourism authorities realise that every small detail of a holiday experience has to be fine-tuned, unique and value for money. A strategy over the Nama zombie hotels will have to be devised in order to stamp out unfair competition. As with all business in this country, hotels are also not unjustified in complaining about the costs they pay for state services and bureaucracy.

But there is no point in Fáilte Ireland going back to Britain, America or Europe with masterly advertising and marketing campaigns if the holiday that visitors have when they get here is over-priced and under-friendly.

Last week, Boeing launched its long-delayed 787 Dreamliner, the larger, lighter aeroplane which will herald the era of low-cost long-haul flights, making the world ever more accessible and, from the Irish hotelier's viewpoint, even more competitive.

How does Ireland compete with that if we don't rediscover the genuine warmth and personal welcome that in the old days you couldn't buy because nobody had then tried to put a price on it?