What is the secret of Cork's tourism success?

Now, as Dubliners' spirits collapse under the weight of developers' debts, the city is enduring the ignominy of being upstaged by the second capital. Cork, the only Irish destination to make the list, has emerged from Dublin's shadow as a "fantastic destination in its own right".

The guidebook gushes: "Cork is at the top of its game right now: sophisticated, vibrant and diverse, while still retaining its friendliness, relaxed charm and quick-fire wit."

There was plenty of the latter on display last week on the People's Republic of Cork website. "I heard the writer of the guide is from Knocknaheeny," one contributor quipped. Another, in the playful but boastful manner often displayed by residents of the "real capital", declared himself glad "that others are finally realising that we are special".

So what exactly is the city's secret and, should the rest of the country have a good look at Langerland and - whisper it - maybe even take some notes?

"IS it a complex or have we been persecuted? That's the question," says Dara Murphy, Cork's lord mayor. "We have a couple of chips neatly on our shoulders here and we'd be livid if anyone took them off us. But there has been reason to feel a little bit aggrieved over the years. Now we're finally getting recognition for what we've achieved."

Since a large-scale drainage scheme was completed some years back, the city has never looked so good. A facelift during the boom didn't erase any character, the streets are congestion free, and the unhurried pace of a city where people work to live as opposed to the other way round has been retained.

Murphy says the natives have done all this themselves. "There has always been a rebellious streak down here - that if we don't do it, it won't get done," he says. "Maybe that's helping us now in the recession. That independence and remoteness didn't serve us well in the boom times, in that we didn't get the infrastructure spend of Dublin, but maybe now it is helping us."

While retailers south of the M1 are ruing the fact that the motorway has made crossborder shopping trips easier, Cork has no worries on that front. The city is too far away from Northern Ireland and its sterling shops, which gives its retailers a clear advantage.

O'Callaghan Properties is putting the final touches to Opera Lane, Cork's latest retail development. Running from the main shopping drag of St Patrick's Street to the Opera House, it adds about 200,000 sq ft to the existing 1m sq ft of retail space. H&M, the Swedish retailer, is already open for business there. By Christmas, 80% of the space will be occupied. Boots will open its largest Irish store there and Gap will also have an outlet. About 1,200 jobs are being created.

Because of the downturn, the 61 apartments above the shopping centre are being rented rather than sold, but even at €1,200 a month for a two-bed, most have already gone.

Paula Lenihan, the editor of Cork-based RSVP magazine and Prendeville's wife, claims the city didn't get carried away with itself during the Celtic tiger years. Restaurants, she points out, never became dependent on the corporate market in the way that Dublin's did. Pubs didn't go down the VIP route.

"There's much more mixing socially, and fewer celebrities," she says. "We don't really have those types who were on some reality show years ago. If we have celebrities at all, they are the Munster rugby players and the local GAA stars."

Conspicuous consumption was absent too, she reckons. "If you went into Brown Thomas in Cork at the height of the boom, you wouldn't find the same stuff you'd get in the Grafton Street branch. There might be the odd high-priced handbag but that was it."

Paul Montgomery owns several pubs and nightclubs in Cork, all of which he says are holding up well. He's also involved in Winter's Bar and Parker Brown's nightclub in the Dundrum Town Centre in Dublin. "I see about a 20% drop in the Dundrum trade but we're doing okay here," he says.

"We've dropped a bit on the food side, that's probably down about 10-15%. People are coming out later. I'd say the early trade has dropped off but we're picking up on late-night trade."

He believes Cork is also tapping into the gay scene in a way that has previously been the preserve of Dublin. In August he opened a gay bar on Cork's main strip, Washington Street, and believes the city is "fast becoming the gay capital of Ireland - there's a really strong scene here".

In Lonely Planet, University College Cork is praised for providing crackling, youthful energy, but the compactness of the city, Montgomery says, is also a plus. "We also get a lot of people who live further out, in the smaller towns around Cork, who'll come up and hit the hotspots for the night," he says. "Everything's within walking distance here. It all makes for a pretty down-to-earth place."

JULIA is a new arrival in Cork and best represents the spirit of the city in the recession. She's a large blue-and-white ferry purchased by a consortium of local businesses, and currently floats on the Lee. Next March she will restore the service between Cork and Swansea, bringing tourists to the area. The ferry service operated until 2006 and its absence since then has been felt by a wide cross-section of local businesses.

Tom Barrett, chief executive of Fastnet, the company set up to operate the service, admits that the €6m cost has yet to be raised. About €2.6m is in the bag, mostly in €10,000 dollops from syndicates of small businesses such as taxi companies and hotels. "I think there were about 500 companies in all who made contributions," he says.

Fastnet is now selling corporate bonds for €50,000. "The new service will make such a difference here, especially after the Lonely Planet review," says Barrett. "At the moment we're pitching to people in Dublin who have a strong Cork connection."

Cork's docklands area, once home to the long-defunct Ford and Dunlop factories, has been earmarked for development. The city is waiting for various infrastructure projects to be approved first, including two bridges, costing €60m-€80m. The plan is to create 25,000 residential units and 27,000 jobs over 20 years. According to the lord mayor, such is the level of frustration among developers - most of the land is in private hands - that it has been suggested one might build a bridge in lieu of development levies.

While some of the talk is optimistic, Cork does have some genuine advantages. One of the few industries not affected by the recession is the pharmaceutical sector. Half of the 25,000 people employed nationally are based in Ringaskiddy, close to the city. These secure jobs lead to indirect employment for about another 12,500.

BUT lest the city get carried away with itself, there are signs that the merchant princes are not infallible. The Elysian apartment complex, the largest residential building in Ireland, rises majestically over the Lee in the city centre. Four months after the 17-storey complex went on sale, just one person has taken up residence in one of its 39 penthouses, which range in price from €1.4m to €2m. Most Cork natives have been happy to boast about having Ireland's tallest building, but nowadays they're keen to say that it is right to keep some projects on a smaller scale.

"All right, the Elysian units aren't selling but I think the apartments will sell down the line," says Murphy. "Compared with the white elephants in Dublin right now, it's in a whole different league."

Mark Hopkins, who runs a PR company in the city, believes that sport, in his case both rugby and GAA, forms bonds across all social classes throughout the Cork region.

"It would be wrong to say we're not being hit here as badly as everyone else," he says. "But we have a strong sense of identity. It's such a small place really, we all know each other. I think that will be a real plus in facing whatever we're facing."

According to Hopkins, Cork has never seen the same mania about getting on the property ladder as Dublin. House prices in Cork rose, but not to the same spike as in the capital.

That said, it's not all quite as "fantastic" as the Lonely Guide suggests. Unemployment in Cork is running at 15%. Negative equity is as prevalent as elsewhere and there are estates around satellite towns which lie empty and are likely to stay that way.

Prendeville suggests that the outburst of positivity last week on his radio show may be a case of desperate people clutching at straws. But as Murphy puts it: "There's a huge appetite for positivity now and I don't think that would be unique to Cork. This Lonely Planet thing, it's a little light at the end of the tunnel."