Truth be told, Santiago's seen better days as a fisherman. While younger competitors regularly bring their impressive catches into harbor, he's stuck in the middle of a long losing streak that's lasted for several months.

To be precise, it's been eighty-four long days since Santiago caught a fish, so can only imagine just how excited when he spots a nice big marlin swimming alongside his skiff. Turning back the years, Santiago uses every remaining ounce of skill and strength that he possesses to catch this enormous fish and tie it to the side of his boat.

Unfortunately, by the time the old fisherman has returned to harbor, his prize catch has been stripped to the bone by sharks. This is ironic, to say the least. Santiago may have broken his streak of bad luck, but thanks to the sharks he's ended up with nothing to show for his heroic exertions out there in the ocean.

In that sense, Santiago has been both lucky and unlucky at the same time. He's lucky in that, even at his age, he's been able to land a very big fish. But he's also very unlucky in that his prize catch has been eaten by sharks, leaving him with nothing.

It’s easy to consider the old man’s return home as a kind of triumph—even though he lost his catch, the old man still retains his dignity and is seen by others as a kind of hero. Actually, the end of the book is a bit more ambiguous. While it is true the other fishermen are amazed at the size of the skeleton lashed to Santiago’s boat, it is also true Santiago has no interest in the remains of the fish—he gives away the head for fish bait, and gives the boy the fish’s bill. Ultimately, the only evidence of Santiago’s ordeal becomes trash floating in the harbor, waiting to go out with the tide. When tourists see the skeleton and ask what it is, it is telling that the answer is misunderstood:

“What’s that?” she asked a waiter and pointed to the long backbone of the great fish that was now just garbage waiting to go out with the tide.
“Tiburon,” the waiter said. “Shark.” He was meaning to explain what had happened.
“I didn’t know sharks had such handsome, beautifully formed tails.”
“I didn’t either,” her male companion said.

It’s only natural, I suppose, that the waiter cannot make himself understood: who could really understand or express the ordeal that brought that skeleton there? No one else, the boy included, can ever fully know what Santiago endured. But the final irony has to do with our desire as readers to assign a significance to Santiago’s struggle that Santiago himself does not see. When he sleeps at the end of the story, he does not dream of the fish or of his glorious battle, but of the lions he saw as a boy on a beach in Africa. Far from being the great hero, Santiago will, no doubt, wake up the next day and go fishing.

An additional irony (additional to the one pointed out by mwestwood above) comes in the observations made by a tourist couple in the closing passage of the novel. 

Sitting at the Terrace, the tourist spot the bones of the great fish that the old man, Santiago, caught and brought back (dead and decimated) to shore. They ask what it is and, failing to listen to the answer the waiter was prepared to give, conclude that the great dead fish is a shark. 

"I didn't know sharks had such handsome, beautifully formed tails." 

This line presents a number of ironies. First and most superficially, the tail is the most identifiable detail of the fish that Santiago has caught. The fish is a marlin, best known by its tail. Secondly, the marlin caught by Santiago was eaten by sharks and so is made unrecognizable by the very type of fish that the tourists mistakenly believe the marlin to be. 

The more substantial irony of this moment comes in the idea that Santiago's accomplishment of catching such a gorgeous and grand fish is not clearly acknowledged by these people who do, nonetheless, manage to see that the fist is in some ways impressive. 

Like Santiago himself, the fish is no longer identified or known for its greatest attributes though these attributes are still present. Santiago's strength of will prevails in his struggle with the great fish. For the fish, even the skeleton of the tail is enough to impress the tourists. 

A connection between Santiago and his great catch is thus ironically solidified by people who never even see Santiago. His prowess as a fisherman is proven by the observation made by the tourists as they see only an echo of the skills and strengths and significance of Santiago's epic fishing day. 

Santiago of The Old Man and the Sea is the consummate Hemingway code hero as he achieves true existential meaning in response to his spiritual failure. When he returns with nothing but the skeleton of the marlin that he has caught, Santiago yet has evidence of his skill as a fisherman. Therefore, although he has brought in nothing but the bones of the fish, Santiago has won back his respect from the other fishermen.

"He was eighteen feet from nose to tail" the fisherman who was measuring him called....

"What a fish it was," the proprietor said. "There has never been such a fish...."

So although the fish is destroyed, by its death it has retrieved dignity and spiritual fulfillment for Santiago. Exhausted and defeated, then, Santiago ironically is victorious. He is a man "defeated, but not destroyed" and when he sleeps, he dreams as he has done as a child--he dreams of the lions.