Mr. Tim Fenn:

I thank the committee for inviting the Irish Hotels Federation, IHF, to address it. I am the chief executive of the IHF and I am joined by Mr. Michael Vaughan, our president. The Irish Hotels Federation, founded in 1937, is the national organisation of the hotel and guesthouse industry in Ireland and is a key stakeholder in Irish tourism. Tourism is Ireland’s largest indigenous industry and provides an estimated 196,000 jobs, equivalent to 11% of total employment in the country. With more than 50,000 people directly employed by hotels and guesthouses in Ireland, the hotel sector has a critical role to play in job creation and the recovery of the wider economy. We welcome the announcement by the Minister, Deputy Varadkar, that a tourism policy review will commence later in the year. We recommend that this be integrated with national aviation policy in terms of greater air connectivity, and policies affecting our national food brand.

The federation identifies the following key challenges facing Irish tourism: effective tourism product development and the marketing of Ireland abroad; the restoration of financial sustainability to the Irish hotel sector; greater cost competitiveness within the economy; and the restoration of vocational and craft training structures to the sector. The Irish Hotels Federation collaborates with both Fáilte Ireland and Tourism Ireland in the areas of product development, marketing, quality and standards, training, and registration and classification. The federation believes it is vital to maintain the real level of funding for Fáilte Ireland and Tourism Ireland’s marketing budgets, including a specific budget for special events such as last year’s Emerald Isle Classic, which was an enormous success. It is also important that the Government maintains the tourism capital expenditure programme and continues to support Fáilte Ireland’s strategy to develop new experiential products such as the Wild Atlantic Way, Waterford’s Viking Triangle and the Great Western Greenway in County Mayo.

While tourism business levels have increased in some urban areas since the beginning of 2012, performance has been poor for hotels and guesthouses in many parts of the country, resulting in a two-tier recovery in the market. Specific long-term marketing measures are required therefore to address this imbalance. In particular, we would like to see a review of the regional tourism structures with a view to improving engagement between the various stakeholders and promoting better co-ordination and leverage in the development of new experiential products while ensuring maximum efficiency in use of resources.

Notwithstanding the requirement to achieve stronger recovery in the Great Britain market, we support Tourism Ireland in its strategy to target mainland Europe as an increasingly important market for tourism that delivers more holidaymakers and revenue than Great Britain. We also support Tourism Ireland’s strategy to pursue improved combined UK and Ireland visa access, which has the potential to deliver additional growth from emerging tourism markets such as India and China.

The onset of the debt crisis in Ireland saw a dramatic deterioration in profitability within the hotel sector. A large number of hotels have gone into receivership or come under bank control. It is the federation’s policy to reverse this trend and to restore ownership to those who have a long-term interest in the industry. With that in mind, last year the federation commissioned an independent report to identify and evaluate proposals to restore financial sustainability to the industry by attracting new equity investment. The report was carried out by the economist, Dr. Alan Ahearne, of NUI Galway and it explored how debt restructuring could allow hotels to operate on a long-term sustainable basis. The federation subsequently hosted an investment conference in October 2012 to promote investment in our sector, and this was attended by the Minister, Deputy Varadkar. The IHF made various submissions to Government, and the employment and investment incentive scheme was extended in the Finance Act 2013 to include registered hotels, guesthouses and other tourism traffic undertakings. We are in the process of rolling out workshops throughout the country to promote the scheme as part of our debt restructuring agenda.

The federation maintains that initiatives currently being explored to increase the availability of equity capital to the hotel sector will help put viable and otherwise viable hotels on a more stable footing.