Mr. Shaun Quinn:

There is no doubt the bed and breakfast sector is under pressure. There are a number of reasons for this. Ireland has some of the most competitive hotel stock in Europe - which is a plus - but this can have a knock-on effect on other competing sectors. We also know that many people entered the sector for other reasons at the time, including to increase their incomes. There is a rate of attrition in the sector at present because people are either leaving it or retiring and new entrants are not necessarily coming in. It is a very important aspect our product. It is part of our unique selling point, particularly as not all countries have such a sector. Not every tourist stays every night in a bed and breakfast but it can be part of his or her itinerary. From our perspective it is important that the sector is nurtured and encouraged to expand. We spend a great deal of time and resources working with those in the sector. The one positive I would take from the presentations made to the committee this morning is that the primary markets for the bed and breakfast sector are continental Europe and North America. These markets are growing and the sector is no longer as dependent on the home market or the bridge market, which are soft. The markets for the sector are turning and we are hoping to receive a lift in that regard.

Reference was made to repeating the mistakes of the past by investing in new hotels. Internally, we discuss the concepts of primary demand and derived demand. In the context of primary demand, people come here for a reason. They come here for the experience and to visit the various attractions. They do not come here to sleep or to eat. Looking back, I accept that the industry may have placed too much emphasis on derived demand as opposed to primary demand. The point we are making is that, going forward, greater emphasis must be placed on the reasons people should visit Ireland in the first instance as opposed to the necessary things they need to do when they arrive here.

We have responsibility in respect of the home market. The point made in this regard is very important and we did not cover it. Irish people take a total of approximately 8 million holiday trips in Ireland. That almost equates to the number taken by tourists from overseas. In terms of volume, they are important. They might not spend as much as those from abroad but they are important. If fewer Irish people take holidays abroad and instead remain at home, this constitutes a form of import substitution. Again, this is important. We put in place a year-long programme each year. This programme includes Northern Ireland, which we target explicitly in order to attract tourists. The programme probably has been more aggressive this year than has been the case in previous years. This is a recognition of the value which is to be had in the industry.

In the context of the VAT reduction, I very much support the sentiment to the effect that the case in this regard must be evidence-based. I completely agree with that. We are conducting some analysis ourselves in this regard at present. It has been of extraordinary benefit to the trade and I am sure the Irish Hotels Federation would support that view.

Deputy McLellan referred to duplication. In the interests of saving time earlier, I decided not to outline either our functions or what we do. However, the latter is very clear. Fáilte Ireland is a development authority which is primarily concerned with the tourism product in the context of the provision of services, building capacity and training people in the industry. We do not engage in international marketing, which is the job of Tourism Ireland. There is no duplication and our roles are very clear. I can understand, however, that the position can appear confusing from an outside perspective.