Mr. Michael Cawley:

I thank Senator O'Mahony for his good wishes. On the last point, I firmly believe that direct access into the regions is an important key ingredient and it is not the only one. There is a review of the regional airports taking place at present. It is critically important that Ireland West Airport Knock, Connacht's international airport, Kerry Airport, Shannon Airport and Cork Airport are all supported. They should not just be considered in terms of their own profit and loss accounts because many of them need support. I do not think that Shannon Airport does but I am not sure of the economics involved. Ireland West Airport Knock and Kerry Airport need support. They have very onerous safety regulations, for example, that they must adhere to, which are appropriate and necessary, but they can be funded off a much higher passenger base than Knock has. I am very well acquainted with the airport at Knock from my previous work. The airport has successfully grown its passenger numbers to almost 800,000 and has done so progressively every year, and through the recession, over the past 15 years. The airport has done a phenomenal job. The real economic contribution made by the airport does not just show in its accounts but in the social and economic benefits that it has brought to the whole western seaboard. Shannon Airport is the biggest airport on the Wild Atlantic Way but the airport at Knock would claim to be an important access point, as does Kerry Airport, for the Wild Atlantic Way. The same applies to Kerry Airport. It is smaller but, in a niche way, it is very important for the region. I hope that officials from the Department of Transport, Tourism and Sport would decide in favour of maintaining these airports and consider the global contribution that they make to the whole western seaboard.

Access is not the only issue. We did not think about one consequence of a better road infrastructure, which is that people can travel to and from Dublin to the regions much quicker and make a return journey in just one day. The development benefits business people but it is a double-edged sword for tourism. Fáilte Ireland, apart from promoting access, wants to reverse the trend that Ms Hynes talked about, whereby 85% of all the existing air traffic that comes into the country comes through Dublin, and increase air traffic to the regions. Allied to that we need to build up a series of attractions, of which Kilkenny is a very good example. Every year, as many as 300,000 people visit Kilkenny Castle , of whom 25,000 of them visit the Main Street of the city, which is 100 yd. away. They all get back on their buses to travel back to Dublin. We need a package of attractions. We are working not just in Kilkenny city but in the general region, which includes Mount Juliet and so on, to get people to stay for at least a day if not more and, crucially, to stay overnight. We also are working to have night entertainment and night activities. We are working in a number of critical towns and cities that we have selected. We have called them visitor experience development plans, which we are heavily subventing with both money and management expertise to attract people with premises and encourage them to open for longer in the season and collaborate. There was a view in this country, particularly in the tourism sector, that one kept one's business quiet and did not collaborate with the guy down the road. In fact, cross-selling is critical to the success of a business and if a person cross-sells to another person, then somebody else will cross-sell in return. A big part of our efforts is securing collaboration between hotels, restaurants and other activities and for people to cross-sell their products. Cross-selling benefits everyone in terms of business and in our experience, the general pot of revenue increases as a result. That is a very important element on which we are working.

It is a far riskier thing to fly into the regions from a continental or British destination than it is to fly into the regions. The costs are the same in Cork, for example, so why would anyone fly to Cork rather than Dublin, other than one has spare capacity after one has finished giving Dublin all of one's business? We need to discriminate in terms of the economics of these airports because they are critical access points, as well as what we are doing in Fáilte Ireland where we are building up the experience, activities and things to do in those regions. That is the whole theory behind Ireland's Ancient East initiative where are trying to build up modules and nodes of activity. Waterford is another region. Wicklow has a phenomenal line of options that range from Powerscourt to Glendalough. Our biggest capital project, over the next few years, is with Coillte and we will develop Rathdrum where Charles Stewart Parnell's grandfather planted the first commercial forest in the country. Of course, the whole story of Parnell and Avondale House is central to that. What is the problem? We have found that all of the hotels in Wicklow are full and there are none other than in north Wicklow. Therefore, we need people to develop accommodation in the area. Of course the walking attractions in Wicklow are second to none. We need a co-ordinated approach and Fáilte Ireland is trying to bring all of the parties concerned together to give private investment reasons to invest in providing accommodation in the area and putting attractions in the likes of Kilkenny and so on where there is plenty of accommodation, as it happens. The problems differ from area to area.

Conferences were specifically mentioned. We have been so successful with creating conference business that the National Conference Centre in Dublin is full to capacity. Killarney is really the only other area that can house a large conference facility. That was the hotel problem that occurred two weeks ago because Google had 6,000 people in the city. A conference is not just about a large hotel. Activities must be arranged for spouses or partners who accompany delegates. One also needs leisure activities and, typically, one needs a banquet to take place in a castle. In the UK people use their old houses and so on for such events. We have those but we do not have all of the packages together in one area. Let me outline one of the things that we are doing. We have €10 million available as part of our grant scheme specifically for developing a conference centre.

We have identified a number of places, including Limerick which is close to Shannon Airport, Bunratty Castle and a plethora of golf courses in places like Adare, Doonbeg and Castletroy. We lack a big venue and we want to try to develop it there. We are also looking at Killarney, Cork and Galway.

We need private investment, which we will strongly support from a financial and management perspective. We run the conference centre here in Dublin and we think we have the right formula. We are inundated with requests and are turning away business in this area. We have a fantastic ambassador programme of professionals in their area. Two years ago the biggest conference we had was for 7,000 flower arrangers. We have also had oncologists and botanists. The aviation conferences here in January are legendary. The two of them book out the whole of Dublin which is fantastic. We need more of that kind of stuff but there are logjams in the system.

The Senator also asked about VAT. In the past two years Ireland has gone down in the international value-for-money ratings. It is crucial that we keep our eye on that. The Minister for Finance, Deputy Donohoe, is a former Minister for Transport, Tourism and Sport and he knows what the challenges are. There is a split economy between those doing exceptionally well out of tourism and can afford to pay the higher rate, and those who cannot. It is impossible to split a national tax between the regions and Dublin. Hotel revenue per available room, RevPAR, which looks at a combination of the revenue and the occupancy is a key measure. Dublin hotels have had high single or double-digit growth for each of the past five years. We are bringing an increasing number of hotels on board which is the solution to that. I am pleased to report that increase with more employment being created.

Certain parts of the regions are doing well but in many parts the VAT issue has been a great difficulty in the current year. They are incapable of increasing their prices and have had to absorb the cost. In retrospect it has been a difficult year to do it with the difficulties in Shannon. Even though Dublin has grown, it has not grown by as much as we expected because of the problems with the Boeing 737 MAX aircraft and the cancellations by Norwegian Air. While we were very grateful to get the reduction in the VAT which was a great help to the industry, we recognise the Exchequer's need. While certain businesses in the regions have been able to absorb it, it has been a difficult year for them to absorb it.

Local authority charges and insurance premiums are further problems for them. Insurance is a particular problem for activities providers. We are putting together a group scheme for activities providers so that they can buy insurance together. I constantly meet people who have one or two employees and get demand for another activity. They may do kayaking, mounting climbing, walking or cycling. They get demand for another level of activity and when they seek insurance they find it is prohibitive meaning they cannot expand. Working with the umbrella group for activity providers we will try to approach insurers to get certainty and stability of price for them. That is a big issue that has come on the horizon in the past 18 months or two years.

The VAT is a mixed bag and-----