Martin Cullen (Waterford, Fianna Fail)

I propose to take Questions Nos. 6, 16, 23, 25 and 34 together.

In response to Parliamentary Question No. 3, I outlined the tourism performance so far this year. There is no doubt that the period to date in 2009 has been very difficult for tourism globally which has been reflected in overseas visitor numbers to Ireland. There have been significant declines in GDP, personal spending and consumer confidence across all our major source markets which, combined with unfavourable exchange rate movements, have had a negative impact on the numbers of overseas tourists.

In this context, through regular contact with the key industry representative groups, I am fully aware of the many issues affecting the hotel and catering industry, including the issues of costs and competitiveness. Managing costs will be key for tourism businesses to survive the current downturn and Fáilte Ireland has implemented a range of measures to help the tourism industry to address costs and competitiveness.

In particular, they have refocused their programmes to meet the enterprise support needs of businesses in the tourism sector in the current difficult climate. In 2009 Fáilte Ireland will be investing almost €6 million in the form of direct supports and advice for tourism enterprises. The industry is responding well to the initiatives and the take-up on the programmes is very positive.

I regularly discuss costs and competitiveness issues affecting tourism with my colleagues both at Cabinet and bilaterally. In this regard, my colleague, the Minister for the Environment, Heritage and Local Government, specifically asked local authorities to again exercise restraint in setting any increases in commercial rates and local charges for 2009, in order to support competitiveness in the economy, nationally and locally.

Local authorities responded positively to this request and there was only a marginal average increase in rates across the country of 1.15% in 2009, significantly lower than previous years. A number of local authorities decreased rate levels and some others did not increase them. While I would like to see rates on business drop across the country, I recognise the genuine funding needs of local authorities. In the medium term, the broadening of the revenue base, particularly at local level, presents opportunities to relieve the burden on tourism and other businesses.

I am also glad to see that the changes I called for in Sunday pay rates in the hotel and catering sectors are now taking place. As a result, the cost in those sectors of labour on Sundays nationally will now be at time and a third as agreed through the JLC process. Given the high labour input in the tourism industry these important changes should have a positive impact.

Proposals have been received from the Irish Hotels Federation to alleviate the difficulties being faced by this sector of the tourism industry. The proposals cannot be considered in isolation and will be assessed in the context of policy responses for the industry as a whole as well as the general economy and the forthcoming budget.

In that regard, I am aware that Fáilte Ireland is working very closely with the Irish Hotels Federation on a study on hotel room capacity. This report will clearly have a role to play in presenting new policy options for this important part of the tourism industry.

With regard to working capital, I met representatives of all the banks to impress on them the need for appropriate lines of credit to be available to the tourism and hospitality sector, in particular as we face into the autumn and winter period, which is a very challenging time when working capital is required by many in the tourism sector. To assist the tourism sector through this current difficult period, an extensive range of marketing, product development, festival and sporting events, training and business supports are being rolled out by the tourism State agencies under the tourism services budget of the Department. For example, Tourism Ireland is keeping its marketing programmes for 2009 flexible and responsive. It front-loaded its campaigns across all markets to secure as much business as possible for the peak and shoulder season and has now intensified its tactical and co-operative marketing activity for the second half of the year with an €18 million autumn campaign.

On the domestic front, Fáilte Ireland committed to its largest ever campaign to promote home holidays in 2009, with in excess of €3 million being invested in a year-round marketing programme promoting awareness of, and interest in, taking a home break. As we already discussed, last week the Taoiseach and I launched the autumn initiative which is co-ordinated and implemented by Fáilte Ireland with funding from members of the tourism industry, and is intended to boost business between now and the end of the year.

In response to Priority Question No. 3 I outlined the current state of play on the work of the tourism renewal group whose report I expect shortly. The industry deserves great credit for its commitment to quality and value for money in responding to the current challenging economic conditions through more flexible pricing and offering special value offers and packages. I am confident that, with the support of the agencies, the tourism sector has the capacity to manage the current cyclical slowdown and that, looking further ahead, the renewal group's review will help the sector to return to sustainable growth in the medium term.

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