Olivia Mitchell (Dublin South, Fine Gael)

No matter what the Minister does, he will never fill all the hotel beds that have been built over a number of years.

On the Bacon report, which was the subject of my question, its conclusion was - I find this hard to accept - that we gave tax breaks to developers to open hotels and now we are to give them tax breaks to close them. Nevertheless, this raises a big issue and I have written to the Competition Authority in this regard, since I believe it completely distorts competition and gives rise to all types of issues regarding, I suspect, reckless trading and predatory pricing. Many of the tax incentivised hotels, as the Minister knows, were never viable from the day they opened. I am getting reports almost every day from people who genuinely know what is going on that, nonetheless, the banks are pouring working capital into these hotels. On the other hand, those hotels that are viable, with substantial debt, cannot get working capital. This is a very real issue and I raise it only to ascertain whether there is anything the Minister can do. Simply talking to the hotels and sending marketing people to the USA is not going to cut it. We are going to have to do something because the existing infrastructure will be closed down if we wait for NAMA.

The real danger is that, when NAMA takes over these loans, it will do the same thing because there is nothing in its business plan to suggest it will go after non-performing loans. What can the Minister do?

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