Martin Cullen (Waterford, Fianna Fail)

In the first instance, I am very much aware of the issue, as is the Government and the Minister for Finance. There is an issue here for NAMA because undoubtedly there is distortion. Some properties are clearly not viable, without mentioning any specifically, but we all know where they are. They are distorting the market and are simply being kept open to turn some money over, which is having a negative impact on the competitive pricing that good hotels have been able to produce. If we look for a silver lining, one of the effects of recession is that the cost base is reducing in Ireland. That had to happen, since there is no question but that we had priced ourselves out of the market. Clearly, what is happening now is driving down costs.

However, there is a difference between hotels where costs are being driven down to what are still commercial prices, albeit not at the same profit levels as before, and those that are clearly not viable. We must deal with that issue. There are four areas of concern: demand, costs, access to credit and over-capacity. We can deal with demand because that is our job through the tourism agencies. The Deputy will be aware that 900 German travel agents visited Ireland, which was a major success. For the first time, we are advertising on German television this year, so even with less money we are expanding what we can do. There is huge value to be obtained and that is just one example.

We are already seeing the benefit of lower costs across the spectrum, which are being received positively in other markets. Access to credit is an issue concerning working capital with the banking system as we go through the winter. I also accept that over-capacity is an issue. We are working to resolve these matters.

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