Martin Cullen (Waterford, Fianna Fail)

As we all know, the hotel sector generally had a difficult trading year in 2009. Declines in personal spending and consumer confidence and unfavourable exchange rates across our major source markets had a significant impact on the numbers of overseas and domestic tourists staying in Irish hotels. In this context, my officials and I are in frequent contact with individual hoteliers and the Irish Hotels Federation, IHF, and are well aware of their concerns and priorities. I am in regular contact with the Minister for Finance and the Tánaiste and Minister for Enterprise, Trade and Employment about the issues facing the sector and there are also frequent contacts at official level.

As a result of such contacts, budget 2010 incorporated a range of measures to renew tourism. These provide for an overall increase in funding levels for tourism services, including the maintenance in real terms of funding for the tourism marketing fund and a trebling of the funds for tourism product development. In addition, a new rail travel initiative aimed at senior citizens from abroad and a reduction in excise duty on alcohol products and VAT will also benefit the sector. I should point out that the IHF welcomed the strong acknowledgement by the Government of the important role of tourism in the economy as well as the specific measures I have just outlined.

I am keenly aware that labour now represents over 40% of hotel costs. I welcome the recent changes in Sunday pay rates in the hotel and catering sectors. I also welcome the recent announcement by the Minister of State with responsibility for labour affairs that he will propose an "inability to pay clause" in the Industrial Relations (Amendment) Bill. This measure will assist hotels and other businesses facing substantial challenges to stay in businessand safeguard jobs. The inclusion of tourism in the employment subsidy scheme and the work of the credit supply steering group are also positive developments for the sector and have been welcomed by the IHF. All of these measures had been the subject of prior discussion between the Tánaiste and me.

As the Bacon report clearly indicates, tackling the overcapacity that undoubtedly exists in the hotel sector is a complex matter and ideally requires a market response over time. I am conscious of the difficulties that hotels and the tourism sector face in the current economic climate. It is my intention, together with that of my Department and the tourism State agencies, to continue to work with the industry to assist the sector to manage its way through these difficulties, be it in stimulating demand, helping to address costs and productivity or securing access to credit. The Deputy may rest assured that I will continue to raise those issues that affect the industry bilaterally with my ministerial colleagues and at the Cabinet table.

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