Mary Hanafin (Dún Laoghaire, Fianna Fail)

Yes. I wish to share time with Deputy Margaret Conlon.

I thank Deputy Upton for tabling this motion. The fact that we will discuss tourism for three hours will help bring the importance of tourism centre stage. I am genuinely delighted to have the opportunity to engage in a debate on an important industry to the economy, and not just in a general sense. The fact that it is in every community and village throughout the country makes it of particular value to communities throughout the island of Ireland.

The tourism and hospitality sector represented 4% of GNP last year, providing, if one includes the general hospitality and restaurant industry, up to 200,000 jobs and, as has been stated already, that is very valuable employment in these times. It also helped to generate €4 billion in foreign revenue earnings and generated in the order of €1.3 billion in tax earnings.

Last year was a very challenging year, and the first quarter of this year has been difficult and disappointing, largely because of circumstances outside our control. We had very bad weather in the early part of the year when people were unable to travel; the difference in the exchange rates for sterling and the dollar; poor economies throughout the world, not just in Ireland; and, to top it all, a volcano. However, those in the Irish tourism industry showed how resilient they are and, contrary to what Deputy Broughan said, they were the only people who responded with a visitor charter, which is a positive message to be sent out throughout the world. Fortunately, the volcano died and hopefully it will stay that way but it shows that the tourism industry has the ability to bounce back, even after such a difficult first few months.

The Government recognises that tourism is a vital export-oriented service industry. That was recognised in our framework for economic renewal, Building Ireland's Smart Economy.In further recognition of its important contribution to the economy, tourism was also among the areas focused on during the Global Irish Economic Forum in September 2009 and was the subject of some imaginative and challenging suggestions from the forum. Tourism was included also in the Taoiseach's recent speech on employment policy as one of the ten areas where the Government's economic renewal plan will ensure we generate the jobs we need.

One of the strengths of Irish tourism has been the robust policy framework developed for the sector since 2003, when the New Horizonsreport of the Tourism Review Group was published. That includes clearly defined implementation arrangements through the tourism State agencies and a strong partnership approach with the industry. In December 2008, to ensure the strategic framework for tourism development was able to respond to the rapidly changing economic and social environment, the then Minister for Arts, Sport and Tourism, Deputy Martin Cullen, established the tourism renewal group. The Minister asked it to review and, where appropriate, to renew the existing tourism strategy contained in the New Horizonsreport.

In 2009, the tourism renewal group conducted a detailed and inclusive examination of the tourism sector - both nationally and internationally - the existing strategic framework and key tourism-related issues. The group analysed the implications of its findings and agreed on key actions required to support the tourist industry and help it survive, recover and grow. The resulting report of the tourism renewal group, launched last October, set out tourism's contribution to Ireland's economic and social development and its prospects in a changed world, as well as a framework for action for tourism's survival, recovery and growth in the period to 2013. The report included five survival actions to minimise the impact of current challenges and nine recovery actions to set Irish tourism back on a growth path as the world economy recovers.

I welcome Deputy Upton's policy paper on tourism. Many of her recommendations reflect those contained in the report of the tourism renewal group. I happily agree with those, and many others, but all of the actions in the tourism renewal group report are being vigorously pursued by me as Minister, by my Department and the appropriate agencies - in co-operation, where relevant, with other Departments and bodies - with a particular focus initially on the survival actions.

In the meantime, Fáilte Ireland and Tourism Ireland have built in the relevant renewal group recommendations to their business and marketing plans for 2010. My Department is also working with a range of other organisations to develop opportunities to focus resources, achieve common objectives and maximise the impact on tourism. To ensure that the recommendations of the renewal group are implemented, the group suggested that a renewal implementation group - to include an independent chair and no more than four other members - be established but because I see the implementation of the recommendations as essential to tourism policy I intend to chair the group myself, the final composition of which I am currently settling.

Building on the framework for action, budget 2010 recognised the tourism and hospitality sector as a critical, labour-intensive sector and incorporated a range of measures to renew Irish tourism. The overall tourism services budget was increased by 3% to over €153 million, including the maintenance in real terms of funding for the tourism marketing fund, as recommended by the renewal group, and a trebling of the funds for tourism product development. In difficult times, when other Departments were making serious cuts, that shows the commitment of the Government to promoting and developing tourism.

Tourism was also included in a range of cross-cutting measures to support enterprises and jobs, including the employment subsidy scheme and the credit review scheme. Additional specific measures such as changes in alcohol excise duties and VAT, and the imaginative free rail travel initiative for senior citizens visiting Ireland, will also help the sector to recover. In regard to the free travel initiative, I am pleased to advise the House that since its launch on 16 March last, over 4,500 Golden Trekker passes have been issued to overseas visitors.

As the House is aware, we have been experiencing the impact of an international recession of unsurpassed severity. Every major economy, including our key source tourism markets, is suffering. In our own case, the position was exacerbated by the challenges in our domestic economy and adverse exchange rates, although recent currency movements will operate to our advantage in attracting visitors from the Great Britain and United States markets.

Tourism worldwide saw a significant downturn in the second half of 2008, which continued into 2009, due to the global economic slowdown and loss of consumer confidence. There were just under 7 million overseas visitors to Ireland during that year. That figure represented a drop of just under 12% compared to 2008. Outward trips from Great Britain were particularly affected, with the euro-sterling exchange rate making it extremely challenging to attract visitors to Ireland, and eurozone destinations generally. I understand that the number of people from Great Britain travelling abroad is back to 2001 levels. However, to put our performance in context, OECD figures suggest there was a higher reduction in visitor numbers to Malta, Hungary, Cyprus, Greece and Finland, while the drop reported in France, Portugal and Spain was between 8% and 12%.

In common with many other businesses in Ireland, tourism businesses are experiencing difficulties with regard to capacity, costs and credit supply, exacerbated by lower visitor numbers. Some of those problems will need to be addressed by the tourism industry itself. Others are being addressed generally by the Government, for example, through NAMA and issues around the supply of credit to businesses generally. The Government will continue to work with the industry to help the sector manage its way through these difficulties, whether in stimulating demand, helping to address costs and productivity or securing access to credit.

It is clear that tackling the over-capacity that undoubtedly exists in the hotel sector at present is complex and, ideally, requires a market led response over time. The year 2010 is likely to be another tough year in the hotel sector, with further adjustments taking place as the market responds to excess room supply. This process will gain further momentum in the coming months as more banks seek to clean up their balance sheets and dispose of under-performing loans. These market-led adjustments are necessary, however, to restore some level of equilibrium to the hotel market. NAMA will become a key player in the hotel sector as more hotel-related loans migrate to the agency. Through the Minister for Finance, I will be encouraging NAMA to take a strategic approach to the sector, build up its expertise in this area and consult with sectoral interests, including the Irish Hotels Federation.

Credit availability also remains a real difficulty across the economy, including for the hotel sector. The Government's strategy for NAMA is centred on the goal of restoring a stable and functioning banking system. As part of this process a credit appeals system has been established which allows small and medium-sized enterprises, including those from the tourism industry, to appeal when a credit application has been refused. This will provide a valuable independent recourse for businesses in their dealings with banks.

The Government is taking initiatives to improve costs such as labour, local authority rates and charges, and energy. For example, securing a reduction in electricity and energy prices has improved our relative competitive position in this area. That consumer prices in Ireland have now fallen back to 2006 levels shows that we are responding flexibly to the crisis. This has been recognised by the European Commission and on international markets, helping to restore confidence in the Irish economy.

I must also acknowledge the tourism industry itself has made great strides to reduce costs and increase productivity over the past two years. These are difficult adjustments but if we get our costs right, while also using the crisis to restructure and reinvent ourselves, we will return to a sustainable growth path. The offers currently available from accommodation and food providers have never been as attractive and go a long way to addressing concerns expressed on this front from overseas and domestic holidaymakers in recent years.

Ireland's ability to compete in the international arena will depend on maintaining and enhancing competitiveness, a major issue for Irish tourism as it is for the economy. In addressing that issue, it is important to bear in mind that competitiveness is about more than price and costs. The tourism agencies continue to monitor Ireland's competitiveness as a tourism destination and I am encouraging them to assist the industry in responding to changing conditions as appropriate.

Despite the global economic downturn, millions of people across the world will still take holidays this year. It is also worth noting while the bad weather and volcanic ash led to significant reductions in visitor numbers in the early months of this year, 60% of annual business is accounted for between the months of May and September. The industry and the tourism agencies are fighting hard for every bit of business for the summer and remainder of the year. Funding is now arranged seasonally, with separate summer and autumn marketing campaigns.

Several eurozone economies are coming out of recession and these are important source markets for Irish tourism. Tourism Ireland will be focusing on those major markets that are likely to deliver immediate returns this year including Great Britain, Germany and the US, as research has shown these markets as our best prospects.

Tourism Ireland is the North-South body responsible for marketing the island of Ireland overseas as a holiday destination. The objectives of Tourism Ireland's marketing strategy are to convince overseas consumers this is the best time to visit, to show them the great value available from industry partners and to demonstrate how easy it is to get to Ireland by air and sea. It is important we are able to market the island as a country at peace. It is to our benefit we can market it on a Thirty-two County basis.

We must position Ireland to take advantage of opportunities that will arise as the global economy stabilises. Tourism Ireland's commitment is to market through the challenges, work closely with industry partners and fight for every bit of business that can be won. I intend to personally support the marketing effort. Last week I was in Frankfurt, at the invitation of Tourism Ireland and had several trade and media engagements to support the push for business from the largest outbound tourism market in the world. I also intend going to London and the US before the summer break for short intensive engagements with the industry, tourism providers and media. There I will launch campaigns for the on-line 1901 census returns aimed at these important roots markets.

It is important too to plan for the future. Today, I had the pleasure of addressing over 100 tourism industry representatives who were in Dublin to participate in the Tourism Ireland innovation summit taking place in Farmleigh. This summit is designed to help Tourism Ireland to develop its corporate plan, covering 2011 to 2013, and to identify key themes that will be at the heart of future marketing strategies.

Tourism Ireland is engaged in a large tactical marketing programme across all major markets, communicating strong reasons to visit together with clear, price-led messages. New technologies are being utilised in this regard, with 35 websites in 14 languages in 27 different countries. Over €44 million of Exchequer funding has been provided to overseas marketing this year, which already included the largest ever promotional programme of activities to showcase Ireland during the St. Patrick's Day holiday and a recently launched €20 million summer promotion campaign.

On the domestic front, Fáilte Ireland is engaged in a new intensive campaign to promote holidaying at home this year, with a budget of €4 million. The new marketing campaign is rooted in extensive consumer research and consultation with the tourism industry and involves saturation coverage on television, radio, the print media and on-line.

We are supporting festivals and events around the country on the tourism and culture side. I commend those communities which organise events that take pride in their areas such as Abbeyleix, the heritage town, Abbeyshrule's Goldsmith Festival, and Dalkey's book festival. These local festivals celebrate the best of localities and boost their businesses. It is important we continue supporting all of these events.

A major bed and breakfast revitalisation programme has been rolled out by Fáilte Ireland, including a special new domestic publicity campaign highlighting a new classification system, the introduction of dedicated training courses and business supports and investment for development opportunities through local action groups. Fáilte Ireland is also boosting its promotion of business tourism. The opening in September of the new national conference centre in Dublin, to be known as Convention Centre Dublin, will further enhance our capacity to attract international events. Already there have been bookings for international law and pharmaceutical industry conferences.

Croke Park and the recently opened Aviva Stadium at Lansdowne Road are venues for sporting events which will enhance our attractiveness for sports tourism. The recent success of Graeme McDowell at the US Open and the success of Padraig Harrington is also a factor in this area. Such ambassadors, like Gabriel Byrne as cultural ambassador, freely give their time to promote Ireland and it must be acknowledged the impact they have on attracting people to visit Ireland.

The quality and value of the tourism product has improved dramatically over the past few years. Accommodation quality, particularly in the case of hotels, is among the highest in Europe. There are many more things to see and do and we have managed to maintain and build on our natural assets and resources. Visitors constantly express satisfaction rates of well over 90% for their stay here and almost all say they would recommend Ireland as a holiday location to their friends or relatives.

Fáilte Ireland is significantly boosting investment under its capital investment programme to improve and broaden the appeal of Ireland's portfolio of tourist attractions, activities and tourism-related infrastructure. There has been a particular emphasis over the past two years in improving our eco-friendly linear and looped walking and cycling routes. One can go into the heart of the country, be it Tinakilly or Duhallow, and find local communities, farmers in particular, being responsive to the need to develop walking routes. The Discover Ireland website highlights these amenities through on-line resources including maps.

Yesterday, I announced capital grant funding of €6.6 million for three tourism projects, the Dublin Writers' Museum, the Lee Valley project in Tralee and the New Ross Quay Board Walk in County Wexford. Funding of €9 million has also been approved for the Viking triangle project in Waterford. I congratulate all those involved in the reopening today of the House of Waterford Crystal visitor experience in the city.

The air travel tax was introduced in a difficult budgetary situation when cuts had to be made in areas such as social welfare, health and education, as I well know. The tax is an important source of revenue for the Exchequer. As Minister with responsibility for tourism, I would be concerned about any tax that might lead to a significant reduction in visitor numbers. Since taking up my new office, I have met several airlines to discuss their research and views on this issue in advance of the 2011 budgetary process.

As regards visa arrangements, I am keen to ensure that we capitalise on opportunities in new emerging tourism markets, such as India and China. I am aware competitive visa arrangements are an important element of winning business from these sources. I have already been in contact with my colleague, the Minister for Justice and Law Reform. We are holding discussions to see how these arrangements might be improved.

The Private Members' motion tabled also refers to the downward review of commercial rents. As Deputies will be aware, the Department of Justice and Law Reform has already overseen the enactment of legislation which prohibits upward only rent reviews in leases entered into on or after 28 February 2010. However, I understand that the advice received by the Minister for Justice and Law Reform from the Office of the Attorney General is that, from a constitutional perspective, it would be very problematic, if not impossible, to interfere with existing lease agreements. Nonetheless, I note that there is nothing to stop the parties to existing business leases from varying the terms of their contract and from agreeing to reduce the applicable rent, having regard to their individual circumstances and the realities of the market. It is foolish for a landlord to jeopardise his or her future rental income from a valued tenant by charging that tenant an inflated rental price in the current environment when many businesses are finding it difficult to meet their costs.

Broadband is being spread throughout the country under the national broadband scheme and this could bring major benefits for the tourism industry.

Fáilte Ireland is working closely with tourism businesses throughout Ireland, supporting enterprises and helping them to achieve real cost savings and efficiencies. Business supports are aimed at assisting key tourism businesses to increase their international customer base, to better manage their cost base, to improve overall performance and marketing, especially on the web, and to sustain employment levels.

During 2009, Fáilte Ireland provided a range of training and business supports directly to almost 3,000 individual tourism businesses. In 2010, it will invest more than €11 million in the form of direct supports and advice for tourism enterprises.

The partnerships between Fáilte Ireland, the industry, Tourism Ireland and other major agencies such as Bord Bia are crucial for the success of the industry. While we recognise that these are extraordinarily challenging and difficult times and that tourism is not immune, I am confident that our tourism industry, which is resilient, will rise to the challenge. I am also confident that with the ongoing development of the product we have to offer and through highlighting the best of what we have to offer and marketing it well to the international market, we can ensure tourism will be one of the few major indigenous industries to help us to continue to maintain employment, to create additional employment and to attract visitors to share in this country, which we are proud to represent.

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