Mary Hanafin (Dún Laoghaire, Fianna Fail)

As I informed the House previously, I received a number of representations from the car rental industry throughout 2010 seeking support on the basis that it was required to provide additional car hire capacity for tourists. The matter was also raised with me at meetings with other tourism interests in the early part of the year. The concerns expressed to me related mainly to the availability of automatic transmission cars in the traditional summer peak season, chiefly with the North American market in mind.

From a tourism perspective our main concern is the availability of cars and the price consumers have to pay. In that regard, my Department and the tourism agencies monitored the situation closely with regard to its possible impact on visitors from overseas. Although I received representations urging Government intervention during 2010, I also received a number of approaches, both from within the car hire industry and the wider tourism sector, against such a course of action. In these cases, the view was that the potential shortages would not be as extensive as suggested and the market should take its course.

As part of our monitoring exercise, my Department conducted a number of web-based surveys of car hire throughout the year. Our conclusion and that of the tourism agencies was that the availability of cars in 2010 was such that it did not warrant a Government intervention to ensure an adequate supply for tourists and I am happy to advise the House that this proved to be the case. The tourism agencies have since advised me that there were very few shortages in 2010. There was some pressure during the peak two weeks of the 2010 season leading to increased prices but these were not enough to cause major concern and intervention during the year could not have been justified.

I am planning to meet the Car Rental Council of Ireland to discuss the sector and its budget submission to the Minister for Finance in the near future. I will continue to consult the Minister for Finance regarding the options open to Government if State intervention is considered necessary. For State intervention to be warranted there would have to be clear evidence of market failure and the prospect that any intervention would result in incremental hire vehicles coming on to the market, and remaining in place, to deal with potential peak demand in 2011 and later years. It is too early yet to say if shortages might arise in 2011 but I will continue to engage with the sector and monitor developments closely.

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