Jimmy Deenihan (Kerry North, Fine Gael)
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Question 64: To ask the Minister for Arts, Sport and Tourism if he will request Tourism Ireland to launch a major marketing plan for the Shannon and western region following the bilateral open skies agreement between the USA and Europe; and if he will make a statement on the matter. [12115/07]

John O'Donoghue (Kerry South, Fianna Fail)
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I welcome the advent of the open skies agreement, which has long been an objective of Irish tourism policy. Following on the open skies deal, Aer Lingus has announced new services to San Francisco, Orlando and Washington Dulles. These additional routes have the potential to benefit Irish tourism and business links across the country. The new open skies regime will, of course, see the phasing out of the Shannon stopover policy. This is a challenge for Shannon but it is also an opportunity. If Shannon is to successfully rise to that challenge, a number of issues will need to be addressed.

The cost base of the airport is too high and if it is not tackled, Shannon will not be able to meet the challenge or exploit the opportunities presented by open skies. In that context, it is encouraging to note recent positive developments on a severance and flexibility package for staff.

The airport will need to look beyond the north Atlantic and look at the opportunities presented by routes to Britain and mainland Europe, building on recent positive experience in that regard. It is critical that visitors to the Shannon catchment area are provided with accessible routes and transport options. From a tourism perspective, it is essential that local interests work to enhance the range and quality of tourism product in the region, having regard to Fáilte Ireland's new product development strategies.

Tourism marketing will have optimum impact when the above elements are in place. A key aim of any tourism marketing campaign would be an integrated regional response with a particular focus on maintaining good flows of off-peak business. There have been demands for a special tourism marketing fund for Shannon but these must be tempered by realism. The House should note that the total tourism marketing fund for 2007 is €45 million and that Tourism Ireland would have spent less than €8 million in direct marketing in the USA during 2006 for the whole island.

My Department has considered the impact of open skies and has been in touch with the tourism agencies which are committed to working closely with Shannon development and the industry in delivering a response, and the Deputy can take it that there will be a response.

Any tourism marketing response must, in my view, be delivered by Tourism Ireland, focus on the wider Shannon catchment area, have regard to the new super regions marketing framework introduced in 2006 and, in so far as North America is concerned, conform to Tourism Ireland's new North American strategy.

I understand that my colleague the Minister for Transport, Deputy Cullen, will be bringing his draft economic and tourism development plan for Shannon to Cabinet very soon. That will provide an opportunity for Cabinet to discuss the nature of any response and the need for additional resources, if any.

Jimmy Deenihan (Kerry North, Fine Gael)
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I am sure the Minister agrees that Shannon Airport is critical to the future of both the Shannon region and the western seaboard. The Minister is aware that 70% of all transatlantic traffic drops off in Shannon. It is estimated by the Shannon marketing group that Shannon will lose at least 100,000 transatlantic tourists per year and I do not have to remind the Minister that at least 68% of all tourists disembarking from Shannon end up in County Kerry. The issue has major implications for that county as well.

Some 50% of US companies and investment is located in the Shannon region and the Shannon free zone has one of the biggest industrial parks in the country. One of the reasons US companies located in and around Shannon was the airport. There is a distinct possibility that we could lose this type of investment, which would be another major blow to the region. We could lose tourists and jobs.

The Minister is aware of the case of Prestwick Airport in Scotland. It was a refuelling stop, but due to improvements in airline technology, that stop became unnecessary. The airport is under significant pressure to survive and I hope the same does not occur at Shannon Airport.

Between 1999 and 2003, tourism lost approximately 3 million bed-nights along the western seaboard. As the Minister knows, there have been a number of closures. Unless more visitors go the area, there will be further closures. The Minister mentioned a few plans. The three reports in the past three years on Shannon Airport with which I am familiar suggested that if the bilateral agreement came about, a plan should be put in place immediately so that Tourism Ireland or another body could enter the source market to ensure business is found for the airport. On the same day Aer Lingus announced its commitment to retain its 400,000 seats, it announced three new American destinations — Orlando, Detroit and Washington — from Dublin.

This is an important issue. The Minister does not agree with the Irish Hotels Federation that a major marketing plan must be put in place, but I will warn him that this matter will have significant implications for our county, the western seaboard and the Shannon region. Will he be more specific concerning what strategy is in place to ensure the survival of Shannon Airport?

John O'Donoghue (Kerry South, Fianna Fail)
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Last year was the best in the history of Irish tourism, as 7.7 million people visited the country and generated almost €4.5 billion in revenue. It was an extraordinary performance and is indicative of the resilience of the tourism industry. I anticipate that we will exceed those figures this year, surpassing the 8 million visitor mark for the first time.

This is a small island on Europe's periphery and visitors arriving in such numbers will benefit every part of it. Last year, there was a substantial increase on the previous year in the number of visitors to the western seaboard. I forecast another substantial increase this year. It is not true to say last year was a poor tourism season.

Jimmy Deenihan (Kerry North, Fine Gael)
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I did not say that. I asked about the Minister's plan for Shannon Airport.

John O'Donoghue (Kerry South, Fianna Fail)
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Regarding the open skies arrangement, it is anticipated by the chief executives of Tourism Ireland and Fáilte Ireland, the officials in my Department and the Department of Transport and the Government in general that open skies will lead to a revolution in Irish tourism. The number of visitors from the United States of America will increase considerably in the coming years.

When we speak of open skies and the Shannon stopover, let it be remembered that there was quid pro quo, namely, our national airline could not fly from more than four gateway cities in the USA. It was restricted in terms of its growth and, therefore, the number of people it could bring here from the USA. That quid pro quo is gone, indicative of which is Aer Lingus's announcement on the night of the agreement being made that it will fly from three more gateway cities.

Jimmy Deenihan (Kerry North, Fine Gael)
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None of those flights will go to Shannon Airport.

John O'Donoghue (Kerry South, Fianna Fail)
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Tourism Ireland has identified 15 major cities in the USA where we can expect substantial growth under open skies. This will mean that we can anticipate a large increase in the number of American visitors.

The Minister for Transport, Deputy Cullen, has an implementation document regarding the future of Shannon Airport. I have examined the document and stated that the demand for €44 million is unrealistic. However, my Department is considering our marketing of the region. It must be remembered that the number of visitors passing through Shannon Airport last year increased by 23% on the previous year. Given the pessimism expressed in some quarters, this was a tremendous performance. Inasmuch as the number of American visitors will increase under open skies, Shannon Airport will also grow. If it grasps the opportunities outlined in my original reply, I do not doubt that it will continue to benefit the mid west, west, south west and north west as it has always done, albeit in an enhanced way.