Joanna Tuffy (Dublin Mid West, Labour)
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Question 6: To ask the Minister for Arts, Sport and Tourism the policies he has initiated to protect the hotel industry here which is under economic strain; if he has had negotiations with the Department of the Environment, Heritage and Local Government towards providing rate subsides to allow local councils to reduce their rates particularly in areas such as the hotel industry; and if he will make a statement on the matter. [32323/09]

Emmet Stagg (Kildare North, Labour)
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Question 16: To ask the Minister for Arts, Sport and Tourism the percentage decrease in tourism for 2009; the measures he has taken to tackle this issue from a policy level; and if he will make a statement on the matter. [32335/09]

Tom Hayes (Tipperary South, Fine Gael)
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Question 23: To ask the Minister for Arts, Sport and Tourism his plans to respond to the submission from the Irish Hotels Federation outlining the measures required to deal with the current crisis in the industry; and if he will make a statement on the matter. [32275/09]

Bernard Durkan (Kildare North, Fine Gael)
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Question 25: To ask the Minister for Arts, Sport and Tourism the extent to which he has reviewed the tourism sector to date in 2009, with particular reference to the negative impact of the economic downturn; the degree to which specific issues have been identified which might have the effect of improving the trading conditions in this sector for the remainder of 2009 and 2010; and if he will make a statement on the matter. [32224/09]

Kathleen Lynch (Cork North Central, Labour)
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Question 34: To ask the Minister for Arts, Sport and Tourism the policies he has brought forward in the area of tourism in view of the decline in international tourism to Ireland; and if he will make a statement on the matter. [32341/09]

Martin Cullen (Waterford, Fianna Fail)
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I propose to take Questions Nos. 6, 16, 23, 25 and 34 together.

In response to Parliamentary Question No. 3, I outlined the tourism performance so far this year. There is no doubt that the period to date in 2009 has been very difficult for tourism globally which has been reflected in overseas visitor numbers to Ireland. There have been significant declines in GDP, personal spending and consumer confidence across all our major source markets which, combined with unfavourable exchange rate movements, have had a negative impact on the numbers of overseas tourists.

In this context, through regular contact with the key industry representative groups, I am fully aware of the many issues affecting the hotel and catering industry, including the issues of costs and competitiveness. Managing costs will be key for tourism businesses to survive the current downturn and Fáilte Ireland has implemented a range of measures to help the tourism industry to address costs and competitiveness.

In particular, they have refocused their programmes to meet the enterprise support needs of businesses in the tourism sector in the current difficult climate. In 2009 Fáilte Ireland will be investing almost €6 million in the form of direct supports and advice for tourism enterprises. The industry is responding well to the initiatives and the take-up on the programmes is very positive.

I regularly discuss costs and competitiveness issues affecting tourism with my colleagues both at Cabinet and bilaterally. In this regard, my colleague, the Minister for the Environment, Heritage and Local Government, specifically asked local authorities to again exercise restraint in setting any increases in commercial rates and local charges for 2009, in order to support competitiveness in the economy, nationally and locally.

Local authorities responded positively to this request and there was only a marginal average increase in rates across the country of 1.15% in 2009, significantly lower than previous years. A number of local authorities decreased rate levels and some others did not increase them. While I would like to see rates on business drop across the country, I recognise the genuine funding needs of local authorities. In the medium term, the broadening of the revenue base, particularly at local level, presents opportunities to relieve the burden on tourism and other businesses.

I am also glad to see that the changes I called for in Sunday pay rates in the hotel and catering sectors are now taking place. As a result, the cost in those sectors of labour on Sundays nationally will now be at time and a third as agreed through the JLC process. Given the high labour input in the tourism industry these important changes should have a positive impact.

Proposals have been received from the Irish Hotels Federation to alleviate the difficulties being faced by this sector of the tourism industry. The proposals cannot be considered in isolation and will be assessed in the context of policy responses for the industry as a whole as well as the general economy and the forthcoming budget.

In that regard, I am aware that Fáilte Ireland is working very closely with the Irish Hotels Federation on a study on hotel room capacity. This report will clearly have a role to play in presenting new policy options for this important part of the tourism industry.

With regard to working capital, I met representatives of all the banks to impress on them the need for appropriate lines of credit to be available to the tourism and hospitality sector, in particular as we face into the autumn and winter period, which is a very challenging time when working capital is required by many in the tourism sector. To assist the tourism sector through this current difficult period, an extensive range of marketing, product development, festival and sporting events, training and business supports are being rolled out by the tourism State agencies under the tourism services budget of the Department. For example, Tourism Ireland is keeping its marketing programmes for 2009 flexible and responsive. It front-loaded its campaigns across all markets to secure as much business as possible for the peak and shoulder season and has now intensified its tactical and co-operative marketing activity for the second half of the year with an €18 million autumn campaign.

On the domestic front, Fáilte Ireland committed to its largest ever campaign to promote home holidays in 2009, with in excess of €3 million being invested in a year-round marketing programme promoting awareness of, and interest in, taking a home break. As we already discussed, last week the Taoiseach and I launched the autumn initiative which is co-ordinated and implemented by Fáilte Ireland with funding from members of the tourism industry, and is intended to boost business between now and the end of the year.

In response to Priority Question No. 3 I outlined the current state of play on the work of the tourism renewal group whose report I expect shortly. The industry deserves great credit for its commitment to quality and value for money in responding to the current challenging economic conditions through more flexible pricing and offering special value offers and packages. I am confident that, with the support of the agencies, the tourism sector has the capacity to manage the current cyclical slowdown and that, looking further ahead, the renewal group's review will help the sector to return to sustainable growth in the medium term.

Mary Upton (Dublin South Central, Labour)
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I thank the Minister for his very extensive reply. Part of my question specifically related to rates and the Minister addressed it to some extent. I understand there is a balance between the local authority needing the rates and the cost to the hotel sector. At present, the hotel sector is considered to be in debt to the order of approximately €6.7 billion; a phenomenal amount of money, almost at Irish Nationwide levels, and reckoned to be at approximately €110,000 per bed.

The Irish Hotels Federation makes the point that rates are set based on the size of premises and have nothing to do with turnover or employment. This gives a very skewed rate for those trying their best to keep people in employment. I recognise what the Minister stated about local authorities needing to receive the rates but we have to consider what is happening to the hotel industry. Can any realistic approaches be made to the Department of the Environment, Heritage and Local Government to address this? South Dublin County Council was one of the local authorities that reduced its rates. The Minister stated that rates were increased by 1.3% overall. The Irish Hotels Federation believes it should be reduced by approximately 30% for the sector to be viable. Perhaps 30% is an optimistic level of reduction but increasing the rates is making it impossible for many hotels to be viable.

Martin Cullen (Waterford, Fianna Fail)
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I agree with the Deputy on this point. I introduced a Valuation Bill a number of years ago and I have always believed that rates should be based on current market conditions and real value and income levels and not a notional level based on the size of the property. One could have a very large property with no activity taking place in it. It is open to local authorities to make themselves aware of the real issues for the properties they are dealing with and to work closely with the sector to ensure the rate is fair and reflects current economic value and not a notional square footage value. I am glad to hear some local authorities are doing this and I encourage all of them do so as we come to the end of this year and go into next year. Deputy Upton referred to a reduction of 30% and I do not know how realistic that is. The industry is under pressure and we need flexibility in the public sector to be able to match the timing of real-time changes to current activities.

The Deputy was correct to state that there is overcapacity in the market and some businesses in the tourism sector are more speculative rather than having a tradition of being involved in the sector. Unfortunately, some of these may go by the wayside but that being said we will try to sustain as many as possible of the businesses that exist in the wider tourism and hospitality sector.

Olivia Mitchell (Dublin South, Fine Gael)
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On that issue, I spoke to a hotelier in Cork who pays €10,000 a week in rates. It adds up to €500,000 a year, which nobody can sustain. That is not even in Dublin; it is in Cork. The hoteliers are reducing their prices but their inputs must come down. That means local authority inputs must come down.

My question is related and the Minister was about to touch on it. Many of the hotels established in recent years are developer hotels and not hotelier hotels and many have gone into examinership. They are trading in a little cocoon and are protected from all normal commitments they might have. They have a holiday from payments, which are obligations for hotels that are not in examinership. A problem of unfair competition arises between hotels in examinership and those struggling but not yet in trouble. Those hotels are reducing their prices but hotels in examinership are slashing their prices just to bring in some cash. The examiner will want to bring in some cash to minimise the losses and to make some contribution to overheads. In the short term, that is very good for the consumer but in the long-term, it is not much good if it drives all the original hoteliers out of business.

The issue of examinership will have to be addressed. It is very obvious in the hotel industry but it will happen in many other businesses. Has the Minister had the opportunity to talk to the Minister for Finance or the Tánaiste? Who would deal with an issue such as this? Obviously, the use of examinership has increased hugely and it is causing problems for legitimate businesses which are struggling and just about keeping their heads above water.

Martin Cullen (Waterford, Fianna Fail)
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I am aware of the problem. I have had some interaction with the Irish Hotels Federation on this issue and it has made that point clear to me. I do not believe it is widespread but the Deputy was right that there are instances where hotels are literally sustaining themselves. They are turning money but are not profitable and are not even covering their costs because of certain protections that exist. That is a concern in regard to the legitimate end of the industry, so to speak, which is struggling to survive, albeit at heavily discounted rates. Such hotels are certainly not making much profit but are hoping to make enough to keep the doors open.

It raises a wider issue of which I am aware in the context of the National Asset Management Agency. A situation cannot arise which would allow unfair competitive practices simply to sustain one block to the destruction of the other. That is an issue I have already voiced and to which I am very alert. We must be very careful in that regard.

Mary Upton (Dublin South Central, Labour)
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Given that set of circumstances and what one might call NAMA hotels, or hotels at risk of being put into the NAMA system, has the Minister considered asking the Minister for Finance if he will appoint somebody with a knowledge of the tourism or hotel industry to NAMA? The debt is €6.7 billion, which is a substantial amount of money. Somebody with a specific knowledge of, and interest in, the tourism industry or hotel industry should be appointed to NAMA.

Martin Cullen (Waterford, Fianna Fail)
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It needs somebody with a very particular level of skills given the complexity of this area. I am anxious that the quality of that board is unassailable in terms of the depth and breadth of its knowledge, as is the Minister for Finance. I believe the Minister for Finance has said to the Deputies' party leaders that if they have particular people in mind, they should talk to him. I am in the same position and I will do so.

I do not want to simply put a hotelier on the board. The person must have a very high level of financial skills. If I could find somebody with that high level of financial skills who has some track record and understanding of the broad tourism sector, that would be a win-win situation.

Olivia Mitchell (Dublin South, Fine Gael)
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It is important it is not somebody with a vested interest. That will be the problem with NAMA. There will be clear conflict of interest for the banks which will manage both loans. It will be a real issue.

Martin Cullen (Waterford, Fianna Fail)
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The National Asset Management Agency has traction. There are issues to be resolved and the Minister for Finance is open to that on Committee Stage. Our discussion demonstrates the complexity and the pitfalls for various sectors. I am glad we are all alert to them and are working to try to ensure we do not create even more problems for ourselves. There will be good people on the National Asset Management Agency who will be able to sustain us in terms of their skills.