Dáil debates
Thursday, 17 December 2009
Priority Questions
Tourism Industry.
4:00 pm
Olivia Mitchell (Dublin South, Fine Gael)
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Question 1: To ask the Minister for Arts, Sport and Tourism the action he has taken to implement the survival actions outlined by the tourism renewal group to ensure the endurance of the tourism industry in the current economic climate; and if he will make a statement on the matter. [47909/09]
Martin Cullen (Waterford, Fianna Fail)
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The report of the tourism renewal group was launched on Thursday, 8 October 2009. This report sets out tourism's contribution to Ireland's economic, social and cultural development and the prospects for Irish tourism in a changed world, as well as a framework for action for tourism's survival, recovery and growth over the period to 2013. The report proposes five survival short-term actions to minimise the potential impact of current challenges and nine recovery actions for medium-term attention to set Irish tourism back on a growth path as the world economy recovers. All of these actions are being pursued by myself, the Department and the relevant agencies.
Building on the framework for action, along with the Government's wider strategy for economic renewal, the budget recognised the tourism sector as a critical, labour intensive indigenous sector. The overall tourism services budget will be increased in 2010. This will enable the level and value of investment in overseas marketing of Ireland to be maintained in real terms, as recommended by the tourism renewal group. Investment in visitor attractions will be increased to â¬22 million. The Government's commitment to tourism is also shown by its inclusion in a range of cross-cutting measures, including the employment subsidy scheme, the credit review system and incentives for investment in energy-efficiency, all of which support sustainable tourism enterprises and employment. Further specific measures that will help tourism include the changes in alcohol excise duties and VAT and the rail travel initiative aimed at senior citizens visiting Ireland from abroad, although I hope to make this valid for people from the age of 55 upwards because there is a strong cohort aged between 55 and 65 years.
I believe that drawing on the report of the group, Government and the tourism agencies are identifying and driving the right measures to assist in ensuring that tourism survives and to position the sector for recovery and growth as the Irish and global economies get back on track.
Olivia Mitchell (Dublin South, Fine Gael)
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I recognise and welcome the budgetary measure to give older persons free travel on the trains. It may not go as far as I had hoped but it is welcome. The travel tax, however, was not recognised. The tourism renewal group recommended ending it as a major survival action. It is also a major recommendation of the Competitiveness Council in this month's report. I do not understand how the Government missed the opportunity presented by the budget to get rid of a travel tax that every business organisation says is destroying Irish tourism. It also makes Irish business very difficult too.
Yesterday, I read in the newspapers that another airline went to the wall. I heard the Minister for Transport saying before the budget was announced that he did not believe this tax had any impact on travel but he is not talking to the airlines because he does not seem to get the point that the airlines are affected. Hotels are not because they do not connect with decisions made in Germany or elsewhere.
The airlines have not passed on this tax because their sales are very price sensitive. Instead they are moving their bases and planes out of Ireland. Yesterday, we heard that Ryanair has opened a base in Malaga going to 19 airports, none of them in Ireland. This is a disaster waiting to happen. Already Aer Lingus is teetering on the brink of collapse. Will the Minister bring the message to Cabinet that this travel tax must go before it does irreparable damage to Ireland?
Martin Cullen (Waterford, Fianna Fail)
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There is a question on this issue later which we will reach this afternoon. I am happy to deal with the matter now but there is a specific question on it. I agree with much of what the Deputy says but I will deal with the issue on Question No. 9.
Brendan Howlin (Wexford, Labour)
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We may not reach it in the truncated time we have this evening.
Martin Cullen (Waterford, Fianna Fail)
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The tourism renewal group and others involved with tourism have raised the issue of this tax and in a perfect world I would not recommend it, nor did I in the first instance. The Government, however, has to balance that against my need for income to sustain the tourism budget and try to grow it this year. Such taxes are not helpful but that must be placed against the fact that tourism was the only sector in the budgetary system that increased this year. That was greatly welcomed. The Deputy is aware of the positive responses to the budget from organisations such as the Irish Hotels Federation. I am worried when I see the remarkable recovery of the American market, which was down only 2.2% at the end of September when Aer Lingus was down almost 26%. That is not in harmony with the general market figures.
I met with Continental and Delta airlines, US Airways and Aer Lingus early in the year when the figures were disastrous in the American market for the first quarter. We began giant marketing programmes and specific programmes with the airlines which worked extremely well. There must be a message for Aer Lingus in this if the market is down only 2% and Aer Lingus is down 25% or 26%. This is extremely worrying because Aer Lingus is an important part of the brand and marketing of Ireland and will have an important role.
Olivia Mitchell (Dublin South, Fine Gael)
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While I appreciate all that is being done to improve the American market, does the Minister accept that the travel tax does not impact as much on the American market as it does on the short haul flights to Europe? A tax of â¬10 on a flight that costs only â¬5 has a much bigger impact than on a flight costing â¬200. The travel tax impacts on the short-haul and European flights, the flights for a weekend. This is not to deny the importance of the American market.
Martin Cullen (Waterford, Fianna Fail)
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In a perfect world, one would not want any taxation but I am puzzled when I see the charges for baggage, which are way in excess of-----
Olivia Mitchell (Dublin South, Fine Gael)
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The Minister does not get the point. The tax is not being charged. The airlines are not passing it on to passengers.
Martin Cullen (Waterford, Fianna Fail)
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I accept that. I am not disagreeing with the Deputy but these extra charges which are passed on, as well as those for booking on the Internet and the differences about arriving at the airport are way beyond the â¬10 travel tax. Airlines seem to be able to do that at will without difficulty and pass those charges onto their customers at the same time, yet the travel tax is made out to be a bigger issue, which I question.