Timmy Dooley (Clare, Fianna Fail)
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To ask the Minister for Transport, Tourism and Sport the way he will help put in place a viable hotel industry; and if he will make a statement on the matter. [57534/12]

Michael Ring (Mayo, Fine Gael)
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The Government has implemented a range of measures to support the tourism and hospitality industry, including hotels. VAT has been reduced to 9% on accommodation and restaurant services and this lower rate will continue throughout 2013. The visa waiver scheme is encouraging visitors from emerging markets to add Ireland to their trips when they are visiting the UK. Also, the halving of employers' PRSI for those on modest wages has reduced the cost of employing people.

In 2013, the Government will spend almost €140 million through its agencies to support the tourism industry, to market tourism at home and abroad and to support product development. Fáilte Ireland also provides a range of business supports to tourism enterprises. These supports cover areas such as financial advice, business mentoring, productivity improvement, cost control, sales and marketing, e-business and customer care. They also assist tourism businesses to engage constructively with their banks. I am also glad to see that, in 2011, hotel room occupancy rose. Combined with better cost control, profits per available room before tax rose by over 22%.

In the context of recent budgets, the Minister, Deputy Varadkar, has signalled his intention to have further discussions with the Minister for Finance on the possible involvement of hotels in the extended employment and investment incentive scheme, EIIS, and the real estate investment trust, REIT, initiative. As the Deputy is aware, 2013 is the year of The Gathering and the tourism industry, particularly the hotel sector, will be able to benefit from it fully.

Timmy Dooley (Clare, Fianna Fail)
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I welcome the Minister of State's reply. I acknowledge some of the work the Government has done in assisting the tourism industry at a particularly difficult time.

The Irish Hotels Federation, IHF, has published a policy document on the future of the hotel industry. As the Minister of State will be aware from his knowledge of that industry, the report was compiled by Dr. Alan Ahearne, who has considerable experience in the sphere of economics and possesses an understanding of the potential for growth. It is clear from the report that the hotel sector in particular is under strain. We all know of examples of hotels that were built in the wrong locations. In trying to survive, they dislocate business to their areas, offer rates that are lower than are commercially viable and are involved in the NAMA process, which will take time to be resolved. They are placing a strain on what might be referred to as "Mom and Pop" hotels, family-run businesses that did not get caught up in the crazy property game but now find it almost impossible to compete.

While I accept that The Gathering will have an impact, it will not resolve the long-term issue. The situation will not be too bad in the large cities. There is a strong demand for hotels in Dublin in particular. However, hotels in the more peripheral and, one might say, scenic areas are under significant pressure.

Does the Minister of State believe that the EEIS could be extended to include restructured hotels? This move was called for by the IHF. As the Minister of State knows, hotels cannot qualify for the scheme currently. Would he consider recommending to the Minister for Finance, Deputy Noonan, the inclusion of an extension of this scheme in the Finance Bill? The qualifying investor fund specially designed for restructured hotels can be attractive for private investors, in particular foreign investment. There is some appetite in this regard. Another way to break the logjam in the hotel market would be to invest moneys from the National Pensions Reserve Fund, NPRF, in the dedicated hotel restructuring fund.

Dr. Ahearne's report outlines a number of positive initiatives. One recommendation called for the State to invest heavily, but I do not believe that would fly. Will the Minister of State comment in this regard?

Michael Ring (Mayo, Fine Gael)
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The Minister, Deputy Leo Varadkar, and I have met, both together and separately, with representatives of the Irish Hotels Federation on several occasions. The Deputy has rightly identified the serious problems facing people in the sector. As he knows, however, it is for the Minister for Finance to make a decision as to whether any of the initiatives to which he referred are included in the Finance Bill. It is an issue that the Minister, Deputy Varadkar, has taken up with the Minister for Finance, as have I.

I agree that debt restructuring is a major concern for hotel owners. Some of them would be coming into profitability in the next year or two were it not for their debt burden. The Deputy is also correct that this is a particular problem for hoteliers in rural areas as opposed to in the cities, where there has a been significant improvement in occupancy rates. The recent initiative to reduce VAT and PSRI has proved successful in creating extra jobs in the sector. I acknowledge, however, that serious issues remain, including over-capacity and below-cost selling of bed nights. As I said, we are engaging with the Department of Finance in order to see what can be done. Ultimately, however, it is a matter for the Minister of that Department as to what specific measures are introduced.