Wednesday, 6 May 2020
Covid-19 (Tourism): Statements
I welcome the opportunity to address the House on the impact of Covid-19 on Irish tourism, our plans to support the sector in recovering from that crisis and all other matters pertaining to it. I have addressed the House on a number of occasions to reflect on tourism but never in the circumstances in which the sector now finds itself. It is right and proper that the primary focus of the Government should be on the public health crisis response. Nevertheless, we must also ensure that we do our utmost to help our economy to recover from what is the worst short-term economic shock in the history of the State.
The importance of tourism in Ireland cannot be overstated. The sector has made a huge economic and social contribution in recent years and played a leading role in driving the recovery from the latest economic calamity. Tourism plays a pivotal role, particularly in rural and regional areas, with most earnings retained within the country. Until now, as a labour-intensive sector contributing directly to more than 11% of employment, tourism has been a leading job creator, supporting 260,000 jobs in 2019. It is the largest indigenous sector. In normal circumstances, tourism helps to provide diverse employment opportunities for many lower-skilled workers and those unable to work full time. It also provides employment in rural communities and other often economically disadvantaged locations where alternative opportunities can be limited.
Approximately 70% of tourism jobs are located in regional and rural areas outside Dublin. Tourism is a significant export sector, with the majority of tourism spending being generated by overseas tourists. In 2019, international tourists spent more than €5 billion in Ireland compared with approximately €2.4 billion spent by residents of Ireland, North and South. The breakdown is roughly 2:1.
Tourism is one of the most directly affected sectors in the current crisis. With international aviation at a virtual standstill, the closure of tourism sites and a ban on public gatherings, the impact of Covid-19 on global tourism is overwhelming and immediate and has impacted travel and tourism like no other event in history. In the space of a few short weeks, the Irish tourism and hospitality industry has been decimated, with job losses in the sector estimated at this stage to be in excess of 200,000. The devastation being experienced is unprecedented. I sincerely empathise with those who have lost their jobs and livelihoods as a result.
For international tourism, the OECD projects that the shock could amount to a 75% decline globally in 2020. It is important, however, to note that the scale of the impact remains difficult to estimate given the unknowns that exist. The OECD also estimates that domestic tourism across the globe is expected to recover more quickly, but it will still be badly hit. It could be down 50% or more by year end. Crucially, all of this assumes that economic activity, both domestically and internationally, begins to recover significantly in quarters 3 and 4. If that does not occur, the results will be even worse. Many tourism businesses have now written off 2020 completely and some may not reopen until 2021. Others may go out of business and never reopen. It is likely to take years to recover business to anything like 2019 levels.
Since the crisis began, the Minister, Mr. Ross, and I have engaged with the industry with a view to understanding its concerns and needs. We established and participate in a Covid-19 tourism monitoring group made up of industry stakeholders, tourism agencies and Department officials. The group first met on 26 February and has met seven times in total thus far, including yesterday afternoon. That first meeting on 26 February was at the very start of the crisis here and we tried to get on top of it as early as possible. The meeting was the day after the postponement of the Ireland versus Italy rugby game. The information we have received from these meetings has been most valuable in formulating a response to the crisis in terms of how our agencies operate and the Government's response. I thank all the people who have been involved with the body to date.
Fáilte Ireland has set up a Covid-19 industry advisory group which meets weekly. The purpose of the group is to provide supports to the tourism industry and to facilitate the rapid sharing of information and insights to help improve the sector's understanding of and response to the crisis. In addition, Fáilte Ireland has developed and rolled out a suite of training and advisory supports for tourism businesses that enables them to respond to the challenges and threats now being faced by the sector. The focus of the supports has shifted from the shutdown phase of the crisis to the business survival phase, with a focus on preparing businesses to reopen and relaunch.
For its part, Tourism Ireland has postponed virtually all of its overseas promotional activity. It will resume activity when the time is right, not just in Ireland but also in our key markets. As a first step, it will carry out market research in some of those markets to gauge consumer sentiments towards holidaying again in a post-crisis environment.
Tourism must seek to survive before it can start to recover. The Government's focus to date has been on supporting those who have lost their jobs and supporting businesses to remain viable during this difficult time, with specially targeted supports to assist companies to stay operational and retain their staff. The Department has liaised with other Departments and industry representative bodies to align the economy-wide Covid-19 supports and initiatives with tourism and hospitality needs. As a result, many tourism businesses are now availing of the various cross-sectoral economic supports the Government has already put in place, including the wage subsidy scheme, increased unemployment benefits, the State credit guarantee scheme, working capital loan schemes, enterprise support schemes and the deferral of tax liabilities, VAT, social contributions and local authority rates.
In recent weeks, the Minister and I met representatives of the pillar banks and Banking and Payments Federation of Ireland to discuss difficulties being experienced by tourism businesses in accessing low-cost financial supports. We also met representatives of Insurance Ireland to highlight issues with the business interruption elements of policies and to press for a reduction in premiums for tourism businesses that are now closed.
The depth and breadth of COVID-19 related impacts on tourism and the wider economy mean that a speedy recovery is unlikely.
It is likely that the restart of the sector will be slow and phased and it will not be easy. We should not forget that it is a people-industry and these are the types of enterprises which are likely to be the last to return to full normality.
As a first step we must work with public health authorities to establish ways of making tourism enterprises safe for workers and consumers. On 1 May, the Government published a roadmap for reopening society and business to ease the Covid-19 restrictions and reopen the economy in phases. The framework sets out how we can keep the level of transmission as low as possible while balancing continuing restrictions proportionately with the positive social and economic benefits which will be brought about by lifting restrictions. Phase 1 provides for the welcome reopening of outdoor public amenities and tourism sites such as carparks, beaches, mountain walks where people are non-stationary and where social distancing can be maintained. The inclusion of golf as a sporting activity from the beginning of phase 1 is welcome for domestic tourism. Phase 2 will extend the travel limit from 5 km to 20 km and public libraries may reopen. Under phase 3 cafés and restaurants will reopen on 29 June. Hotels, hostels, caravan parks and holiday parks will reopen under phase 4 on 20 July. Phase 5 will see pubs, bars and nightclubs reopening, hopefully, on 10 August.
It is important that the tourism sector now puts plans in place for reopening in line with this roadmap. It will take some weeks for businesses to put adequate provisions in place to cater for social distancing which will be very challenging for certain enterprises and their employees. Fáilte Ireland is currently preparing a framework and guidelines, in conjunction with public health authorities, to assist the sector in this regard.
Tourism and hospitality businesses will require liquidity, working capital and business development funding to continue trading because demand and bookings from our international markets will be very slow to recover. The Government agreed on 2 May, at a special Cabinet meeting, a suite of measures to support further small, medium and larger business that are negatively impacted by Covid-19. The latest measures announced at the weekend are a €10,000 restart grant for micro and small businesses; a three month commercial rates waiver for impacted businesses; a €2 billion pandemic stabilisation and recovery fund within the Ireland Strategic Investment Fund, ISIF; and a €2 billion Covid-19 credit guarantee scheme to support lending to and the warehousing of tax liabilities for a period of 12 months after recommencement of trading.
Once we get the sector back open, we can look at what type of actions are needed to stimulate the recovery in the sector. For example, domestic tourism is sure to play a big part this year and next given the international tourism situation and how slow it is anticipated it will return. The Minister, Shane Ross, and I are considering the most effective structures to develop the recovery plan required for the tourism sector. We have already had some very useful contributions and proposals from industry stakeholders and our tourism agencies in this regard and all of these will receive due consideration as we develop a longer term tourism recovery plan for this important sector.
Given the severity of the crisis there are calls from the industry to reduce the VAT rate for tourism. Tourism will be a very competitive market globally as recovery takes hold and competing destinations will all be considering how they can best gain a competitive advantage. Tourism businesses are already putting together sales and marketing plans for 2021 and an early decision on a lower VAT rate for 2021 would help the industry to put forward competitively priced packages. This is something I will seek from the Government. It is something I am very passionate about and it will be much needed during the recovery phase. However, any measures taken, particularly on anything related to economic recovery, must be well co-ordinated across all sectors of the economy. A balance is required to ensure any measures taken will benefit the economy as a whole.
I will impress upon my colleagues in government the importance of supporting tourism in the recovery phase. I am under no illusions, however, that we as a country will face some very difficult choices on public expenditure in the coming years. Tourism has faced many challenges in the past, including 9/11, SARS, the volcanic ash cloud and foot and mouth disease, for example, but the current crisis is greater than all of those combined and it will take a huge effort to get tourism back into a well working recovery mode but we will all do our best.
I will share time with Deputies Calleary, Foley and Christopher O'Sullivan. I will use six minutes to make a statement rather than pose questions. Perhaps the Minister will impose on the Taoiseach to use one of his "Six One" or "The Late Late Show" slots to give answers.
In the meantime, I want to get some things on the record. First, I regret that the senior Minister is not here. I do not doubt the commitment of the Minister of State but I have an issue if those monitoring groups, like the Zoom meeting the Minister of State had with industry yesterday, are not getting to the Cabinet table. Unfortunately, despite the deserved work of the Minister of State over the years in tourism, he is not in the Cabinet. I have a concern that these issues are not getting to Cabinet.
Let us consider the business announcements of last Saturday. Funnily enough, they were not made to the House but to the media, which is standard. At least Hungary has formally suspended its parliament. We have simply somewhat suspended our Parliament in terms of the workings of it. I would prefer if such announcements were made to the House. Be that as it may, the announcements last Saturday were one-size-fits-all and are not worth the paper they were written on, frankly. There is an 80% business guarantee scheme on the never-never. Money is coming in from abroad at -0.75% through SBCI. It goes to banks. They then add on 3% or 4% and apply their own arbitrary underwriting to screw businesses into the ground. That is not the kind of support that is going to support the 20,000 businesses that are already closed in the country. Of 260,000 employees, some 175,000 have already lost their jobs. How many will get them back? We do not know. At the moment there are no industry-specific measures that have been identified to help.
The Zoom meetings the Minister of State has had since 26 February clearly have had no impact. I have outlined why in terms of Cabinet. That is a worrying concern. The first thing the Minister of State needs is a task force with a direct line to Cabinet. This should include people like publicans, who know how to operate a pub; hoteliers, who know how to operate a hotel; restaurateurs, who know how to operate a restaurant; and all the various tour operators, including adventure tourism and the various other types we have in this country. They should be informing the Minister of State. The health people can tell us how it must operate from a health perspective, but those in industry know how to put that stuff into practice. We have not had their input. We have had superficial meetings but the things identified have not come forward.
The first thing that needs to happen with the two European Commissioners who advocate sector-specific measures is that the Germans and the Dutch need to get with the programme. The Germans in particular should cast their minds back to the post Second World War era. We need a Europe-wide perpetual bond so that we can put aside or warehouse the entire cost of this. Fiscally, we would then be free to introduce the kind of sector-specific measures that will be required to get our industries out of trouble.
Do we really need to wait until the end of July to reopen hotels? The Minister of State should talk to the hoteliers. Is there a way that we can bring that back a month? What we are asking these people to do is close for five months and then reopen, be happy and make money operating at 50% capacity. Regarding publicans, I will use Sligo town as an example. I can think of only six of however many pubs there are in the town that could open and apply these social distancing measures. What are we doing for pubs?
Another specific measure the Minister of State must look at is 0% VAT. The Minister of State has said it himself and I am pleased to hear it. Again, however, he is not at Cabinet. These are issues that need to be looked at. Is the message getting through to Robert Watt and the Minister for Finance, Deputy Donohoe? It is the case that 13% of nothing is nothing but 0% VAT allows those people offering tourism product a 13% competitive advantage. As the Minister of State said, tourism will be highly competitive in the new period. There is no doubt about that. As matters stand, from a VAT perspective we are the 28th most expensive country in Europe. Will we look at that? Will we look at excise on alcohol to try to get people in on the basis that these people will not be in a position to be viable at 50% capacity? Again, if the Minister of State had the expertise of the trade in the decision-making room, he would know all of this already. The superficial Zoom meetings need to be backed up with tangible action and not a one-size-fits-all arrangement announced on Saturday to some media organisation. It should have been done in the House. There should be scrutiny and examination and it should be tested by Members, not only the chosen few, like myself, who are lucky to have their names drawn from the hat and get in here to speak for a few minutes once a week or every fortnight.
We also need to look at the French scheme on commercial rents. It is called the 60-20-20 scheme. Under that scheme, 60% of commercial rents are subsidised by the French Government, 20% is reduced by the landlord and 20% is paid by the commercial tenant. In terms of loan schemes, we need to look at 0% loans. The Government can borrow at -0.75%. It should get this funding to the people who need it in the meantime. Commercial rates should be suspended for 12 months. That is what businesses will need. Everyone will need 12 months. What is more, the Government cannot expect local authorities to take the heat on that. It must give them the money in advance or give them the money they are going to lose so that they can continue to provide services locally.
Reopening or restarting grants of between €10,000 and €30,000 will be required. Again, this is all contingent on Europe getting with the programme and realising we need to set aside the entire cost of this. In the context of Ireland, that cost could be €30 billion.
America will have a programme worth €50 billion to try to support the aviation industry. One thing I have a problem with is EC Regulation No. 261/2004, which the Minister of State's Government promoted and asked for in a European context. The regulation stops people getting refunds. I understand that airlines need cashflow at this time but why not let the airlines give the Government a credit note such that the Government pays back the hard-pressed families the cost of the holiday they will face?
I would appreciate it if the Minister of State could take some of those matters on board.
I know that talking about economic issues in the context of 1,339 people who have lost their lives can be cruel for people, particularly the families involved, but we also have to focus on getting people back to work. Tourism, as the Minister of State said, has taken the biggest hit. I have a couple of questions for him.
This is a general question to all Ministers. The Minister, Deputy Humphreys, suggested there will be flexibility for businesses to open more quickly. Who measures the flexibility? Will there be a central mechanism for organisations and industries - we have heard from the vintners and the hairdressers - that think they can come up with social distancing measures more quickly? To whom do they talk, and how will they be measured?
There is huge confusion about the schemes announced at the weekend. It is not a €10,000 grant; it is a cap of €10,000, and it is linked entirely to the rates paid in 2019. That differs fundamentally from other schemes such as that in the North, where for tourism and hospitality the figure is up to £25,000. That is more reflective of the amount of money that will be needed for hotels with big properties to try to get up and running, perhaps at much less capacity than normal and without bar income, based on current plans.
On working capital, as the Minister of State said, some businesses may not open until at least 2021 or possibly 2022. The current proposals look at six-month interest-free and payment-free issues. That will not work for tourism when income may not run until 2021 or 2022. What flexibility is there for tourism and hospitality specific products within the schemes announced at the weekend? The reduction of the VAT rate to zero has to happen, but unless we get working capital in, most businesses will not have the capacity to open. It is important, therefore, that we get clarification on that issue first.
Commercial rent still has not been adequately dealt with by the Government. Many landlords are still demanding rent. The Minister of State mentioned that insurance companies are not paying out on business interruption. This is an interruption beyond anyone's control, including that of the tourism industry. We need much more force from the Government in taking on the insurance companies, as well as in taking on the banks which are administering all the schemes that have been announced with a very heavy hand, not realising what they are doing to small businesses, particularly in tourism and hospitality, in order to get them back up and running.
What is the capacity for 2021? Many tourism interests made investment this year in coaches, for instance, or extensions. They need to be given a break to protect the industry for reopening on the international markets in 2020 or 2021. Our local tourism promotion co-operatives need support. They have done huge work. Their membership will not be in a position to support themselves. Our regional airports need support. They are essential to getting the tourism industry back up and running for incoming visitors. They need to be protected during 2020.
Finally, regarding the coláistí Gaeilge, the closure of coláistí samhraidh right across the country will have a massive impact on domestic tourism. What role does the Department have, with the Minister of State, Senator Kyne, and others, in addressing that?
Many facts, statistics and truths regarding the Irish tourism industry will be disclosed in this Chamber this afternoon. To my mind, however, the most important truth, dare I say it, is that County Kerry is the jewel in the crown of the Irish tourism industry, hosting 2.2 million overseas and Irish visitors every year. Last year alone, tourism was worth some €661 million to Kerry and supported one in five of our workforce and their families. Now, all our hotels, guest houses, bed and breakfast accommodation, bus operators, restaurants, pubs and visitor facilities are in lockdown. Covid-19 has forced 82% of the hospitality workforce into unemployment.
Tourism supply and support businesses have also been severely affected, with thousands of employees out of work and companies struggling simply to survive.
The hit to Kerry is likely to be in the order of between €300 million and €400 million and will impact on every town, village and local community in my home county. We now have a provisional timetable for the reopening of the tourism sector, but if tourism is to survive and ultimately thrive post-Covid-19, it needs much more than just a timetable.
In that regard, I ask the Minister for State to consider and address the following points. Why have seasonal workers, so vital to the tourism industry, been excluded from the Covid-19 payment? Will the Department insist on a VAT rate of 0% for a two-year period with immediate effect, followed by a scaled increase to a maximum of 9%? Will the Minister of State commit to rate relief for six or nine months, with a further commitment to fund local authorities for revenues lost? Will he consider a revision of the criteria for local enterprise office, LEO, support mechanisms to facilitate employment grants for the tourism sector? Will he also consider a rebate on insurance premiums for the periods that businesses are closed? Will he consider a business reactivation fund to support businesses in reopening? We require a fair and equitable reopening schedule for restaurants, public houses and other facilities so that no single sector is disadvantaged by virtue of the timetable. I also suggest an extension of the wage subsidy scheme for a further six to 12 months.
Ba mhaith liom cúpla focal a rá maidir leis na coláistí Gaeilge shamhraidh. Is gné fhíorthábhachtach iad den tionscal turasóireachta. Mar is eol don Aire, ní bheidh dalta ar bith i nGaeltacht Chorca Dhuibhne, nó aon Ghaeltacht eile, an samhradh seo. De bharr sin, ní bheidh aon airgead á dhéanamh ag an eacnamaíocht áitiúil, ag na mná tí, agus mar sin de. Caithfear roinnt mhaith tacaíochtaí a chur ar bun chun cinntiú go mairfidh na coláistí agus an eacnamaíocht áitiúil sna blianta atá amach romhainn. Tá an t-am caite, so fágfaidh mé aige sin é.
It has been a long road up from west Cork and I know the Ceann Comhairle will offer me a bit of liberty. I am here today, like everybody else, to highlight the hardships that our tourism sector is facing. There is no doubt that the sector will face a massive struggle in post-pandemic Ireland. While other sectors will be impacted, we can all agree that tourism will face the longest road back when this pandemic has abated.
Tourism is of vital importance to our economic health. The industry employs more than 260,000 people. It generated €7.5 billion in revenue last year and was worth €1.7 billion to the Exchequer. It is fair to say that 2020 has been an economic write-off for tourism. These tourism businesses emerged from the quiet months of January and February into an absolute economic lockdown. It has devastated many of the towns and villages that rely on tourism to put bread on the table. In my own county of Cork, for example, the hotel industry once employed 6,000 people. That number has been whittled down to 400 people. We are talking about absolute devastation to the industry.
The tourism sector is an ecosystem of thousands of delicately balanced, community-based small and medium sized enterprises that are the economic backbone of rural towns and villages in Ireland. West Cork, where I am from, is a perfect example of that, similar to Kerry, of which Deputy Foley spoke.
I am not asking for an immediate opening of the floodgates and acknowledge that public health has to come first. However, when we beat this thing, and we will, we must be in a position where we can hit the ground running. We need a dedicated plan to help the sector. I firmly believe that just throwing money at advertising campaigns is not good enough and while interest-free loans and reductions in VAT are steps in the right direction, they are not enough. Significant grant aid is needed for the businesses affected. Businesses in the tourism sector are finding it incredibly difficult to access finance at the moment because there are questions about the viability of those businesses and the banks are classifying them as a high-risk category. That does not make sense because those businesses were viable before Covid-19 and will be again. What we need is grant aid. Those businesses need a stimulus and money in their pockets so that they can pay and retain staff and keep their businesses afloat.
In my first address in the Chamber I called for a reduction in VAT. I am calling for that again. Will the Government consider a 0% VAT rate for these industries? Will it begin the planning for a campaign to reinvigorate domestic tourism in the medium term? What is it the Government doing to ensure the long-term return of international tourism? Will it consider providing significant grant aid for those businesses? These operators need clarity. Restaurant and café owners need to know how much space they need to put between tables. How many people will be allowed in their premises? Will Perspex divisions, for example, work? They need to know the answers to those questions. Can the Government provide clear guidance to those businesses to ensure they know precisely what they need to do to reopen?
I very much welcome the opportunity to speak. I am sharing time with Teachta Cullinane and Teachta Daly - five minutes each.
When we heard on the news over the weekend that tourism was among the sectors worst hit by the Covid-19 job losses, it came as confirmation for most of us rather than a surprise. The sector is crucial. In many areas it is the beating heart of local economies but, dependent as it is on the movement of people, it has been decimated by Covid-19. The tourism and hospitality sector supports an estimated 260,000 jobs in Ireland. That is 11% of total employment, making it our largest local employer, and it has reached into every region and county. Some 70% of jobs in the sector are outside Dublin - 6,500 of them are in my county of Meath - highlighting the regional contribution of tourism and its vital role in spreading employment opportunities and prosperity across the entire country.
In recent weeks we have seen pubs and restaurants, shops, hotels, guest houses, bed and breakfast premises, museums, galleries, theatres, visitor centres, tour operators - the list goes on - closed, many with hundreds of employees who have thousands of years of combined working experience. For many, it is a lifetime's work. I extend my solidarity to those workers at this uncertain time.
If the economic impact is great, I suggest that the social impact is many times that. Festivals, events and places that bring people together are all out of bounds. These are matters of the greatest importance. Literally hundreds of thousands of workers and their families - entire communities in some cases - are waiting in anticipation.
I have two questions for the Minister of State. We need a dedicated recovery plan for the tourism and hospitality sector. The business supports announced by the Minister for Finance, Deputy Donohoe, at the weekend do not go anywhere near far enough. They are not ambitious enough, focused enough or extensive enough. Will the Minister of State commit to the establishment of a tourism recovery task force to develop and deliver a dedicated tourism recovery package? In his opening statement, he made reference to looking at the structures. Will a tourism recovery task force be part of that? Will he outline a timeline for the delivery of that?
Separately, our air and sea ports are the vital lifelines for the tourism and hospitality sector and we want to see them thrive but there are concerns that essential Covid-19 precautions are not being implemented. It is suggested that entrants are not being screened and followed up, and social media magnifies that. Will the Minister of State outline the plans in place to ensure that ports and airports will not act as Covid-19 vectors and will be ready to respond to the increased traffic that we hope to see in the coming weeks and months?
Yes. I thank Deputy O'Rourke. On the issue of the task force, it is important that we get it established as quickly as possible and that we get the right people on it. I envisage a triumvirate of representatives of the industry, first and foremost, but also the people with expertise in our agencies as well as a role for the Department. My vision for the task force is that we would have an independent chairperson who would assist the task force to formulate proposals and measures that are very much supportive of and needed by the industry. Plans are well under way within the Department to have the task force established. I would have liked to have had it established by now but I hope that in the very near future, working with the Minister, Deputy Ross, and officials in the Department, it will be progressed further and we will get it moving.
Deputy MacSharry, who is no longer in the Chamber, was quite harsh in his comments regarding the people, including in the industry, in the agencies and the officials in the Department, who have given huge time to the group we established and which has met seven times since 26 February to deal with the survival phase we are in at the moment. Those people have given a huge amount of their time and have been very constructive. Their feedback has been relayed directly to Cabinet by the Minister, Deputy Ross, who was present for the vast majority of those meetings. The only ones he missed, ironically, were those where he was at Cabinet at the same time. All of that is happening already. I am very keen that this task force should be highly effective and that the people involved have the expertise.
I have five minutes. With the support of the Ceann Comhairle, I will take two minutes to speak, ask the Minister of State to respond for two minutes and use the remaining minute to wrap up my contribution. It is important to leave time for us to get responses to the questions we put to the Minister of State. He said in his opening remarks that tourism is one of the most directly affected sectors in the current crisis. Nobody would disagree with that. He also said that tourism will seek to survive before it can start to recover. Again, I agree with that.
However, for the tourism sector to survive there must be a plan, and it has to be a plan that is separate from any plan for other sectors of the economy because of how precarious the situation is for the many businesses affected by the tourism sector, including hotels, restaurants, bars and other hospitality services as well as a whole range of other tourism products. There does not seem to be the urgency from the Department that is needed in this regard. I welcome that there may be a task force, but there must be immediate measures that can be put in place in the here and now. I am sure the Minister of State is talking to the same hotel owners who are telling me their doors will not be reopened unless there are tangible and practical solutions put on the table.
In regard to the rents waiver the Minister of State spoke about, three months is not enough. Business owners require certainty in the here and now. Will the Minister of State commit to there being a commercial rates waiver for the rest of the year for the hospitality sector? Those involved need to hear that level of certainty. The grants scheme that was announced some weeks ago is woefully inadequate in terms of the supports put in place. It needs to be revisited.
The Minister for Health spoke about the possibility of an extra bank holiday towards the end of the year. Is that being looked at seriously? It would be of benefit because the tourism sector does well out of bank holiday weekends. Will the Minister of State respond to those points?
I appreciate the importance of the industry in the Deputy's region of the south east. There is huge further potential there. In regard to our plan and our roadmap, which is available since last Friday, the reality is that we are planning in the context of not knowing how this global pandemic will develop. There are a huge number of moving parts. Yes, we want to have our plan ready as early as possible and have it fed into by as many people with the relevant expertise as possible, but it is not quite as simple as put out a plan and off we go. We do not know exactly where we are going to be in three months. We have our hopes and aspirations in regard to where we want to be but, as we know, all the phases in the roadmap are dependent primarily on the public health scenario at those times. That is the context in which we are working and it is changing and evolving rapidly.
In regard to rates, the situation will be reviewed further in June. I welcome the initial movement in regard to the scrapping of rates for the three months from March to June. That is positive and I certainly would like to see it happening further into the future if people are not able to get back to anywhere near normality in regard to their businesses. This is something we will be working on and liaising on with our colleagues in the relevant Department.
In regard to the grants issue the Deputy raised, any supports that can be given to enterprises that are viable to help them to get through this period, our Department is, of course, seeking support to deliver them.
The Deputy referred to an extra bank holiday. Coming from a county that is so dependent on tourism, I have felt for a long time that an additional bank holiday, either in the earlier part of the year or the tail end of the year, would be very helpful. I see the economic benefits that come from bank holidays. The tail end of the year would probably be better as we have a lot together in the early part of the year with St. Patrick's Day, Easter and May.
I agree that no plan is a simple one. There are no simple solutions. There are moving parts to all of this; I accept that. We also have to accept, however, that there are some sectors that will be much more adversely affected than others, and tourism is one of the obvious ones. There is a need for a bespoke solution for tourism, separate from what is being put in place for other sectors. The Minister of State is correct in what he said about the south east. In the aftermath of the last economic crash some regions pulled themselves up from their bootlaces by putting in place plans and economic drivers to build capacity in their regions. In the south east, tourism was a key economic driver. It has been badly affected and the supports I have called for need to be put in place.
The economy in Kerry and along the Wild Atlantic Way has been destroyed by Covid-19. Disadvantaged by peripherality, Kerry is more dependent on tourism than any other county. In every category of the Southern Regional Assembly and the Covid-19 Regional Economic Analysis published yesterday, Kerry presents as the county worst affected by the crisis. Nationally, tourism employs more than 300,000 and contributes €2 billion to the coffers. In 2019, 11 millions visitors came to Ireland. Two-thirds of visitors to Kerry are international. This market has disappeared. By and large, the tourism industry consists of businesses that pay VAT at 13.5%, purchase school uniforms for children and pay registration fees and rent for students. Over 14,000, or 20%, of jobs in Kerry are tourism related, the majority of them in hotels and accommodation in a tourist season which has been carefully crafted over many years.
As previously stated, tourism is worth over €650 million to Kerry. The current crisis could cost the county half a billion euro. In the town of Killarney the loss could be in the region of €300 million. The towns of Dingle, Kenmare and Killarney are among the top 11 Irish towns most exposed to significant economic disruption. Domestically, the social fabric of County Kerry has been torn to shreds. The staples of its summer season, including Listowel Writers' Week, a possible Munster final, Puck Fair and the Rose of Tralee have all been cancelled. The concerts, the colour and all events have been obliterated.
Kerry County Council, which advises on grant aid and start-up through its excellent local enterprise office, LEO, and helps businesses to adapt and survive, is the driving force and chief sponsor of many festivals. It is planning a series of greenways which will be the envy of the world, from Kilmorna to Ballyroe, Tralee to Fenit, Glenbeigh to Renard and the Big River Walkway in Tralee town. These will be walkways for tourists and locals alike. Kerry County Council is anticipated to face a budget shortfall this year of €25 million, almost 20% of its annual budget. Crisis meetings are taking place, probably as we speak, to avoid near bankruptcy of Kerry County Council. The required matched funding of 25% for vital projects such as the Tralee-Fenit greenway, the urban regeneration and development funding for Tralee town centre, and the redevelopment of the old Denny site, is now in danger. The long-term affects of this crisis cannot be overstated. The small family-run hotels, restaurants and town centre businesses in the west, which are the backbone of the economy, are totally deflated. Recent start-ups and coffee shops, retail outlets and bars may not reopen, and the greyhound stadium is closed. I ask the Minister if State, if social distancing can be properly observed, to consider an earlier opening for the greyhound stadium.
Ó Chuas an Chaisleáin go dtí an Caladh-Portmagee, ón gCoireán in Waterville suas go dtí Corca Dhuibhne in iarthar Chiarraí, suas go dtí Baile an Bhuinneánaigh, tá toradh Covid-19 i bhfad níos measa in áiteanna atá ag fulaingt leis an iompar poiblí is measa in Éirinn. Ní bheidh na hoibrithe séasúracha taobh amuigh den scéim PUP, pandemic unemployment payment, in ann stampa a chur suas le haghaidh a gcuid saoire agus ní bheidh siad in ann cíos nó a dtáillí coláiste a fháil. Tá formhór na hoibrithe sna hóstáin agus sna tithe tábhairne sa chaoi chéanna ó bhliain go bliain agus dá bharr sin ba chóir go gcuirfeadh an Rialtas iad sa scéim nua PUP. Is cinnte go leanfaidh an damáiste seo ar aghaidh.
Unless drastic action is taken, this damage will continue and it will be 2022 before a full recovery is realised. The seasonal worker, the short-term leaseholder and the start-up are uniting and demanding that the tourism sector be supported. While I welcome the Government aid package, two-thirds of it is reserved for medium and large enterprises with 250-plus employees. Most of it will not apply to small business. The restart fund targeting micro and small businesses, which are the backbone of the economy, is crucial. The finer details of the scheme will no doubt be developed by the relevant Departments in the coming weeks but, to me, it seems totally inadequate. We must provide employment grants in the form of wage subsidies so that workers will be paid and the industry can survive. Grants for Covid-19 required infrastructure must be considered. Domestic holidays must be incentivised, perhaps by way of a voucher scheme.
While the commercial rates rebate or waiver is welcome, a three-month rebate is not enough. The local authorities, particularly in Kerry, must be subsidised by way of a vastly increased subvention. I ask the Minister of State to commit to an increased subvention for Kerry County Council or a waiving of the matched funding requirements so these vital walkways and greenways can be put through. Tasked with the job of creating employment in a county where IDA investment is not as large as in other counties, the council should not be shackled by continued lack of funding. Some funding must also be reserved for the self-employed, similar to the scheme introduced in Stormont by the Minister, Conor Murphy, for the self-employed and those working from home, who have no history of a rates base. Inshore fishermen should also be facilitated within the recent scheme. The rebates, however, cannot be entirely State-led and insurance companies which, not surprisingly, have behaved as badly as some landlords in this crisis, must provide refunds on at least a pro ratabasis.
Only a fair scheme prioritising the interests and rights of cleaners, bar staff, tour guides, coffee shop employees and bus drivers will do in a county which was the birthplace of the great Mike Quill, the union leader. The interests of the workers and workers' families must be the priority.
I hope to speak for five minutes and the Minister of State might answer my questions for five minutes, if that is okay. I very much welcome the Minister of State's address to the House on the impact of Covid-19 on Irish tourism and his plans to support the sector in recovering from this crisis. First, we must think of the more than 1,300 people who have passed away from Covid-19 and our thoughts are with their families and friends, as well as those who are recovering. Again, I want to pay tribute to the front-line staff and all who are working so hard in this crisis.
To come back to the tourism sector, in Sligo-Leitrim, where I come from, tourism makes a vital contribution to the local economy. Before the crisis, it supported 4,900 jobs and generated €178 million in local tourism revenues. Sadly, some 90% of hotels are now closed, which is creating enormous uncertainty for the owners, employers and employees. We know what the Wild Atlantic Way has done in recent years but when I look at Enniscrone, Strandhill, Rosses Point, Sligo town, Mullaghmore, Bundoran, Ballyshannon, Rossnowlagh and Carrick-on-Shannon, I can see there is huge uncertainty. One area where I was involved is Lough Key Forest Park, where the local authorities have become very involved with what I will call the necklace of tourism providers in the region, and Roscommon County Council and Sligo County Council have worked with Coillte and others. We need to be very conscious of this aspect.
With regard to caravan and camping sites, there is a huge issue in that they were the first to close and, unfortunately, they will be the last to reopen. Many hoteliers and restaurant owners have been in contact with me as they are very unsure about the future of their businesses, as things stand. They welcome the business supports, the wage subsidy scheme and the rates alleviation but they need greater clarity to plan ahead. We need to help them to understand the measures better.
I have several questions. Will the Minister of State support calls from the different industry bodies for a 0% VAT rate for the hospitality sector until Covid-19 damage has been rectified? Knowledge of this is vital in order to plan ahead. Tour operators are looking for rates for 2021 and 2022. I appreciate that VAT was reduced from 2011 but we are already 4.5% ahead on VAT when compared to countries such as Germany. Does the Minister of State believe that, following on from the crisis in this sector, and as we are about to enter Government formation discussions, there is a need for a dedicated Minister for tourism, given the sector's importance to the economy, especially in rural areas such as along the Wild Atlantic Way? We need to start thinking of a dedicated Minister for tourism.
With regard to the roadmap, there are a number of outstanding issues which the industry does not understand and on which it needs clarity. These include the question of the opening of hotels on a limited occupancy basis, with a number of people per square metre, and with this number increasing over time. We do not know what this means for the bars in those hotels and there is also a huge issue in regard to social gatherings and weddings.
The Minister of State said he will work with the sector, which I have no doubt he will, but we need people at the table who are able to make these decisions. I hope a Government will be formed, and in whatever Government we have, we definitely need a dedicated Minister for tourism at the Cabinet table.
I thank the Deputy. Around this time last year, I was up in his constituency with him and I would dearly love to be able to go back there again. It is a fabulous part of the country with huge potential. Massive progress has been made in recent years and I hope we can drive it further.
To answer a couple of the questions the Deputy asked, with regard to VAT my view is that while it is a matter for the Department of Finance primarily, in the current context a 0% VAT rate would be appropriate for the industry. To answer the question directly, I absolutely echo the calls from various bodies. These days, I spend most of my life on the phone to people in the industry whom I have met over the past three years and gotten to know. There are great people in the industry. These are issues we are constantly discussing. It is something that is necessary to give us a fighting chance to recover as quickly as possible and take on the significant international competition. It is only when we go to events such as the World Travel Market in London or ITB Berlin and see the huge number of exhibitors from throughout the world that we realise how competitive it is for Ireland and how well we do relatively speaking as a small island with regard to the numbers we attract every year. We were up to almost 11 million before this happened. I hope we can get back there again.
With regard to dedicated Ministries, many sectors will need intensive work to get them going again and tourism will be no different. The size of the tourism industry is enormous, comprising 11% of the workforce, and this is very important. I am not Taoiseach yet so I do not get to decide which Ministries go where but it would be very beneficial to our industry and I certainly think it would be a positive move.
With regard to what is happening at present, Tourism Ireland is monitoring its markets but it is not spending as it normally would because people simply are not booking at present because of the huge uncertainty. However, the organisation is making the most of people looking at social media and looking for escapism when they are in self-isolation or lockdown. Tourism Ireland has been very active online in promoting Ireland and imagery from Ireland. Very recently, that imagery included Sligo and some of the cinematography in "Normal People", which was partly filmed there. They had to be selective with the cinematography as not everything is suitable for worldwide distribution from a tourism perspective. Sligo always looks fantastic on screen and Tourism Ireland has been working on that front so that when things start happening again, it will be able to get going as quickly as possible.
With regard to "Normal People", my father comes from Tubbercurry where much of it was filmed, and I like to think we are all normal people down there.
Deputy Harkin will agree with me that one aspect we need to look at is that approximately 90% of businesses in Sligo are tourism-related. I found it incredible that one hotel was paying between €75,000 and €175,000 in rates a year. This is absolutely enormous. Sometimes as politicians we do not fully grasp the tourism industry. Not alone does it provide employment, bring people to the regions and make us all feel very proud but it also makes a contribution to local authorities through rates. It is wonderful. The amount paid by the hotel was exorbitant. If these hotels and tourism businesses are not supported, the loss to the taxpayer and local authorities will be significant. The contribution they are making really struck me.
We know the system of rates we have traditionally is probably not responsive to the modern economy in certain areas and certainly needs further modernisation. We know as well that those bills are crippling for many enterprises. We talk about remaining competitive but it is very difficult to do so when, before it starts at all, a business has those types of bills to pay. That is why I very much welcome the decision that was made on the scrapping of rates for the initial three months. As stated earlier in response to a previous question, that will be reviewed as the situation evolves. The roadmap we announced on Friday is just that. It is subject to change depending on how the overall health situation evolves. We hope that if we are looking at any changes, it will be moving forward the phases but that is not guaranteed. The one predictable thing about viruses is that they are terribly unpredictable. That is unfortunately the space we are in.
I am sharing time with Deputy Noonan. We now know that our tourism industry will not have a summer season this year. As a result, we urgently need to plan for the following year instead. We have a chance right now to redefine our tourism strategy and how it will work for us in the future, especially for areas outside Dublin. Ireland is divided in the country, with a few high-profile tourist attractions which are isolated from the nearby villages and towns where many of us live. It was great last year to see the Destination Towns scheme operated by the National Tourism Development Authority. Many regional towns and cities, including my city of Limerick, benefited. However, the scheme was hampered by a narrow focus. It did not have an integrated approach to our destinations. Many wonderful rural towns and villages lost out because of requirements in the scheme that winning destinations had to already have 300 tourist beds to qualify, together with a standing large tourist attraction. There can be no doubt that there is great potential for tourism to be a strong driver for regional development but only if we break down the barriers between what is good for people living in the regions and what is good for people visiting them. My point is that vibrant towns and villages are needed for both residents and tourists. Tourism and regional development policy must have this core principle as its premise, taking advantage of the rich built, natural and cultural heritage in our regions.
Will the Department run a scheme similar to the Destination Towns scheme in order to aid the upcoming crucial 2021 tourist season in Ireland? Will it work with other relevant Departments to make sure that our small regional towns and villages are eligible to apply, so that both the residents of and visitors to these towns and villages benefit from the development and maintenance of their public spaces, market squares and historic streets?
The Destination Towns scheme was an important landmark in terms of how we do tourism. Regional dispersal of tourists was very much at the heart of the thinking behind the scheme. It was, first and foremost, administered by Fáilte Ireland. As an initial attempt in that sphere, it was very positive. It was only in December that the successful towns were announced and, unfortunately, only a matter of weeks later this outbreak occurred. All schemes such as Destination Towns would normally be measured in terms of the expenditure, as to whether value for money has been recovered by the towns and, therefore, by the agency in terms of the money that was granted. It will obviously be difficult to measure the impact this year of Destination Towns grants that were announced at the end of last year. Certainly the way ahead for tourism on this island has to be very much about the less well-known and more off-the-beaten-track destinations, those places where one can get the authentic experience but also where one is not contributing in a negative way to the lifestyles of people who live in those areas.
The great southern greenway in Deputy Leddin's own county and into Listowel also has the Tralee-Fenit element. There is a great opportunity for all of that to be linked up and for further progress on the Deputy's side of the city and beyond. There is a massive opportunity there, especially with the Shannon. These are the types of things I would like to see happening into the future. This seismic shock event has changed everything. All our future plans will have to be looked at. Everything that we plan to do and what we had planned to do for tourism into the years ahead will have to be reassessed and re-evaluated. Of course a lot of money will be required to stimulate activity in the sector at our current level and from a capital perspective. When we look at the space in which consumers may be into the future the outdoor and less congregated settings will become even more important. These are the issues we will look at. I will go back to Fáilte Ireland and look at the work it has done to date with what it had intended to do to follow up on destination towns. I ask Deputies to bear in mind that because of what has happened it is hugely impacted by the fact that we have not yet gauged the effectiveness of the scheme.
I put it to the Minister of State that following the economic crash of 2008-2009 agriculture and tourism were the two sectors that led the recovery of the Irish economy. Unfortunately, with Covid-19, tourism is now taking a sustained hit from which it may never fully recover. We have heard Deputies talk of their own counties, and in my constituency of Kilkenny city our economy is largely based on tourism and festivals. Just last weekend we would have had our roots festival. They need to be supported to survive and that is very important.
We hear that the staycation should now become the mainstay of Irish holidaymakers. It is the patriotic thing to do. It is the safe thing to do and is hugely enjoyable. Many of us have yet really and truly to discover Ireland. It is also the climate-friendly thing to do right now. Outdoor activities and safe spaces will be more attractive as tourist options for local communities as we emerge from the pandemic. Will the Department continue to fund the outdoor recreation infrastructure scheme, ORIS? Will the Department continue to look at the greenways and blueways, which the Minister of State has just spoken of, many of which are shovel ready? Local authorities will find it very difficult to find the match funding and the Green Party believes that we should be looking at 90% funding for those projects. They will add greatly to the local economy and add greatly to construction jobs. A call for ORIS projects is expected this month and local authorities will struggle to meet the match funding for those projects.
Local authorities will continue to try to support festivals. Hopefully the Kilkenny Arts Festival will still take place in some form but it and the Galway Arts Festival, among others, will struggle this year. Many are trying to adapt to using social distancing, or simply cannot adapt and will not go ahead this year. If we support them to trade through this year and to survive into next year they will continue to support local economies. I refer the House to an excellent document, commissioned by Fáilte Ireland and penned by Justin Green, Let's Celebrate - the Cultural and Economic Contribution of Live Entertainment Events in Ireland, which illustrates the economic value of this tourism to Ireland. Every €1 spent in the local economy has a multiplier of another €4 in return.
Deputy Leddin spoke of destination towns. It is important that Fáilte Ireland takes a much more proactive role in our planning system, and especially in becoming more vocal in commenting on the destruction of natural and built heritage. We need to look at more collaboration at strategic level and at the link between policy proposals for built and natural heritage. Fáilte Ireland should play a key role in that. We should also be looking at environmental and sustainability indicators around the impact of tourism and the promotion of the EU Ecolabel flower logo for ecologically conscious visitors.
I ask the Minister of State to look at the disproportionate spend by people who travel abroad with €5 billion spent on foreign holidays and a €2 billion spend on domestic holidays. It is time to flip that figure now. We need to do this. It is the right thing to do to help and support all our local businesses and our local tourism industry that are so dependent on visitors going forward.
The Deputy is absolutely right. The huge amount of spend by Irish people going abroad to holiday is something that over the years we have been doing our best to tap into more.
Our people in Fáilte Ireland do significant work in that regard to try to keep people staying at home - buzzwords we are hearing an awful lot more of lately. That is why, just before this crisis hit us, we launched a new advertising campaign to try to encourage more of that for 2020. Unfortunately, that space has shifted considerably since then.
There is no intention to move funding out of the outdoor recreational infrastructure scheme. It is administered primarily by the Department of Rural and Community Development but we contribute to the scheme. It has helped many areas and I would like the collaboration to continue into the future.
Similarly, in the case of greenways, I will speak to the people in the Department who deal with them. As the Deputy will know, last June our Department announced significant funding for a number of greenways around the country as part of the national greenway strategy, which kickstarted the development of strategically located greenways and high-value tourism throughout the country. I will ask the officials to engage with the local authorities to get an update on how they are being developed and to talk to any local authorities that may anticipate difficulties in completing the projects.
Tourism Ireland is pushing Ireland's Ancient East heavily. I visited the Deputy's constituency the year before last and announced grant aid for a number of projects in Kilkenny.
I will look further into the matter of the Destination Towns scheme.
The Irish Open was due to be held in Kilkenny this year and it is a great loss to the county. We invest significant sums in the tournament every year because we recognise the value of it. We will have to revisit how we will approach it in the future. The event has fallen victim to the pandemic but it would have been of great benefit to the Deputy's constituency.
I would appreciate if the Minister of State might respond to me in writing with any replies that he does not have time to give here.
It is great that we have an opportunity to discuss tourism. All of us in the House share an immense sense of pride in our country as a beautiful, welcoming and varied tourism destination. As we observe the initial impact of the Covid-19 pandemic, it is clear that tourism is one of the sectors in Ireland that faces a cliff edge from which many of us worry it may not be able to recover. We know now that it is the most impacted sector in terms of the number of people out of work due to the crisis. Figures show that 128,000 workers in the tourism and hospitality sectors are now in receipt of the pandemic unemployment payment, compared with 90,000 people in retail and 70,000 in construction. The figures for all these sectors are eye-watering and I do not think the impact this crisis has had has fully sunk in for many of us. It must also be pointed out that in hospitality and tourism, it is predominantly women workers, seasonal workers, part-time workers and undervalued workers who are impacted.
It is impossible at this point to overstate the scale of the crisis that has engulfed tourism. As has been mentioned by other Deputies, we know that the domestic tourism sector will be crucial to sustaining any kind of tourism industry in the months and years ahead. We are blessed to have such a varied offering of attractions and amenities. We are proud to have been part of the Government before the previous one that was involved in developing the Wild Atlantic Way and the many new greenways. Credit where it is due, the impetus and momentum on the part of the outgoing Government in developing greenways throughout the country in recent years - the Minister of State has been passionate about it - has been excellent. They are just one of the many examples of the sort of domestic amenities we have that are compatible with social distancing and that will be the key to us getting out of this crisis in the tourism sector.
The hospitality and tourism industry is vital to Ireland and it is key that we work to keep it going. Its workers have some of the most precarious working conditions and pay of any sector in the country. We must ensure that any Government finances used to help the industry recover include agreements on employment legislation to ensure a fair living wage and fair contract hours, as well as the fundamental right to union representation and collective bargaining, with no option for businesses to ignore or disregard that right. As we all know, during the previous crisis beginning in 2008, the hospitality sector received support from the Government and the taxpayer in the form of a lower VAT rate. That was key in helping the tourism and hospitality industry sustain itself and recover. As Deputy Noonan said, along with agriculture it was one of the key drivers in getting us out of that economic crisis.
The Minister of State mentioned his support for a 0% VAT rate.
We need to be careful about bandying about fiscal policies at this point until we have a holistic approach to getting out of this. We do not need to set expectations that a new Government might not be able to deliver upon. During the last crisis, the taxpayer and the Government purse sacrificed a significant percentage of taxation with the measures that were provided for the hospitality sector and that has an impact on delivering vital public services from which the entire country needs to benefit. These are the key decisions that will have to be made in the coming weeks and months. Any package for the industry must ensure the delivery of a functioning joint labour committee, JLC, for the hospitality sector. For the Labour Party, that is a bottom line. We are open to any other creative measures that will keep the hospitality and tourism sectors alive. We will support those measures with every fibre of our being. We like the idea of a State-funded voucher scheme for domestic hotels and guest houses. This would be a great boost to the domestic economy in the latter half of 2020 and beyond into 2021 but we need to see a JLC as part of any agreement.
With the roadmap out of the Covid-19 restrictions having been published, it is good to see some light at the end of the tunnel with some of the activities that will benefit our internal tourism economy. We know golf will be resuming under social distancing restrictions and, hopefully, as further restrictions are lifted, this will lead to people being able to travel within the country for such activities. I commend Inland Fisheries Ireland on clearly communicating how the reintroduction of angling can take place as we move through the phases of lifting restrictions. Angling tourism at its peak is worth €280 million per year to the domestic economy. While such a figure, or anywhere near it, will not be reached this year, salvaging some sort of economic boost from angling tourism will be beneficial. The benefits of angling for mental health and for fostering an affinity with nature and wildlife are well known. The Government should be proactive in encouraging activities such as this, which can be safely practised in terms of social distancing, to help our tourism economy to recover.
We are seeing some anomalies, however, and I know there has been a lot of discussion on when pubs will be reopened. Rightly or wrongly, and probably wrongly, the opening of pubs is seen as some sort of finishing line for the Covid-19 crisis. We know this is not accurate but it demands a clear communication strategy from the Government. For example, there is an inherent contradiction in allowing restaurants with bars to reopen on 29 June but not allowing bars without restaurants to open until 10 August. Like many, I look forward to the day when I can meet my friends in my local pub for a pint but I am in no rush to get there if it compromises public safety. On the anomaly I have just mentioned, we ask that both pubs and restaurants be open on the same day, as long as the establishment in question can adequately meet public health requirements. I am agnostic on when in the unwinding of restrictions that will take place but we need a clear and coherent policy in this regard.
Any return to a long term vibrant and healthy tourism sector will be predicated on the existence of a viable airline industry. I deliberately use the word "existence". We are worried about our aviation sector and there are many people working in aviation who are deeply worried about their future careers. In Dublin Airport today, there are only nine scheduled departures and ten scheduled arrivals, five of which fly to domestic airports. Thousands of jobs depend on the airport reopening but many daily flights are to other EU member states and our ability to reopen the airport also depends on whether those countries have reopened to air travel. We are worried about jobs in Dublin Airport and Shannon Airport. In fact, we are worried about the viability of Shannon Airport due to this crisis. We are worried about jobs in Cork Airport. Both Aer Lingus and Ryanair have projected difficult times and job losses ahead. When An Taoiseach spoke last week about the liberalisation of the airline market and how this has benefited workers and customers alike, we have to disagree. The liberalisation in the free market of any sector has led only to an increase in the wealth gap in many countries and has further condemned workers in those industries to fewer protections and further economic inequality. That is how the workers in these airlines are feeling now. They feel unprotected and vulnerable. That is why I need to ask, in light of the recent reports of massive lay-offs of workers in the aviation sector in companies such as Aer Lingus and with concerns about the DAA, is the Government willing to ensure the wage subsidy scheme will be extended for a longer period as we transition towards life with the Covid-19 pandemic? It must be also noted that companies such as Aer Lingus and Ryanair are some of the most cash-rich companies in the global airline industry. Therefore, a combined approach to protecting workers between the State through the extension of the Covid-19 wage subsidy scheme and with the companies through the companies' own cash reserves, needs to be found.
With so much cash on reserve in these companies we need to ask why they are planning to lay off workers. The only conclusion we can draw is that these companies are seeking to protect those private properties over the ability to maintain the employment of a dedicated workforce. Has the Department liaised with the Department of Communications, Climate Action and the Environment? Going back to my original point in respect of tourism, in this sector where low wages are quite prevalent, will any bailout of industries there be tied to employment legislation to ensure the industry puts much greater value on the jobs within it and pays a fair wage to its workers?
-----and some of the questions are primarily for ministerial colleagues. I will relay the questions that are more appropriate for other Ministers directly to them.
With regard to the pubs and restaurants, we are open to suggestions from the industry players regarding how they can operate safely and we are engaging with people in the industry to see if this can be done. Speaking as somebody who ran a pub for three years in the past, it is a very difficult environment in which to put in place the social distancing that would be required, but that is not to say we are not open to suggestions and ideas on how it could be possible. We want to try to be fair to everybody. These are matters we are working on. It is similar with regard to sports. The Deputy referred specifically to golf. We have been working with all the national governing bodies in sport on developing plans for how their activities could return as soon as possible but, again, public safety and health are at the heart of everything we are doing. These are things that are critically important to people's well-being and have a huge economic impact as well. We will continue that collaboration.
This is the first debate on tourism in the Thirty-third Dáil. Previously, it would have been difficult to imagine that we would be having this type of debate. I accept that a crystal ball is required to some degree in terms of what is likely to be the timeline for dealing with this virus in a way whereby we will not be talking about it because it is in the past. We must ensure that businesses get back to operating, but do so safely. A message comes out of that as well because it reflects on the country in terms of a place to visit for people who will want to come here. We are looking at places such as New Zealand, which dealt very well with the coronavirus. It has almost highlighted that country from that point of view.
The other issue is that we must ensure people are able to return to work and that there is the least amount of permanent damage to a very important sector of our economy. I have listened to Members talk about different parts of the country and how tourism is different. The hospitality and tourism sector reaches into every part of the country. Fáilte Ireland says it is a €9.4 billion industry employing 260,000 people. That is absolutely enormous. Now, many people are out of work and some of them are lucky to be on the subsidy scheme. Some businesses are staying open even though I do not believe it is entirely viable. For example, one sees restaurants doing a take-out service. There should not be a disadvantage to them if it comes to a rates relief because often it is about keeping somebody employed, keeping suppliers and maintaining that chain. Small things like that are going to be important and we should not disadvantage them.
It will be essential that the task force the Minister of State spoke about is not exclusively about the business side, the Department and organisations such as Fáilte Ireland. The employee side is critical.
There are some very vulnerable employees in the hospitality sector. Very often, they are temporary workers or low-skilled workers. There are many women employed in the sector. It is important that the recovery be just. I am supportive of alterations to VAT and excise duty but they must recognise that if we are all in this together, very vulnerable workers must also be included. We will want to see their jobs back. There will have to be job-rich growth when there is a return.
Some measures are being criticised by stakeholders as unworkable. That is partly why we need a task force with practitioners from all dimensions who know the industry. It may be some time before the tourism sector is fully back. Concerts and sports events must be borne in mind in this regard. They are a big tourist draw. Essentially, they are at some considerable distance from having permission to safely return. Reopening a hotel without having the bar open might make reopening unviable. With sports clubs and golf clubs, it is the bar, amenities and societies that make them viable. Therefore, it is important to have the task force up and running as quickly as possible. The Minister of State might give us his thinking on that in his response.
There are small points that must also be considered. The Minister of State referred to space in his contribution. Quite an amount is paid to put chairs on the street. Nearly €1,000 is paid to put a table and four chairs on the street in the city centre. These matters will need to be addressed if space is to be provided. It will mean a loss of income for local authorities. The rates initiative will also mean a loss for them. There is a consequence to this. What dialogue is there between the Minister of State and the Minister responsible for local government? What is being thought about? The loss of income has a knock-on effect with regard to some of the initiatives local authorities can take in this sector. The Minister of State might address some of the points on the task force with regard to employees and rates.
A conversation like this was unimaginable just a few short months ago, when we had almost 11 million visitors to the island last year. This is where we are, however.
It is important that a task force developing a plan have as much expertise but as few people as possible. The task force needs to be workable but at the same time it needs to have experience. My view is similar to that of Deputy Catherine Murphy in that the perspectives of the various parts of the industry need to be reflected. No part can operate without everybody working together so it is important that those on the front line be represented. These are discussions that are ongoing in the Department, including between both Ministers in the Department. It is important that we get this happening as quickly as possible and get as many heavy hitters in the group as possible because business worth billions of euro will be at stake over the coming years. The work of the task force and the subsequent plan are important in terms of the level of recovery we can achieve. I would like to see a group that acts well together but that is at the same time as representative as possible, comprising a broad cross-section of the industry.
That is what we have tried to do so far in the group we have already convened in this survival phase. We have tried to bring people in from the bed and breakfast sector as well as people representing coach tour operators, hotels, pubs, restaurants, the aviation sector and from a broad range of sections within the industry and I want to keep working on that.
As Deputy Catherine Murphy indicated, rates are a matter for a different Minister. I have been in contact with the Departments of Finance and Housing, Planning and Local Government about my feelings on rates. We cannot just leave local authorities high and dry. If local authorities are not collecting rates they will have to be compensated. The types of projects we discussed earlier such as greenways that we know will be integral to a future recovery plan cannot be jeopardised, as we will need them to act as catalysts for economic activity. We need appropriate economic activity in areas such as outdoor recreational infrastructure. These are the parts of the jigsaw that will have to slot together if we are to have a recovery plan that works. The discussions will be ongoing. I am very cognisant of the need for local authorities to be funded. As a former member of a local authority I know the money has to come from somewhere and if it is taken from one from source it must be replaced or cuts will be required to services or the type of infrastructure local authorities provide or service. In a recovery phase, that is the very last thing we should do. We need to stimulate activity, not do something that would halt it. The discussions will continue but I will advocate strongly for a fair deal for local authorities as a result of any much needed help that is given to people operating in the tourism and hospitality sector.
Unfortunately, 2020 is shaping up to be an annus horribilisfor the tourism sector - there is no getting away from that - as a result of the pandemic. That is the case across the world. Many people in Ireland, regardless of whether they live in rural or urban areas, rely on seasonal work in the tourism sector. Some of those workers are shut out of all Covid-19 supplements and payments. My first question is whether the Minister of State can commit to providing support for such seasonal workers, in particular over the six or seven months of the tourism season that would qualify.
My other question relates to when tourism begins to come back to some semblance of normality. To some degree, the date we are all looking at is 20 July which is when people can travel across the State. When workers are again employed in hotels, bars and suchlike, will they be given a guarantee on their health and safety in particular? Will an agency such as the HSE provide guidance and monitor workers who are in situations where they could be put at risk? At this stage, most people will take staycations, which is a good thing. Ireland is an incredible country that has everything to offer, although sometimes we are a bit unlucky when it comes to a lack of sunshine. That said, it is a beautiful country whether there is rain or sun. My two questions are about support for seasonal workers and guidance on health and safety for workers when they come back into the tourism and hospitality sector. Will the Minister of State provide guidance and a response in that regard?
I will respond first to the question on seasonal workers. While we have had progress regarding people who were on X's and O's at the start of this outbreak, people who had not returned to work were left without the Covid-19 payment. This is something I feel very strongly about. I met many such people in the past three years in my role as a Minister of State. I meet those people who are working on the front line day in and day out through my interaction with hospitality businesses. My father was one of those people for almost 40 years. He worked in the hotel industry. For the first 30 of those years, he did not work until about March and then he worked six or seven days each week right up to October or November.
I met the Ministers for Finance and Employment Affairs and Social Protection on this. Whereas there has not been progress on the matter to date, it is something I will continue to advocate. Ordinarily, these people would be back at work and making a significant contribution to the economy. Many are the unsung heroes of the industry, some having worked seasonally for 30 or 40 years, and they were unfortunate not to have been back working at that time. Many people return to work around St. Patrick's Day but the cut-off point was just before that. I will continue working on this as it is very important. Looking at the numbers in the sector who are out of work due to Covid-19 and those who are either under the subsidy scheme or on the Covid payment, I estimate that there are probably 30,000 or 40,000 people in that bracket, although I am open to correction. It is very unfortunate for those people. Many will also not be able to get their stamps for next year which has a knock-on effect in 2021 where people are not working now, and there are also people whose jobseeker's payment entitlement will be running out. The Department has given me a commitment to address the issues which might arise in 2021 around this but I would like those people to be included in any future extension or longer term arrangement. We cannot allow those people to go without payment.
On workers' health and safety, we are engaging with all people in the industry to see how they can safely return to their normal activity. Health and safety of employees must be at the forefront; it is quite simple. As consumers, few people would be comfortable in a situation where their own health and safety is not guaranteed and that is difficult if one is not also ensuring the health and safety of the people working, due to the nature of the virus which is transmitted so easily.
We are an island nation. We cannot have a fully rounded discussion on tourism without discussing the aviation industry and air connectivity. Questions on that must be directed to the Minister for Transport, Tourism and Sport first and foremost, but I wish to raise some points during this debate as it is greatly relevant to tourism.
Two key airlines in this State, Ryanair and Aer Lingus, have been heavily impacted by the coronavirus crisis, as has every airline across Europe and the globe. Ryanair has spoken of 3,000 redundancies, a 20% cut in pay for employees and the closure of bases throughout Europe. Aer Lingus has spoken of a 20% cut in its workforce, approximately 900 people. There should be no job losses and no cuts in income for people working in the airlines. Companies such as Ryanair are in a position to absorb those losses. Ryanair has lost out to the tune of €300 million due to coronavirus. It made €1 billion profit last year. If it says it cannot afford to keep 3,000 jobs or to maintain wages, then I say we cannot afford to keep these companies in private ownership, run on a for-profit basis. They should both be nationalised and combined into one publicly owned national aviation company. I favour paying compensation but on the basis of proven need. Since 2008, Ryanair has paid out €6.8 billion in dividends and share buy-backs, most of them to the idle rich.
Aer Lingus paid €225 million in dividends in 2018 alone. I agree absolutely with compensation for worker pension funds euro for euro and cent for cent, but not at all with compensation for the majority who have benefited from the bonanza during the past decade. Not one cent should go to them.
I believe a publicly-owned aviation company in this country would not only be good for tourism but also for facing the climate challenge that the State and the globe will face in the coming ten years. If we cut out the profit motive, we are in a far stronger position to organise a just transition with a reduction in air travel and maintenance of jobs and living standards in a reasonable fashion for employees. That will not be done with a for-profit model. It will not be done with the likes of Michael O'Leary at the helm. It can be done. It is a challenge but it can be done on the basis of public ownership and democratic control.
My final point is on democratic control. We are not talking about public ownership the likes of which we had with the banks ten years ago where they were nationalised but still run in the interests of the rich and the establishment in society. We need industry run in the interests of the majority of the working people. That means public ownership with democratic control, worker control and worker management. I will leave it at that.
I will convey the Deputy's suggestions to the Minister for Transport, Tourism and Sport. He primarily deals with aviation issues. I will ask him to follow up.
We always have to bear in mind that our airlines are key partners when we talk about the tourism industry. As an island that attracts approximately 11 million people every year, those coming from overseas have to come either by ferry or by air. A well-functioning aviation sector is really important. It is important that we strike a balance in terms of making this country an attractive place to locate routes. We know that an important part of our success in recent years has been the increase in routes that we have had and the frequency of flights in and out of the island of Ireland. It will take a long time to recover.
I will speak and then raise some issues and ask the Minister of State to respond at the finish. On behalf of the Regional Group, I wish to continue to extend sincere condolences to the families and relatives of those recently bereaved because of Covid-19. We offer solidarity for those in recovery. I congratulate our wonderful healthcare workers for their efforts. Our continuing debt of gratitude to them can never be overstated.
2020 is presenting the most significant of challenges to our national economy. Nowhere is this more evident than in our tourism and hospitality industries. They largely comprise privately-owned small and medium-sized operators. They have provided our national and rural economies with a sustainable economic dividend for many years. Tourism has helped transform the image of Ireland, cementing our reputation for business and social interaction. A wide range of enterprises draw business from our tourism sector, including retailers, pubs, restaurants, entertainment venues and public transport operators. The tourism and hospitality sectors have seen steady growth year-on-year shaking off the effects of the financial crash. Dublin, the south west and the north east generate the most visitor numbers but destination events and activities in the regions have helped to create a pull factor to garner revenue share as well.
In 2019, overseas tourist visitor numbers to Ireland topped 11.2 million. More than 5.6 million of these visitors came on an extended holiday. These visitor numbers support much of Ireland's commercial tourism offering, including its 7,200 pubs, 3,100 off-licences, 2,400 restaurants and 983 hotels. Employment in the sector pre-Covid-19 was estimated at 260,000 people. It was generating annual revenues of €7.5 billion with net tax receipts to the Exchequer of €1.9 billion. Nothing, however, could prepare the sector for the impact of coronavirus, which has devastated the medium-term outlook. These impacts now represent a mirror reflecting the challenges facing the entire SME sector in Ireland. The tourism and hospitality industries have been among the first to close, thereby cutting off all available revenue streams. When green-lighted to open, international visitors will be absent because of travel safety and financial concerns impacting on their countries.
The development of a vaccine, triggering a restoration of financial and business confidence in customer countries and here at home, appears some way off. The only clear pathway to sectoral recovery in Ireland is domestic market activity. This will be hampered with the restrictions of Covid-19 management. Social distancing requirements, for example, will reduce customer numbers, thereby reducing the consequent revenue return available. Without a seismic change in current national financial planning regarding the overall SME sector, Ireland Inc. is heading for an employment meltdown and consequent economic damage that could last for a decade or longer. Solutions are being offered for the tourism and hospitality sector, where 175,000 workers have now lost their jobs. I ask the Minister of State to consider the following suggestions proposed by industry experts with whom I have recently consulted. They highlight ten key areas for immediate strategic review.
The sector needs a task force made up of trade representatives from hotels, restaurants, airlines and State bodies. I welcome the Minister of State's commitment to that. I hope to see it expedited as soon as possible. There should be a reduction in the VAT rate to 0% for tourism and hospitality for the period of the crisis and for 12 months thereafter, then reverting to 9% for a period of five years. There should be rent legislation to protect commercial leaseholders, a rents incentive package and a scheme such as that France has implemented, namely, the 60-20-20 scheme, whereby Government supplements rent by 60%, the landlord reduces rent by 20% and the commercial tenant pays 20% for 12 months of the crisis. Insurance reform is required. Payouts under business interruption and notifiable disease clauses are required. There should be forbearance in policies for the period of closure and no suspension of cover while businesses are closed. Wage supports should continue for restaurants and the hospitality sector until a vaccine is found. There should be support for people over the age of 66 and seasonal workers in the wage subsidy schemes. There should be a liquidity grant package through the Department of Business, Enterprise and Innovation to cover outgoings in the first six months following the return of normal trading. There should also be a commercial rates write-off for restaurants and the hospitality sector for the full crisis period until a vaccine is found. I welcome the three-month deferment but it is, unfortunately, not enough. There should be a ban on utility providers cutting off services and demanding payments when businesses are closed and a review of standing charges for the closure periods. In addition, our bankers need to provide a suspension of banking fees for the hospitality sector. Interest on loans should be at the ECB interest rates, and a moratorium on existing loan repayments should be provided. Finally, there should be a waiver of licences for outdoor tables and chairs for one year in order to enable businesses to reopen and adapt to social distancing by using outdoor spaces. If I may add a suggestion of my own, I would like to see the Minister of State's Department lead on a "buy local, spend local" campaign as soon as possible to support local indigenous businesses.
The financial packages at present under consideration do not meet the needs of the SME sector or the tourism and hospitality sector. These businesses need money injected by way of grant support to compensate them for acting in the national interest. They cannot sustain more debt. They need deferments and incentives such as those I have mentioned to allow them repair their businesses and adapt to the new commercial realities of life after Covid-19 but before any vaccine becomes available.
We socialised an extraneous debt in 2011 for our financial sector. We took that decision not to save lives but to prevent financial contagion to the wider economy. We now face a similar dilemma but for very different reasons. To preserve life we place the economy into an induced coma. Having done so we must now resuscitate it and support it in every way to see it fully recover. The tourism and hospitality sector is a mirror that reflects the wider difficulties in our SME sector, which employs 70% of our present working population. We need to make dramatic financial provisions in order to resuscitate our economy successfully. Government mobilised a war effort and used all tools at its disposal to fight Covid-19. It must now demonstrate the same singular purpose and vision to support financially our tourism and SME sectors to secure an enduring, sustainable economic revival.
I appreciate the Deputy's interest in this topic and the suggestions he made. We have referred to many of them throughout the course of the debate. I appreciate that everybody is coming at this in good faith in their suggestions and ideas for supports for business.
However, we cannot lose sight of the fact that all of these suggestions and elements of assistance for businesses will come at a cost that will have to be paid by somebody. All of that money needs to be paid back, whether by the local authorities or the Government. It is important that there would be a business case for those interventions and proposed measures that are being looked at, whether in the short, medium or long term. We cannot lose sight of the fact that businesses will require assistance but there must be a balance struck in terms of how much the State spends to try to return to some level of normal activity, when the State spends that money and where exactly it is directed. That is the key challenge and having a plan from the tourism sector that is backed up with strong economic arguments about the types of supports that are needed and how they will generate further economic activity and make sense will help everybody in the sector. I am keen for that to happen as soon as possible.
I am from the south west and know that the regions and other rural areas will be slower to recover from this crisis. The areas most likely to recover quickly are around Dublin, although that remains to be seen and factors such as population density might have an effect. For many rural communities, tourism is the only show in town. There may be some agriculture and fishing businesses but tourism is a lifeline for many enterprises. There must be a targeted response to ensure those areas are supported.
I am keen to see further utilisation in the future of our fantastic coastline from Dublin to Cork. We have seen how important the Wild Atlantic Way has been for many communities along the western seaboard and there is potential to do more with the coastline running down the east and south east from Dublin to Cork. That is just one idea among others I have heard but it would be positive for Deputy Shanahan's area and would complement the Waterford greenway, to which we recently gave further funding to enable it to extend. I had the pleasure of cycling the greenway two years ago. Areas such as that will benefit in the post-Covid-19 era.
There can be no doubt that tourism is one of the sectors that has been most adversely impacted by the Covid-19 crisis. On 5 March, the Minister for Health made a statement on the floor of this House recognising that fact. At that time, the Minister noted that the Government was mindful that any sustained period of significant flight restrictions would lead to impacts on tourism and business in Ireland. That has come to pass.
I acknowledge the fact that the Minister for Transport, Tourism and Sport, Deputy Ross, and the Minister of State, Deputy Griffin, regularly convene a meeting of the Covid-19 tourism monitoring group to assess the disruption to the sector. The group has been in contact with public transport operators, the National Transport Authority and other transport operators.
Fáilte Ireland is creating a set of operational guidelines to help businesses when they reopen at the appropriate time. As I understand it, these guidelines will be published in the coming weeks to provide advice on various systems that can be adopted and will help instil public confidence and reboot business while adhering to Government and public health directives. In terms of the grants that are being rolled out to help businesses, small businesses are telling me that they will be landed into more debt and more supports are needed. I understand that this is a difficult time and that decisions need to be made but it will be more productive in the long term if we give small businesses more supports rather than grants that will sink them deeper into debt. That will also help the economy in rural regions.
Fáilte Ireland has known since at least early March that the tourism sector was going to be badly hit.
We now have a statement issued in the past few days telling us that it will be weeks before it rolls out advice to local tourist operators. It must have been possible to have a strategy developed at greater speed than that. I am aware there is a huge frustration in regard to the delay.
We have also seen the recent report from EY Ireland which acknowledges that the rural economy will be disproportionately impacted because it is dominated by two sectors - agrifood and tourism. The EY report goes on to note that the development of Irish tourism is at the heart of Project Ireland 2040 aspirations to build a more sustainable and resilient economic model, less dependent on Dublin, with a higher focus on indigenous rather than multinational businesses. All of that is now at imminent risk of collapse thanks to the devastation that is being experienced in rural communities.
I welcome the fact that the following concerns have been raised by the Irish Road Haulage Association and the Freight Transport Association of Ireland. The Department of Transport, Tourism and Sport has also liaised with ferry companies in seeking to ensure that, insofar as possible, HGV drivers are not at this time required to share cabins with other drivers and that, where that is not possible, HGV drivers are offered reclining seats. That is a sensible and pragmatic approach but what we need is more collaboration from the stakeholders since they are the experts. I acknowledge that the Minister of State mentioned that there were some stakeholders represented on the committee but more are needed. Some sectors believe they are not properly represented.
In terms of the response of the insurance sector, and particularly the airline sector with respect to refunds, I think the Minister of State will accept that the response has been far from ideal. As he will be aware, under EU regulation 261/2014, airlines must reimburse passengers whose flights are cancelled with the choice of a refund or a re-routing within seven days. I note that Ireland co-signed a letter with 13 other EU members calling on the European Commission to adapt the rules on how passengers can be refunded. That is welcome. The Minister of State might be able to tell us if there has been much resistance to that from the airlines and the European Commission. We have to remember that we are talking about small sums of money in respect of the airlines. Most families will have saved for some time to purchase these tickets. The situation is unfair. They need to receive prompt reimbursement and not just vouchers or the offer of rescheduling flights, which I have seen from some airlines.
Local tourism is what sustains many villages and towns in Ireland, from bed and breakfast accommodation to retail and other services. I hope the VAT rate on the hospitality sector and hairdressers will be reduced to 0%. I believe that approach is needed. We need to take radical action. I stated in the Chamber two years ago that the VAT rate should not have been increased because rural towns and villages did not feel the recovery in the same way as the cities. It was wrong to begin with but we now have a chance to undo that somewhat and support them by reducing the VAT rate for hairdressers and the hospitality sector.
It will take a whole-of-Government approach to deal comprehensively with the particular challenge faced. I can only hope that sufficient measures will be rolled out to respond accordingly and, as I have stated previously, that there will be increased collaboration with the experts from the different sectors.
I am happy to speak on the tourism sector. I welcome the Minister of State's frank comments and replies, and his understanding.
I want to mention at the outset a wonderful, proud Tipperary woman, Nora de Buitléir, who was laid to rest in An tAonach, maidin inniu. She was a powerful woman of song and history. She regaled us mainly in Brú Ború, in Cashel, but also all over Ireland, in this House at the Culture Night events, and all over the world with the Brú Ború tour. Nora was a font of wisdom and a wonderful woman who gave a huge amount of guidance to the young people at Brú Ború every year. She was great fun also. Labhrás Ó Murchú sent his eulogy today for somebody else to read. I sympathise with Labhrás and Una, and everybody involved in the music, song and culture. Nora was a proud Tipperary woman but also a proud Gaeilgeoir and Irishwoman. Ní bheidh a leithéid ann arís.
We all know how important the tourism industry is, in its many facets, as outlined by colleagues to the Minister of State today. The Covid-19 crisis is going to have a massive impact. We must do something to put manners on the insurance companies. Deputies have called many times for action on these issues. The companies show no respect for and no understanding of the hoteliers. We see at the moment that at least the power companies and utility companies are waiving their standing charges. It is about time. However, the insurance companies have just been ripping people off and now the hotels, pubs and roads are empty. We need to acknowledge that there have been no road accidents, thankfully
There are many areas of tourism in Tipperary I would like to mention, going from Carrick-on-Suir up to Clonmel and the new blueway, on to Cashel and its famed rock, and into Holycross, Nenagh, Roscrea and other parts of the county. Where Tipperary leads, the old adage says, Ireland follows. We are ready and willing to get going again, and I thank the Minister of State for his visits. However, we need the supports to do so. We need zero VAT sorted out and more supports rather than loans, because we cannot have the banks breathing down our necks.
There are many other aspects of tourism that one might not even think of, such as educational tourism. Can the Minister of State provide some clarity for education tourism providers? I am sure he is familiar with the foreign students who come to our country every summer for English language courses and exchanges as well as the students who enrol in our secondary schools. Many of the programme operators are now in limbo, like many others, as a result of the current crisis. They do not know whether they are coming or going. One such wonderful operator is Kim Connelly O'Grady who runs Gift Life Experience Limited in south Tipperary. She co-ordinates and facilitates travel arrangements and education courses for up to 200 students from Spain every year, offering a mixture of three-week summer programmes and school placements. We see these students and we get a lot from them. They love it here and get involved in the community and then they send their families to visit. There is huge tourism linked with that.
Kim has highlighted a number of issues to me. She has no choice but to cancel all plans for her three-week July programme due to the uncertainty and also the likelihood that students would have to self-isolate for 14 of their 21 days here. She is currently unsure as to where she stands financially in respect of deposit and flight refunds, as mentioned by Deputy Nolan and others. She is also at a significant loss because more than half of the students who signed up and are pre-booked to start school here in September have dropped out due to the uncertainty. These students contribute a lot to the local economy and our many tourism sites in Tipperary. The company employs four permanent staff and offers many other summer and temporary jobs. I will provide all these details in writing to the Minister of State and I hope he will keep educational tourism to the forefront of his mind.
We must also keep in mind the publicans. The Licensed Vintners Association is out there lobbying, and rightly so, but one size does not fit all. There are many small pubs - the pubs I like to go into - many of them family-run pubs and some of them hundreds of years old, which do not have the same space as the larger pubs. It is the same with other tourism products. Knockmealdown Active, the Rhododendron Walking Festival in Clogheen, Cahir Castle, run by Tipperary Tourism Company, and many other businesses such as those need to be supported. We need to tailor supports, as the Minister of State mentioned, to different-sized businesses and different facets of the tourism industry. It cannot be one size fits all. The vintners lobby is strong but we must ensure that everybody, including non-vintners, are supported.
I am sharing time with Deputy Harkin. I will make a short statement and ask the Minister of State some questions, to which he might respond, before I hand over to Deputy Harkin. All speakers have mentioned the impact the closure is having on small businesses and tourism enterprises throughout the country and the question of how they can reopen in the coming time. A good report was done by the local authorities providing a regional analysis of the economic impact of the Covid-19 environment. It shows that the north west is supremely impacted, perhaps more so than any other part of the country.
I wish to ask the Minister of State about what State measures are in place to assist small tourism businesses in meeting their ongoing costs and enabling them to reopen and stay in business.
The beginning of July has been mentioned as a possible timeframe for the reopening of this sector, but we do not yet know if that will be possible. There could be slippage in regard to that timeframe, depending on the response across the board. This year is impacted severely and probably gone for most tourism industries and businesses. I ask the Minister of State to outline what supports are available to the sector now, following which we can discuss what can be done into the future.
It affects all types of business but, in particular, small peripheral businesses, which tend to be businesses with small cash reserves, which may be the businesses that are slower to attract footfall and revenues into the future. The Deputy is right in terms of being concerned for those businesses. I, too, am concerned for them. The Government has introduced a number of measures across the economy to try to support employers and employees at this time. The Deputy will be aware of the schemes that have been announced, including the wage subsidy scheme and the Covid-19 pandemic unemployment payment. The future of these schemes will be have to be reviewed as the situation evolves.
In regard to the tourism sector, Fáilte Ireland has been working closely with us and affected businesses in terms of preparing supports and assistance for tourism companies and organisations. As part of this work, Fáilte Ireland established a business supports task force and a Covid-19 business support hub, which is available online. The supports available include business liquidity information and advice, human resources advice, temporary lay-off and redundancy advice, how employee welfare can be protected, management of temporary closures, safeguarding future revenues, jump-starting sales, operational guidance, Government supports, brand and reputation and employee well-being. As I said, all of this information is available online and via webinar, which I understand from people have been quite well received. There is also a detailed FAQ section. This is a useful resource to which the Deputy could direct people.
As I said earlier, the overall situation is evolving and so too is the response of Government. In the early stages, a Covid-19 pandemic unemployment payment of €203 was introduced. This payment was subsequently increased to €350. The suite of supports announced by Government on Saturday is just that, namely, the latest suite of supports. We know that further measures will be needed for enterprises, large, medium and small. As the situation evolves, further supports will have to be developed and put in place, not only for the survival phase, which for some will be a long phase, but the recovery phase as well. The supports that might be put in place for survival might be entirely inappropriate for recovery and vice versa. The State will have to continue to move as the needs of enterprises change. From our perspective in regard to the tourism and hospitality sector, we will work closely with all partners to ensure that happens.
As many Deputies have said, tourism and food production are the lifeblood of many rural and regional economies in terms of jobs and generating income. I support the call of many Deputies here today for the establishment of a task force to deal with the myriad issues that will have to be managed as we begin to reopen our tourism industry. As a prelude to that, the Department of Transport, Tourism and Sport needs to meet all of the main players, from the Irish Hotels Federation to the aviation sector, the tour operators and everybody in between and to use that as a template for the task force that is to be established. It is urgent that tourism businesses get clarity around what is going to happen.
As I said, tourism is crucial in rural areas, including in my constituency, and it provides over 30,000 jobs in the north west, in Sligo, Leitrim, Roscommon and Donegal. It is important to listen to what that industry is saying. One of the things it is saying is that while the announcements last weekend were welcome, they do not go far enough. I heard the Minister of State say there are a lot of moving parts, which there are. However, to take the issue of rates as an example, the rebate is for three months yet no tourism business can open before the end of June and that is not even part of the Government's own roadmap. Therefore, these businesses, looking at the scrapping of rates for three months, see that it is no good to them. It needs to be a minimum of six months and, ideally, 12 months, with a guarantee that when they are back in business, they will be paying some kind of pro ratarate, depending on the trade they are doing.
There is also a big issue around commercial rents. There has to be burden sharing between tourism businesses, the Government and landlords, and this applies to businesses across the board. This kind of triumvirate needs to set in place some kind of structure whereby businesses can remain on life support until the opportunity presents for them to reopen.
Other Deputies have asked for a 0% VAT rate and I add my voice to that. I am pleased the Minister of State is considering it and I hope it will be part of the programme for Government.
In response to Deputy Shanahan, the Minister of State said that money has to be repaid and he also said that tourism is the only show in town for many places. It is true that the money has to be repaid. However, I honestly believe that a portion of the Covid-19 debt has to be ring-fenced at European level, whether through corona bonds or otherwise, and put to one side because that is the only way the European economy can be kick-started. If we do not pump-prime tourism projects, there will be no show in many different towns.
I mentioned earlier that tourism needs certainty. These are uncertain times but hoteliers are asking me whether they can book weddings for August and September, what they should do about numbers, does it depend on the floor space they have, do they need two metres between each of the tables, can there be entertainment afterwards and how they manage check-in. Those are all practical details and while we are in uncertain times, we can give more certainty to these businesses about them. I ask the Minister of State to consider that. When these businesses reopen, they will need grant aid because they already have a mounting wall of debt and they cannot afford to examine their businesses to see what needs to be done around social distancing.
I know of businesses which, regrettably, have decided to close their doors. Certain companies, in this case telephone companies and energy companies, are insisting on extortionate penalty clauses of over €400 per company to terminate contracts. While I will not name the companies today, I ask the Minister of State if there is any way his Department or the Government can use their influence to stop these companies basically terrorising businesses which are no longer able to trade.