Dáil debates
Wednesday, 15 February 2023
Saincheisteanna Tráthúla - Topical Issue Debate
Tourist Accommodation
9:32 am
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We have a very serious problem with the volume of tourism accommodation we have made available as part of our solidarity with the people of Ukraine who are seeking accommodation. Outside Dublin, an average of 30% of tourism accommodation has been provided. In the north west, an area with which the Leas-Cheann Comhairle is familiar, the average is as high as 60%. In places such as Rosses Point, it is 100%. In places such as Bundoran, it is approximately 75%. On average, throughout the north west and along the Wild Atlantic Way, the figure is 60%. There are particular issues in areas outside Galway city and Sligo town.
As the Minister of State will be aware, 2019 was the last proper year for tourism before the Covid-19 pandemic. We had tourism revenues of €5.2 billion. A reply to a parliamentary question I tabled referred to a direct correlation between every euro spent on accommodation for tourism and money in the economy. According to the Minister, an additional €2 to €3 falls to interdependent businesses within the economy for every €1 spent on accommodation. The same reply stated that while the Department does not have specific research, it is reasonable to say that if we have a 30% reduction in accommodation, there will be a 30% reduction in revenue. That would be in the region of €1.3 billion. Given the disproportionate amount of tourism accommodation involved - between 60% and 100% of the beds in the north west - we are going to suffer a disproportionate impact when the season begins next month. That is a major problem because our economies are hugely dependent on that eight-month season, including restaurants, bars, activity providers, local shops, supermarkets, personal care providers, including hairdressers, and so on.
There is going to be a need for a specific scheme to support these businesses. Otherwise, they will quite simply go under.
The other area on which there will be an impact is seasonal employment. Thankfully, we now have the Atlantic Technological University, ATU in our region but many from the region are students in Dublin, Galway, Limerick, Cork and elsewhere and they depend on seasonal employment to save money to cater for their exponentially rising accommodation, living and transport costs and so on. When I raised this with the Tánaiste some weeks ago, I regret to say that he was decidedly dismissive of it. The Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, according to replies I received some weeks ago, has no plans for an intervention. The problem is that we will be here in July talking about something, long after the horse has bolted. I very much hope that the Minister of State will respond positively, alongside his Government colleagues. An all-of-government approach is needed to ensure we have Covid-style supports for the wider business community and seasonal employees who are going to be adversely affected by this reality.
9:42 am
Thomas Byrne (Meath East, Fianna Fail)
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I am taking this matter on behalf of the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Martin. The Deputy has raised the issue of support measures for businesses and individuals dependent on seasonal tourism that may be adversely affected by the reduction in capacity this season due to hotels and other tourism accommodation being used to house international asylum seekers and Ukrainian people fleeing war. I am familiar with every part of the Deputy's constituency and know full well the impact of tourism. He made a strong case regarding the impact that the lack of tourist accommodation will have on such an important sector of the economy of his constituency, particularly in the coastal areas.
We are approaching the first anniversary of the start of the war in Ukraine. Since then, Ireland has welcomed 90,000 people between those fleeing Ukraine and other international protection applicants. Of these, more than 70,000 have required State-provided accommodation. This is the largest humanitarian operation ever undertaken by the State and the people, and tourism accommodation has played a significant role in response to this crisis. Tourism is one of the most important indigenous sectors and the use of tourism accommodation to meet humanitarian needs, while necessary in the short term, has led to concerns for everyone involved in tourism. The availability of tourism accommodation has knock-on impacts for other tourism businesses and businesses in the wider local economy. Officials in my Department are engaging with a range of Departments, with input from Fáilte Ireland, to ascertain how best to mitigate the potential impacts on the wider tourism ecosystem of long-term use of tourism accommodation. Analysis is being done on those towns or areas most impacted by the unavailability of tourism accommodation. The Deputy made a strong case on behalf of Sligo, Rosses Point and Bundoran in particular, but also other areas of his constituency.
The strong early recovery of inbound tourism to Ireland last year was welcome but it is fair to say that the tourism industry faces a number of challenges. The industry was disproportionately affected by Covid-19. Hotel capacity, energy costs and labour shortages will continue to challenge the industry this year but, despite the challenges, it has stepped up in a substantial way. In budget 2023, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media secured €15 million in additional funding for overseas marketing of Ireland. As global competition heightens, sustaining extensive marketing campaigns will be vital to support the ongoing recovery effort, building on the initial inbound tourism demand seen in 2022. The budget also contains an additional €15 million for a range of industry initiatives, including €3 million for a continuation of the investment in skills development and retention and €2 million for domestic marketing. The Minister also secured additional funding of €3 million to allow Fáilte Ireland to continue its work in the area of sustainability. Tourism agencies are working hard to help those in the tourism sector. Tourism Ireland will roll out an extensive and targeted programme of activity in 2023, with a total marketing budget of €78 million. A wide range of promotional activities will be undertaken as well, working with the tourism industry at home and the travel trade overseas to facilitate sales. In addition, Fáilte Ireland will announced its plans for 2023 next week, which will include work in the areas of recruitment and retention of staff and sustainability.
The Deputy will be aware of the temporary business energy support scheme, TBESS, which is designed to support businesses with their energy costs over the winter months. The Ministerhas received extensive feedback on this scheme from the tourism sector, both in written form and at a recent meeting of the hospitality and tourism forum, which she co-chairs with the Minister for Enterprise, Trade and Employment, Deputy Coveney. This feedback has been shared with the Minister for Finance, Deputy Michael McGrath. Deputy Martin is also aware that the retention of the 9% VAT rate is to the forefront for tourism businesses and individuals right now. The industry views on this were clearly expressed at the recent hospitality and tourism forum meeting.
Catherine Connolly (Galway West, Independent)
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I must stop the Minister of State there but he will get an opportunity to come back in again.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank the Minister of State. I know these answers are prepared in advance and I know much of the content already. We know what is being done at the moment but more needs to be done. A strategic approach must be taken to this. I have given examples from my constituency and I have no doubt that the Leas-Cheann Comhairle and the Minister of State can give examples from theirs. Indeed, all constituencies are feeling the same proportional impact. The Minister of State said that this is the largest humanitarian effort that Ireland has ever made. Despite the equivalent obligations on Denmark, for example, its effort is half that of ours as a proportion of the population and there is a reason for that. I hope the Leas-Cheann Comhairle will be able to facilitate me in contributing to tomorrow's debate on the overall co-ordination of these matters. It is worth noting that since 11 December, the number of Ukrainian refugees welcomed to Ireland went up by 8% but in Denmark it only went up by 0.6%, even though Denmark is much closer to Ukraine. It makes one wonder.
In addition, the Minister of State mentioned the 9% VAT rate. Its retention is an absolute imperative. All things being equal, if there was no war and so forth, there may have been a case for bringing that back up in a buoyant, post-Covid tourism market that we would have been able to look forward to but that is done now. We are going to have to support the sector with the 9% VAT rate. I am aware of the energy relief scheme and welcome it but a strategic approach must be taken to support all businesses dependent on tourism in the country. In a welcome way, we are ingratiating ourselves with the world and the European community through our efforts. However, those efforts are not being matched in other countries. We have capacity issues that ultimately, I regret to say, may force us to pause our efforts in solidarity with Ukraine. Again, I restate my hope that the Leas-Cheann Comhairle will be able to facilitate a few words from me tomorrow on that debate.
Thomas Byrne (Meath East, Fianna Fail)
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Again, I thank the Deputy for raising this issue. The work that has been done by the State and the people in welcoming refugees, particularly from Ukraine, over the past year has given a tremendous reputational boost to this country and that will have impacts across the economy and society to the benefit of everyone. We have done the right thing and we will benefit from that, apart from giving benefit to those most in need at this particular time.
The Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media is acutely conscious of the importance of the tourism sector, particularly in the regions. Tourism accommodation has a significant multiplier effect for businesses and she acknowledges that accommodation stock being taken out of the market brings a multiplicity of challenges, as outlined clearly by the Deputy. The Department has, both at the senior officials' group on Ukraine and beyond, communicated the potential challenges arising for the tourism ecosystem, particularly in those parts of the country, such as the Deputy's constituency, where high proportions of the tourism accommodation stock are directed to humanitarian purposes. A more detailed analysis of the scale of those challenges is being undertaken and will inform decision-making in this area, as will his contribution this morning. The Minister consistently engages with and takes on board the views of the hospitality and tourism sector, particularly around the need to avoid a cliff edge in support and she will continue to engage on this with Government colleagues.