John Paul Phelan (Fine Gael)

I welcome the Minister to the House for this important debate which was requested by me and others. I thank the Leader for facilitating it. I am glad the Minister has chosen to come to the House to discuss tourism. The industry is at a crossroads and, while I hope I am wrong, I do not necessarily share the Minister's optimism regarding its future. It cannot be taken for granted. There will not be an automatic improvement in its performance without the influence of the Government.

The future success of the industry largely depends on the growth in demand for Irish tourism products. The scale of the demand is dependent on three primary factors – consumers' incomes, prices and product quality. I accept the Minister cannot do anything about the incomes of consumers from continental Europe and further afield, but the Government has an important role to play in regard to prices. All indicators point to a serious erosion in price competitiveness in the economy which is having a significant impact on the tourism industry. The issues of product quality and prices can be better described as value for money. A recent survey of tourists conducted by CERT highlighted that 23% of overseas visitors felt there was scope for improvement in overall value for money. In this regard the Government has an important role to play in the upcoming budget.

The Minister referred to the Irish Tourist Industry Confederation's report, which provided an extensive account of the tourism industry over the past 30 years. It pointed out that since the 1960s the number of visitors coming to Ireland had increased fivefold and foreign exchange earnings had increased by a factor of 40. We have seen significant growth in the tourism industry since the 1960s. Although it stalled during the economic depression of the 1980s, it improved towards the end of the 1990s and it is now reaching a plateau.

Visitors spend €6 out of every €100 spent in Ireland. That clearly shows the impact tourism has on the economy. It also had a major impact on the surge in consumer spending between 1995 and 2000. Inflation adjusted tourism spending increased by three-quarters between 1992 and 2001, which is significant. When one adds together current and capital expenditure on tourism, one can see that it accounted for 6.8% of GDP for the years 1995 to 1999. Tourism contributes significantly to the economy. ome 137,000 people were employed in the tourism industry in 2001, an increase of 83% on the 74,000 figure in the early 1990s. However, CERT's figures for 2001 show that that number has started to decrease. I hope the Minister is right that it will not be a prolonged decline.