Feargal Quinn (Independent)

Growing up in a holiday camp was a great start from a business point of view and would provide good lessons for anybody regardless of whether he or she is involved in tourism. Every week 500 guests travelled by boat or plane, from England, and we met them with buses. The deal my father made with them was that it was an all-in holiday, everything was included. The guests paid on the day they arrived and it would have been a breach of contract to try to take more money from them.

That is an important message for every business. It is not understood in Irish terms or by tourism in Ireland as it should be. I see no sign of it being understood at Government level. It is essential if we are to succeed that we encourage our guests to return. My father measured success by the number of guests who came to him at the end of the week to say they had a good time and were returning the following year. Bringing the customers back is the basis of every business.

Statistically, Ireland is not doing too badly in that regard. A reasonable number of people come to Ireland but figures released today show a decline in the number of visitors to the regions. Many people have been critical of the numbers coming to Dublin for stag night weekends over recent years. They are not being drip-fed into the regions. Today's figures show that Dublin is doing well but the rest of the country is not. One of the benefits of tourism is that it can be spread throughout the country.

Price is not the only factor. The experience is important, whether with an airline, in a supermarket or a hotel. One sometimes pays a great deal more to stay in a high grade hotel than in another hotel. Those messages must be promoted. That is why I have put down this motion.

I was in Brazil recently visiting supermarkets and was impressed to see many men doing the shopping in a very up-market store. I mentioned this to my guide who explained that these were the chauffeurs doing the shopping for the ladies of the houses. It is a reminder that we do not look at price alone but at the whole experience.

I look forward to an open and wide-ranging debate on this subject. I quoted the American Express survey to underline a fact which does not need underlining, namely, that Ireland's high prices are no longer our secret. When this issue was highlighted last year there was what I consider to be an unworthy ministerial response. I am not sure I have heard that this year. It was suggested that anybody drawing attention to the problem was somehow or other letting the side down. This survey, and the wide international coverage it was given last week, should put an end to the notion that we can keep this little cat in the bag. The world knows what our visitors in recent years have been telling us over and again. Ireland is an expensive place in which to spend one's holidays.

The survey compared the cost of a tourist shopping basket of items in 12 different countries worldwide and found that Ireland was second only to Norway in price. It carried out two surveys, one including rent-a-car, and one without rent-a-car, but we are still the second most expensive country. The survey looked at the cost of 13 holiday expenses from the cost of having coffee, drinks and meals to the price tag on such holiday essentials as camera film, postcards and sun screen.The Irish shopping basket totalled over €211, virtually double the cost of the Italian one. It was €115 dearer than the lowest cost country, Thailand, which I can understand, which added up to only €96. Some examples from the survey show the overall trend. For example, a tube of factor 15 sun screen sets visitors in Ireland back €15.08 — higher than anywhere else in the world — whereas in South Africa it costs only €1.69. Camera film is another item that is expensive here with a price tag of €6.23 whereas in South Africa it costs only €1. A snack lunch for four, including drinks, costs €62 here, more than €40 more expensive than in Thailand where it costs €21.

Separate from the holiday shopping basket, the survey also looked at the cost of car hire and how it varied throughout the world. Ireland came third highest at €150 for three days car hire. This compares with only €54 in Spain. As I well know, comparing shopping baskets can often be misleading. I have often argued this issue because every individual shopper buys a different basket of goods.

This comparison has credibility because it focuses on the relatively narrow range of items bought by holidaymakers. It is worth pointing out it did not include the cost of getting here. One of the few bright spots in the picture is that the cost of getting here is relatively low because of cheaper air fares. On the other hand, those cheap air fares are available to most places that holidaymakers might choose. Therefore, there is no way we can argue that low access costs give us a competitive advantage.

The reason I tabled this motion is that it is high time we faced up to the wider implications of the fact that Ireland has become a high cost country. This survey is not the only one of its kind to draw the same picture. It is clear to everybody that Ireland is a high cost place for everyone, not just holidaymakers. I shall give an example. Last year an international survey of the cost of living in 114 capital cities ranked Dublin 14th in the world. Another in The Economist magazine recently confirmed that Dublin is more expensive than New York. It is not only our tourism business that is at risk, important though that may be, a high cost Ireland affects every aspect of our economic future. It affects our ability to attract incoming investment and our ability to produce goods and services for export to the rest of the world at competitive prices. The level of our cost base is, therefore, an important factor in our overall economic future.

What can we do about this? A response should have two prongs. We should take the issue of costs more seriously. I do not believe the Government is doing that. We should give priority to keeping our costs from getting further and further out of reach of our competitors. We should not simply acknowledge that Ireland is a high cost country and a high cost economy and wash our hands of the matter.

We are a high cost country and the reality is that we will remain one. It is a one-way street and we do not have an option to travel in any other direction. However, at the same time what matters a great deal is by how much we are more expensive than other places. If we can keep our costs within reach of the others that is one thing, if the gap continues to get wider that is another issue. We have to keep vigilant about costs, even if it is no longer realistic to hope we can ever get back to a position where we can use our costs as a competitive advantage. We should try to hold our costs at the present rate.

The Government will tell us that today it announced a consumer strategy initiative. Clearly there is something we can do and I am sure some steps are being taken. The difference is that it is not just costs, it is innovation also and innovation does not come from looking at the costs issue on its own. The example we have often taken is that of open book costings. If one asked Aer Lingus ten or 15 years ago to look at its costs for going to London it would have said it could not reduce them. Yet, when a competitor comes in with innovative ideas the costs come tumbling down. It is not simply a question of asking whether these costs are legitimate and if it is fair to charge given prices. The Government's step today does not go anywhere near addressing this problem.

The other prong is that we realise the importance of increasing the value of what we deliver. If we can no longer be a low-cost country, and I do not think we can, we can still aim to be a high value country, in other words, we must seek to justify our prices in terms of the overall value that the customer gets. In the case of tourism, this means that we should aim at giving our visitors a holiday experience that exceeds anything they can get anywhere else. We need in our tourism product to create a "wow" factor. We need to offer holidays that will leave visitors impressed with the quality of what they get during their time with us. We need to send them away not only satisfied with their holidays but with, what we call in business, making them missionaries. They have to go out and talk to others. It is a much cheaper form of advertising than anything one can pay for by having tourists speak as missionaries when they recommend to others a place to visit.

My recommendations raise the bar very high but it is the only way we can carve out a secure future for our tourism industry. As long as we take a need-to-know attitude to what we offer our visitors we put at risk the whole future of the industry. If we do not set out to offer something that is very special, sooner or later our costs will catch up with us and cripple the industry. The need for this approach goes far wider than tourism.

In tabling this motion I was not just thinking about tourism. What is true of tourism applies to everything else we do. It applies particularly to what we offer our foreign companies who invest here. I am old enough to remember the days when IDA Ireland used to claim that Ireland was a low-cost place to come to, a good location with a cheap and willing labour force. Those days are long gone.