Maurice Cummins (Fine Gael)

I welcome the Minister, Deputy Brennan, to the House. I acknowledge the help he has given me in the many Ministries he has held since I became a Member of this House. In particular, I thank him for the assistance he provided when he was in the Department of Social and Family Affairs. As the Minister said, we face many challenges in 2008. Tourism is one of the sectors of the economy that has grown consistently and thrived on the basis of this country's worldwide reputation. I do not doubt that 2007 was a record year for tourism in this country. Approximately 9.1 million people visited this country last year, bringing an estimated €4.6 billion to the economy.

The tourism industry faces one of its most challenging years as a result of a number of issues which have arisen. I refer to the weakening of sterling and the US dollar against the euro, for example, and the slowdown in the growth in the Irish economy. Those operating in the tourism sector have been affected by the continuous increase in the cost of doing business in Ireland. The tourism industry employs more than 150,000 people and benefits every parish in this country. The Government needs to put in place a strategy to ensure such levels of employment can be sustained.

The Minister alluded to the fact that the situation in the west has been further complicated by the termination of the air service between Shannon and Heathrow airports and the challenges posed by the open skies agreement between the EU and the US in respect of transatlantic flights. I ask the Minister to ensure the amount of money provided to market the Irish tourism sector overseas is augmented by a special fund to support initiatives in the US dollar and sterling areas. Such funding would be available to airlines, sea carriers and accommodation providers that take currency risks by making tourism packages available in sterling or US dollar prices. I accept that some carriers and accommodation providers have been proactive in offering attractive prices to people in overseas markets. However, other product providers, such as signature golf courses, etc. should be conscious of the difficulties created by the strong euro, especially in the US. They should accommodate people in relation to green fees, for example. As this country's signature golf courses fly the flag of quality and add to Ireland's attractiveness as a destination, I suggest that they should be considered for qualification under the business expansion schemes.

It is clear that 2008 will be a most difficult year. All sectors of the tourism industry should be encouraged to be creative and to take some risks to ensure the industry will benefit immediately from any upturn in the economies of our main markets, particularly Britain and the US. Given that tourism contributes €2.8 billion to the Exchequer it would not be unreasonable to suggest that an additional €5 million be made available for specific marketing activities to attempt to counteract the weaknesses in the US dollar and sterling.

Tourism, and in particular the hospitality sector, is a major employer throughout the country. The hospitality sector has an extremely high cost base and the cost of labour now exceeds 40% of turnover. Continuing increases in local authority rates and charges are a major burden for hotels and guesthouses. The Commission on Taxation should consider in depth how the inequitable system of local authority rates can be replaced with a more equitable system of local taxation.

Overseas employees make up 30% of employment in the hotel sector. They make an enormous contribution to Irish hospitality. Fáilte Ireland in conjunction with the industry should put in place an effective customer relation training programme to ensure employees who come in contact with members of the public are aware of local attractions and can communicate to customers the areas of interest in the locality which would make their stay more enjoyable.

Marketing and promotion should be constant and not confined to the periods during which it has traditionally taken place. All marketing resources should be channelled into maintaining and improving the quality of the product we have. The expansion in the number of flights was discussed and it is great to see so many air routes. We have seen an explosion in the number of air routes during recent years. This has changed travel patterns and cities and regions with airports have benefited. It is suggested that they are beneficial to people described as cash rich and time poor.

We must also make reference to carriers by sea. After duty free was abolished, car ferry companies experienced grave difficulties. However, they are fighting back and their marketing theme is that they are low-cost carriers. This is being pushed hard and is effective. It is proved that people bringing their cars stay longer and are more valuable from a tourism point of view. This area should be vigorously marketed.

We have difficulties with competitiveness. Recently, Dublin was ranked the most expensive of 71 global cities by Swiss banking giant, UBS. In a survey carried out this year, Dublin moved from being the 13th most expensive city surveyed to being ranked fourth, just ahead of Zurich. This should set alarm bells ringing. The most recent CSO figures show an annual rate of inflation of 5%, rising to 9.3% in food and alcoholic beverages. This is another problem we face and it must be tackled.

With regard to transport, we have a deficit which must be addressed if we are to attract tourists. Traffic gridlock is the norm in our cities but also in regional and rural areas. Cars play an essential role in getting around. To date, Transport 21 has failed to deliver adequate rail links, bus services and transport services in regional areas in particular. This is vital in areas surrounding regional airports. The economic and tourism development plan for the Shannon region, which was published recently, contains minimal funding commitments to enhance transport links in the region. At a time when competition for airline passengers is fierce we must ensure local infrastructure is of world-class standard.

As I am discussing transport and travelling, anybody who took part in the Seanad election can testify that we still have major problems with regard to signage throughout the country. It is often mentioned in the context of tourism. I hope it is addressed. We have been assured it will be but it must be given a great deal of consideration.

Aside from the clear obstacles which the tourism industry must overcome, issues such as changing consumer behaviour must also be taken into consideration. Tourists are taking shorter and more frequent breaks, often opting for urban holidays rather than rural trips. The increasing importance of environmental issues must also be considered.

Another problem to be addressed is the fact that we are missing out on the key area of business tourism. The delay in delivering a national conference centre in Dublin means we are missing out on an estimated €25 million to €50 million a year. It is estimated that 870 conferences take place in Europe each year and the global conference market is estimated to be worth more than €40 billion. A national conference centre is required without further delay. I could say a great deal more but I will conclude my remarks. I welcome the Minister's comments to be made at the conclusion of the debate.