Martin Cullen (Waterford, Fianna Fail)

I commend my colleagues in the Seanad for tabling this important motion. I welcome the opportunity to address the House on the subject of Irish tourism. I recall the interesting debate we had on this subject last November. I look forward to hearing the contributions of Members and promise to consider carefully any suggestions that are made.

The national and international economic landscape has changed dramatically in the past year. I am acutely conscious of the concerns and anxieties of people working in the tourism and hospitality sector. There is no doubt the industry is facing serious challenges, particularly in the short term. This country is now fighting for its economic future. Unless we can commit ourselves to restoring stability to the public finances, there will be no economic recovery. The world is looking on and we need to persuade the international markets that we are capable of and willing to take the tough decisions required. The strong message I want to get across is that the Government is operating within a clear framework for dealing with the current crisis and stabilising the public finances. As well as the measures that will be taken in the upcoming budget, this involves stabilising the financial and banking sector, a firm commitment to achieving the necessary savings in public expenditure, measures to secure in the short term the stabilisation of the economy and to maximise economic activity and employment through major capital projects and helping those who lose their jobs. We intend to work together to implement a reform agenda, including building Ireland's smart economy, upskilling those in the labour market, delivering public service reform and finalising a comprehensive framework for future pensions policy.

As Senators are aware, we are experiencing the impact of an international recession of unsurpassed severity. All major economies, including our key source tourism markets, are suffering or will suffer this year. The Government recognises the future prosperity of the country will be determined by the actions we take now. We know that much painful readjustment remains to be done but we are committed to taking the tough decisions necessary.

It is important to appreciate, as I know Senators do, the progress we have made in the tourism industry over recent years. Irish tourism, operating within the framework of the New Horizons tourism strategy, has performed exceptionally well since 2001. After the successive shocks of the terrorist attacks of 11 September 2001, SARS and war in the Middle East, Ireland was one of the first countries in western Europe to return to growth in 2003. Even in the very challenging environment that pertained last year, our foreign revenue earnings from tourism are expected to have been reduced by no more than 3% to 4%, still amounting to around €4.7 billion. Overseas visitor numbers declined by just over 2% in 2008. The domestic market also held up well in terms of revenue and numbers. These declines must be seen in the light of progress made over the previous two decades. We must bear in mind that in 1990, overseas visitors numbered just over 3 million, compared to 8 million in 2007. In 1990 domestic tourism generated €0.5 billion in earnings, compared to €1.7 billion in 2007.

I will now consider prospects for 2009 and beyond. Based on the impact of changes in the world economy on tourism and travel, both globally and in the island of Ireland, Tourism Ireland has developed a range of scenarios for likely performance in 2009. The factors considered include the likely economic state of key source markets as well as elements such as air access capacity, consumer travel behaviour and consumer confidence. The target for 2009 is to sustain visitor numbers and revenues at no less than their 2005 and 2006 levels and to consolidate our position during the year with a view to an eventual return to growth. This is against a backdrop in which the World Travel and Tourism Council is projecting a contraction of 3.6% in the tourism industry worldwide in 2009. Tourism Ireland will be reviewing prospects on an ongoing basis as the year unfolds and will revise its forecasts on a quarterly basis, given the rapid pace of change in the external environment.

I remain optimistic about our future prospects. With the right public policy framework, a strong partnership with the industry and active and responsive tourism agencies, we have every reason to be confident in our capacity to manage our way through these exceptional times and return to sustainable growth in the medium term. There is a large market out there to be captured. Tourism revenue across the world is valued at €462 billion annually, or just over €1.25 billion a day. The industry represents over a third of the world's exports of services and, even allowing for a decline in 2009, more than 9% of world gross domestic product. Most importantly, the industry is expected to maintain its growth trend in the medium term. The Irish tourism industry is resilient and is well placed to capture its fair share of this market.

At a time of unprecedented economic challenge, tourism and hospitality remains a resilient, labour-intensive industry providing work opportunities throughout the country. While the sector is by no means protected from the current downturn, there are still an estimated 280,000 jobs in the tourism and hospitality industry. As I said earlier, the sector contributed an estimated €4.7 billion in foreign revenue earnings last year, with an estimated Exchequer tax return of more than €2 billion. The medium-term prospects for international tourism remain positive and there is no reason why Ireland cannot continue to gain market share if we get our competitiveness right and sustain our investment in marketing, product development and training.

Tourism Ireland is a North-South body, responsible for marketing the island of Ireland overseas as a holiday destination. The objectives of Tourism Ireland's marketing strategy are to convince overseas consumers that now is the best time ever to visit, to show them the tremendous value available from industry partners and to demonstrate how easy it is to get here by air and sea. We must position Ireland to take advantage of opportunities that will arise as the global economy stabilises. Tourism Ireland's commitment is to market through the challenges, work closely with industry partners and fight for every bit of business that is there to be won.

Tourism Ireland has reviewed all its marketing programmes and will keep them under the microscope to ensure they maintain the maximum flexibility and responsiveness necessary in this difficult trading environment. The new and refreshed global advertising campaign, "Go Where Ireland Takes You", has been rolled out to help position the destination and keep it front of mind with consumers.

Most importantly, Tourism Ireland is engaged in a huge tactical marketing programme right now across all major markets, communicating strong reasons to visit together with clear, price-led messages. It is working with the industry to bring the best available offers to the attention of consumers overseas and to make it easier for them to book. It is also investing in co-operative and partner-led marketing and has front-loaded spend to prioritise bookings for the peak holiday period. The aim is to mount an integrated and concerted marketing effort, with tactical co-operation with industry partners the cornerstone of the approach.

A major part of Fáilte Ireland's focus in 2009 will be on expanding the home market with a specific marketing campaign to persuade more Irish people to take a break at home this year. Fáilte Ireland's consumer research indicates that there is further potential in the short break market, with fewer Irish people considering a short break abroad in 2009 and more considering short breaks in Ireland instead.

The home market represents up to two thirds of hotel bednights. An intensive marketing programme incorporating television, radio, press and outdoor channels will put out key messages, such as the convenience and increasing value of holidaying at home. Let us not forget that more than €6 billion was spent abroad by Irish residents in 2007 and even a small proportion of this would make a major difference to Irish tourism if it were spent at home in 2009.

Fáilte Ireland's recent research confirms that the main issues of concern for hotels and other tourism enterprises are the economic recession, weakened consumer demand, energy and labour costs and local authority charges. The industry is also concerned about access to credit, the regulatory framework and labour regulation through the JLC process. How can the Government help to deal with these issues? One way is to ensure our programmes and supports are refocused to meet business priorities.

During 2008 Fáilte Ireland worked directly with in excess of 2,000 tourism businesses. In 2009 it will be investing extensively in providing direct supports and advice for tourism enterprises. The key elements of the support package in 2009 will include a new mentoring support service providing one-to-one advice, a new "Biz-Check" service designed to provide operators with on-site business diagnosis and solutions support, further expansion of initiatives to improve on-line marketing and business skills generally within the industry and a significant investment in on-site training of industry employees in customer care and food preparation. Fáilte Ireland will also continue to roll out its executive management programme and the Optimus programme to help enterprises to achieve excellence in every aspect of their business by providing a practical approach to improving business and customer service.

Fáilte Ireland, through its business tourism forum, is placing increasing emphasis on attracting conventions, meetings and other business groups to Ireland. It has been gearing its resources to provide support and leadership to the business tourism sector. A priority has been the creation of a working partnership with the professionals in the industry, drawing on their experience and on their needs to deliver high quality products and marketing strategies. A new industry-centred conference alliance will provide greater support for Irish delegates who are prepared to lobby for association conference business. The national convention centre in Dublin is on target to open in September next year and has already secured a significant level of conference bookings to the value of €45 million.

Labour now represents a large proportion of costs to the industry and this cost impacts directly on international and domestic competitiveness. I have been in contact with the Tánaiste on the issue of wage costs and industrial relations structures, in particular the issue of double-time payments on Sunday. Some progress has been made in addressing the Sunday issue and I remain confident a solution can be found.

The Tánaiste has put in place a structured dialogue with the banks to ensure a greater level of transparency in the provision of credit facilities for business during the current difficult period. I will also be meeting the banks separately to raise the specific problems being encountered by the tourism industry which mainly revolve around the availability of working capital and the treatment of businesses that may be facing difficulty in respect of loan repayments.

The tourism industry touches virtually every parish in Ireland. I am conscious of the important role it plays in bringing much needed employment to the regions and the positive role it plays in promoting balanced regional development. Exchequer investment has as one of its fundamental objectives the stimulation of regional development. This expenditure is supported by the establishment of five regional tourism development boards in the south east, the south west, the west, midlands-east and the north west. Dublin Tourism has also been reconstituted. Shannon Development created a separate regional board to reflect these structures and detailed development plans for each tourism region have been produced and published and are being implemented. These plans serve as an important framework and resource for the various spending agencies in optimising the tourism benefits of their investment thereby adding to the social and economic impact locally of such spending. Progress on the implementation of the plans is being reviewed by departmental officials in co-operation with the tourism agencies.

One of the strengths of Irish tourism has been the robust policy framework that has been developed for the sector. This includes clearly defined implementation arrangements through the State tourism agencies and a strong partnership approach with the industry. To ensure our medium-term strategic approach is still fit for purpose and takes into account the rapidly changing economic and social environment, I established a high level tourism renewal group before Christmas to examine current tourism policy and programme priorities. The group, which is chaired by Mr. Maurice Pratt, has been tasked by me to set out by mid-year the key actions to be taken to ensure tourism continues to be a major industry for Ireland and that the right strategies are in place to maintain the long-term sustainable growth of Irish tourism. The group has met formally on three occasions and has examined issues such as business tourism, cultural tourism, branding and international tourism policy trends. The group has also engaged in two full-day consultations in recent weeks, directly engaging with key players in the tourism industry and the access transport sector as well as key policy Departments and agencies.

I thank the House for the opportunity to contribute to this debate. I am pleased that the House is taking an active interest in tourism, perhaps our longest standing, and arguably most important internationally traded service industry. We all recognise that these are extraordinarily challenging and difficult times for every economic sector and tourism is not immune. With a robust strategic and policy framework, however, strong partnership between the public and private sectors, effective State agencies, appropriate investment in marketing and product, and tourism enterprises which are now on a par with those anywhere in the world in terms of management capacity and quality, Ireland's tourism industry will rise to this challenge and can position itself to come out of this downturn even stronger than before.