Paul Coghlan (Fine Gael)

I welcome the Minister of State. I apologise that I missed the beginning of his contribution as business moved on promptly and I had been expecting a division on the previous business. We can be misled on occasion. I am sure the Minister of State made remarks about the Minister for Arts, Sport and Tourism, Deputy Cullen. I wish him well and I hope he recovers quickly from his back complaint and gets out of hospital.

I thank the Minister of State for his overview and I agree with much of it, although I would like other initiatives to be put in place. He referred to the supply of credit to businesses generally, which is a difficult issue. It very much affects the hotel sector and we all hope a stable and properly functioning banking system will re-emerge quickly because it is currently absent. The supply of credit to the tourism industry is proving difficult. Those involved urgently need credit as part of their working capital as the tourism season approaches.

I was taken by the Minister of State's comments on showcasing Ireland and the plans for celebrating St. Patrick's Day abroad. I welcome the greening of iconic buildings. This will be beneficial and it will amount to free advertising. It would be expensive if we had to pay for it. I am glad the Minister of State acknowledged the role of Members regarding the discounted travel scheme for foreign senior citizens visiting Ireland. We mentioned this more than a year ago and I am delighted it is coming to fruition. Retirees have more time to travel and, hopefully, they have pensions. The more we can do to encourage them to visit Ireland and spend their dollars and sterling, the better.

It is disappointing that we have lost so much of the British market. I have experienced this where I come from but this is affecting the entire country. One of the problems for the regions is that more people who travel to Ireland want to visit the capital city. Throughout the world, people are visiting capital cities more frequently and they are forsaking sun holidays. We have to sell our greenery. We have suffered in the south west and throughout the regions because of the concentration on Dublin and we have to try to redress the imbalance with a marketing initiative. At its peak the economic value of the tourism industry was €6.5 billion with 300,000 people employed in 2007. These numbers, as we know, are falling dramatically. Tourism revenue fell by €1.1 billion to €5.2 billion, its lowest level since 2004. Overseas visitor numbers fell by almost 1 million compared with 2008. Our largest tourism market, the United Kingdom, declined by 16%. In his response the Minister of State might outline whether there are plans to redress that by way of a major marketing drive throughout Britain. It is our nearest neighbour and the cost of travel is now competitive. I am sorry to see the decline of the ferry companies across the Irish Sea. I am very concerned as are others on both sides of the House that we should get the Cork to Swansea ferry back in place.

We have a sad situation in the hotel sector, some of which was driven by the tax-incentive schemes. At the annual conference of the Irish Hotels Federation in Galway this week, economist Peter Bacon said that failure to foreclose on insolvent hotels is damaging to the long-term interests of the tourism and hotel sectors and is undermining fundamentally sound businesses. I would not like to think we can bring it down all of a sudden. We need to be rational and anything that is going to happen should happen in an orderly fashion. An Irish Hotels Federation survey carried out in February revealed that 70% of hotels and guesthouses have experienced unfair competition from otherwise unviable hotels being supported by banks. In addition, some 88% of those surveyed said they are highly concerned about the viability of their businesses for 2010.

The Peter Bacon report carried out on the sector last year suggests a quarter of hotels need to be closed urgently because the sector is insolvent. He suggested the orderly elimination of 15,000 hotel rooms should begin before this year's peak season. I again stress this needs to be done in an orderly fashion. He pointed to that banks which had financed the loans are not foreclosing on the developers' loans to avoid a negative impact on their balance sheets. We obviously need a bit of a break on that also. He indicated hotels are experiencing occupancy rates as low as 50% to 55%. Encouraged by Government-sponsored tax breaks, the number of registered hotels in Ireland rose by 20% to 868 between 1996 and 2006. We have a significant oversupply and I am sure this also affects the Minister of State's part of the world. A total of 26,802 new hotel rooms were opened in Ireland between 1999 and 2008. It is estimated the sector owes €15,000 in debt for every hotel room and only 5% of hotels are currently running a profit as can be seen from the deals that are on offer. In order to stay in business they are being forced to run at that level.

I hope Fáilte Ireland will fund a significant home holiday campaign. The more we can get our own people to holiday in Ireland the better. We all know there are so many beautiful parts of the country which we would like to reach. We need to do more in that regard.

Access to Ireland has become worryingly restricted with the ongoing removal of routes and restrictions in airline capacity at both Shannon and Dublin airports. This in turn has led to significant job losses. However, we need to tackle the departure tax, which has exacerbated the situation greatly. Aer Lingus has stated the tax will cost the company €30 million this year and Ryanair has announced reduced routes and lower capacity, which is also nailing us. The Dublin Airport Authority's credit rating was downgraded by Standard & Poor's, which cited the departure tax as something that would accentuate the falling numbers of airport users. This is a particularly worrying time for the capital's airport as it tries to sell commercial space in its new terminal against a background of fewer customers and it faces further loss of revenue from its hangar space due to the departure of SR Technics.

The Government's own advisers, the tourism renewal group, have called for the abolition of the departure tax as a survival action for the industry but this has fallen on deaf ears. Other European countries with similar taxes in place have moved to remove barriers to access to stimulate tourism. We urgently need to do more in that regard.

In my part of the world I receive many complaints about local authority charges on the hotel industry. The Government needs to freeze these charges and reduce energy costs. They are regarded as an unfair and unjust burden. Not alone are hotels failing to pay this year's but many of them have not been able to pay last year's and in some cases the previous year's. I understand a re-evaluation has taken place in South Dublin and Fingal county councils, which is much fairer for those involved in tourism in this part of the world. However, what about the rest of the country? How many years will it take?

I wish to stress the importance of the value of cultural tourism. As the Leader will tell the Minister of State, on the Order of Business this morning we voiced concern about the value of the arts, museums etc. The Minister of State and I had a word on the margins about a man in his part of the world who misunderstands the situation. The Irish Museums Association held its annual conference in Killarney last weekend. These institutions are doing a great deal not just as a store of knowledge, but also in what they put on display and tell us about ourselves through their artefacts. I believe the Minister of State understands the point I am making and the value of these institutions. The agencies of the State need to be more co-operative with local interests. We do not want civil servants fighting needless turf wars when we can jointly market things successfully.