Mary Hanafin (Dún Laoghaire, Fianna Fail)

Tá áthas orm deis a bheith agam labhairt ar an ábhar tábhachtach seo. Tourism makes a vital contribution to Ireland's economy. With the support of the Government, the Department of Tourism, Culture and Sport and the tourism agencies, the tourism and hospitality sector has the resilience to overcome its current difficulties and make an important contribution to Ireland's economic renewal. In 2009 the sector provided approximately 190,000 jobs, helped to generate almost €4 billion in foreign revenue earnings and contributed an estimated €1.2 billion in tax receipts. While 2009 and 2010 have proved to be exceptionally challenging years, the tourism industry remains resilient and has responded to the global economic difficulties by offering exceptional value to its customers.

The Government's recently launched strategy and action plan for Irish trade, tourism and investment to 2015, Trading and Investing in a Smart Economy, was drawn up by representatives from the relevant key Departments and agencies, including my own Department, Tourism Ireland and Culture Ireland. The strategy contains targets for job creation, exports, tourist numbers and inward investment projects to 2015 and sets out how the Government and its agencies will achieve these priorities and targets. The tourism related elements of the new strategy draw on the robust analysis carried out by the tourism renewal group in its report and framework for action published in autumn 2009.

Since the publication of the report of the tourism renewal group, my Department has been driving progress on the key measures in the framework for action, focusing initially on survival actions, in conjunction with the tourism agencies and other relevant Departments and bodies. For example, building on the framework for action, the 2010 budget recognised tourism as a critical labour intensive sector and provided for a 3% increase to €153 million in the overall tourism services budget. This allowed us to maintain the real level of investment in overseas marketing, as well as to provide a significantly increased capital allocation for tourism product development. The tourism sector was also included in several cross-cutting measures to support enterprises and jobs, including the employment subsidy scheme and the credit review system.

I established the tourism renewal implementation group in July to oversee and drive actions on measures that support tourism development in Ireland, increase competitiveness and ensure the sector is set for recovery and growth. The group has met twice under my chairmanship, on 6 and 20 September, and is scheduled to meet again on 27 October. Its first progress report which summarises progress on measures in the framework for action has been published on my Department's website. We have either implemented or are making good progress on four of the five survival actions recommended. These include maintaining the overall level and value of investment in international and domestic tourism marketing, strengthening Ireland's tourism attractions and products, providing active support for tourism enterprises and focusing and co-ordinating public spending on tourism related investment. As regards the nine recovery actions, the group notes good initial progress in the case of each of these actions.

The Government's new strategy and action plan for Irish trade, tourism and investment recognises the absolute importance of access and transport for tourism, as well as for trade and investment. The tourism renewal group reviewed the impact of the air travel tax, drawing on analyses by the tourism agencies, the tourism industry and the airlines, and recommended that it be abolished. I have discussed the tax in bilateral meetings with the airlines and listened to their concerns about it. I met Mr. Christoph Mueller from Aer Lingus, Mr. Michael O'Leary from Ryanair and Pádraig Ó Céide from Aer Arann. The issue has also arisen in meetings with other bodies involved in the tourism industry and was discussed at the recent forum of tourism interests convened as part of the development of the Department's new statement of strategy. In any consideration of the tax we must be conscious of what we could gain in return for the country and the tourism industry. I have asked the airlines what they can offer in exchange for the removal of the tax such as protecting or adding routes. I am discussing the air travel tax rather than the passenger taxes charged by Dublin, Cork and Shannon Airports. I have relayed the concerns raised with me to the Minister for Finance and will be discussing the matter with him further in the context of the forthcoming budget. However, if the money does not come from an air travel tax, we will need to find it somewhere else.

As the House is aware, we are experiencing the impact of an international recession of unsurpassed severity. Every major economy, including our key source tourism markets, is suffering. In our own case, the situation has been exacerbated by unhelpful exchange rate movements and the challenges in the domestic economy. Tourism worldwide has seen a significant downturn in the past two years due to the global economic slowdown and loss of consumer confidence. Figures for the first six months of the year show that while we welcomed over 2.6 million overseas visitors, this represented a reduction of just over 20% on corresponding 2009 levels. Outbound trips from Great Britain were particularly affected, with the euro-sterling exchange rate making it extremely challenging to attract visitors to Ireland and eurozone destinations generally. Furthermore, the exceptional weather conditions in the early part of the year and the closure of airports in April and May owing to the volcanic ash cloud meant that it was inevitable that a fall-off in the numbers travelling, particularly in north west Europe, would be experienced in the first half of the year.

On the positive side, the latest published monthly figures for June show a monthly fall of 5.7 % compared to the figures for June 2009. This is a significant improvement on the year-on-year fall witnessed in the earlier months of the year. Furthermore, the numbers of visitors from North America and other long haul destinations actually increased, by 1.4% and 4.1% respectively, in June compared to June 2009. Visitors from these markets are particularly important for the tourism sector, as they tend to stay longer and spend more than visitors from our nearest markets.

Economic circumstances are making trading conditions difficult for most businesses. These difficult conditions are exacerbated in the case of the hotel sector by the build-up of room overcapacity in recent years. This is proving to be a complex problem to solve and, inevitably, it will require a market-led solution over time. I had the opportunity last week to have a useful exchange of views with the chairman, chief executive and other senior executives of NAMA on how the agency's operations were likely to impact on the hotel and tourism sectors. My engagement with NAMA was at an overall policy level and not related to a specific enterprise or borrower. I encouraged NAMA to be strategic in its approach and welcomed its willingness to remain in contact with the Department and the tourism agencies at a general policy level as it worked its way through the management of its hotel backed loans portfolio. For its part, NAMA indicated it had completed the transfer of a number of tranches of loans, which included 35 Irish-based hotels, and had begun its engagement with borrowers in regard to business plans on a case by case basis. NAMA expected that its portfolio of hotel-backed loans would increase further, but not as much as anticipated publicly.

I was pleased to be advised that NAMA has not, nor does it intend to, subsidise loss-making hotels and accepted the need for adjustment to the new market realities. Indeed, NAMA has already met the Irish Hotel Federation to allay any concerns that NAMA was acting in an uncompetitive manner or as a monopoly hotel player. I am pleased to say NAMA is open to taking account of overall tourism policy considerations as its own strategy development evolves.

The provision and management of finance to hotels, restaurants and other businesses is a complex issue. For some time now, business interests, with other representative bodies, have been urging Government to help improve access to credit to SMEs. In order to ensure that applications for credit get a fair hearing, the Government has put in place a credit review system, under the direction of Mr. John Trethowan, to ensure applications for bank credit by viable businesses, including tourism businesses, are assessed in a reasonable manner by the banks.

I am aware of the difficulties that many hotels and restaurants are facing in meeting the cost of local authority charges and have written to the Minister for the Environment, Heritage and Local Government regarding these costs. I have been told the local authorities have taken a number of steps to support local business and employment generally. Local authorities have also implemented some reductions in their own cost base, with a view to reducing the need to increase charges on businesses and some local authorities have reduced their rates in recent times to support and stimulate employment in their areas. However, many businesses, particularly those in the tourism industry, are still struggling to meet the cost of local authority charges. I urge all public representatives to do everything in their power to ensure councils consider the needs of employers when setting their annual budgets, with a view to supporting jobs for local people.

I have acknowledged on many occasions that we are currently in a very challenging period for Irish tourism. Tourism worldwide has been deeply affected by global economic difficulties and loss of consumer confidence but the medium-term prospects for a global revival in tourism are very positive. With regard to future targets the report, Trading and Investing in a Smart Economy, sees visitor numbers increasing to 8 million by 2015. The strategy envisages 15,000 new jobs being generated directly in the tourism sector by this growth in numbers. In terms of achieving these targets, the report recognises that, in the short to medium term, Ireland's best prospects from a tourism perspective are in the United States, Great Britain and the major European markets of Germany, France, Italy and Spain. In the longer term, it highlights the Asia-Pacific region as one of the fastest growing outbound tourism markets, with China and India being the highest priorities for Ireland.

Tourism Ireland was represented on the high level group which drafted the new strategy and it is envisaged that it will also be represented on the new Foreign Trade Council which is being established for the purpose of monitoring, reviewing and promoting implementation of the agreed targets as set out in the strategy. In terms of prospects for 2011, Tourism Ireland is at present finalising its business plan for next year, for subsequent approval by the North-South Ministerial Council. I understand that, drawing on the overall strategic objectives set out in Government policy, it will contain targets for returning to growth next year from all our significant overseas markets. Activity being planned by Tourism Ireland includes leveraging the strength of St. Patrick's Day, targeting the Irish diaspora abroad and emphasising the great value now on offer in Ireland for visitors.

New infrastructure, such as the recently opened convention centre in Dublin, will also be used to promote Ireland overseas as a first class professional conference and business tourism destination. Events in 2011 such as the Solheim Cup at Killeen Castle, the start of the Tall Ships race series which will be hosted by Waterford, the UEFA cup final at the Aviva Stadium and the Irish craft year, as well as the Volvo ocean race which returns to Galway in 2012, can be used to attract significant positive publicity around the world. They will provide valuable opportunities to place Ireland in the international spotlight and showcase the many attractions we have to offer as a holiday destination.

On the domestic front, Fáilte Ireland will continue its significant investment in tourism product and services and will also continue to support local festivals and events. These, together with Fáilte Ireland's highly successful "holiday at home" marketing campaign, are playing a key role in improving tourism revenues around the country as well as boosting employment.

The quality and value of the tourism product in Ireland has improved dramatically over the past few years. Accommodation quality, particularly in the case of hotels, is among the highest in Europe. There are many more things to see and do, and we have built on our internationally acknowledged natural assets and resources. Visitors constantly express satisfaction rates of well over 90% for their stay here.

Under the Government's infrastructure investment priorities 2010-16, significant funding will be invested in tourism-related infrastructure to promote Ireland as a high quality tourism destination and to maximise the economic contribution of the tourism sector. This funding will be focused on completing the upgrading of major tourist attractions, developing a small number of key iconic attractions, improving infrastructure for recreational cycling, walking and water-based activities and heritage attractions. Recent approvals under the tourism capital investment programme have included almost €9 million in respect of the Waterford Viking Triangle, €3 million in respect of Tralee Lee Valley and over €7.5 million toward developments of New Ross Quay, the Dublin Writers Museum, the Irish National Heritage Park in Wexford, phase II of the Mayo Greenway and Meeting House Square in Temple Bar.

In acknowledgment of the difficulties faced by the tourism sector, the Government, through Fáilte Ireland, is also investing over €11 million in 2010 in the form of direct supports and advice for tourism enterprises nationally. The key elements of Fáilte Ireland's enterprise development supports include a comprehensive €3.6 million business support programme; a suite of management and skills development training programmes to tourism clients; measures to better develop, manage and promote tourism destinations; and strong e-business supports to underpin Fáilte Ireland and industry marketing activities, the delivery of enhanced visitor services and the availability of new online learning tools for industry clients.

I thank the House for the opportunity to contribute and look forward to hearing the contributions of Senators, many of whom are directly involved in the tourism industry. Any ideas they might have for helping the industry through this very difficult time would be very welcome. I see this as a partnership between Government, the industry and all of the tourism agencies in an effort to ensure we position the tourism sector for recovery and growth as part of our wider plans for economic renewal. From my dealings with the industry in recent months, I am confident it can rise to the challenge and will lift itself out of this difficult period.