Michael Ring (Mayo, Fine Gael)

The National Tourism Development (Amendment) Bill 2011 provides for an increase in the level of capital funding which can be voted to the National Tourism Development Authority, Fáilte Ireland, for the purpose of supporting tourism product development. Before moving on to the detail of the Bill, I acknowledge that contributors to the debate in the Dáil all commented on the importance of the tourism sector. The tourism and hospitality sector continues to be a major force in the economy, providing an estimated 180,000 jobs. It brings revenues into every part of the country and provides job opportunities for people across a range of skill levels. The estimate for expenditure in 2010 by overseas visitors, including carrier receipts, is approximately €3.4 billion. In addition, estimated spending on domestic tourism in 2010 was €1.3 billion, making the total spending on tourism in the national economy in the region of €4.7 billion. In terms of tourism performance, after a number of very successful years of growth, Ireland saw a reduction in overseas visitors in the second half of 2008, which continued into 2009 and 2010. Ireland was not unique in this regard as travel worldwide was affected by the global economic slowdown.

During the Dáil debate on the Bill, it was evident that Members were aware the tourism industry in Ireland has seen a welcome return to growth in 2011. I am pleased to be able to advise Senators that based on the most recent figures available, this trend has continued, which is very good news. For instance, in the first nine months of this year, visits from North America have increased by almost 11%. Visits from Great Britain have increased by more than 7% when compared with the same period in 2010. Notably, visits from other long-haul markets increased by 15% and visits from mainland European countries increased by more than 12%. Clearly, comparisons with the first half of 2010 are distorted by the impact on travel of severe weather in the earlier part of the year, as well as the volcanic ash between March and May of last year. However, the increase in overseas travel to Ireland is not solely due to the recovery of business lost due to the volcanic ash and weather issues of 2010. In fact, numbers from North America and from other long-haul markets are almost back to 2008 levels. Furthermore, Ireland is outperforming other European destinations in the key Great Britain market and is gaining market share. The figures are only available for the United Kingdom as a whole but they show that growth in travel from the United Kingdom to the EU-15 countries during the first nine months of 2011 stood at 2%, as against a growth of 7% from Great Britain to Ireland.

In addition, people appear to be holidaying at home in greater numbers this year and I commend them on their support for the domestic tourism industry. As yet, there are no official figures for performance of the domestic market. In that regard, Fáilte Ireland's tourism barometer for September 2011 is of interest. The barometer measures sentiment in the industry and according to the survey, 54% of hotels are reporting an increase in domestic volume. The caravan and camping sectors also report healthy domestic visitor levels, as do the self-catering and hostel sectors. These figures are heartening and the challenge will be to maintain this growth. While excellent work is being done at present in promoting Ireland at home and abroad as a holiday destination, we must ensure the quality and competitiveness of the Irish tourism offering is continually improved and that the industry generates increased earnings and more jobs as part of the economic recovery. The Government is playing its part through measures such as the VAT cut, reduced employers' PRSI and the visa waiver scheme to support competitiveness, as well as key investments to upgrade Ireland's tourism products and attractions.

The Bill under consideration today is a technical adjustment to existing legislation but is important in facilitating the continued support for capital investment in the tourism product. The decision of the Minister for Finance earlier this year to reduce to 9% the level of VAT that applies to a range of labour-intensive tourism services provided much-needed support to tourism businesses. The reduction was introduced until the end of 2013 but will be reviewed before the end of 2012. I am pleased that the Restaurants Association and the Hotels Federation strongly encouraged their members to pass on the VAT cut to their customers. The Government also helped businesses to enhance their position in the international tourism marketplace by significantly reducing the cost of employing people by halving employers' PRSI for those on modest wages. The visa waiver scheme, perhaps the most radical change in Irish immigration policy or practice since the coming of the Single Market, shows that the Government is serious about doing everything it can to support the tourism sector.

While the Minister, Deputy Varadkar, confirmed recently that the Government has decided to retain the €3 travel tax, pending a further review next spring, a significant proportion of the revenues taken in from the travel tax is being used to support inbound tourism. This support saw significant additional funding being used for co-operative marketing with airlines, airports, ferry companies and tour operators on inbound routes into Ireland. It focused in particular on opportunities to enhance access from the British regions, the United States, Germany, France, Belgium, the Netherlands and Luxembourg. Based upon the latest figures of overseas visitors it appears that these efforts are bearing fruit.

The Government's support programme for capital investment in tourism product is provided through Fáilte Ireland's tourism capital investment programme. The programme has operated on the basis of three broad strands: first, the development of new attractions and the upgrade of existing visitor attractions; second, the development of tourism infrastructure, primarily through supporting local authorities to develop appropriate facilities for tourists, including walking and cycling routes, jetties and moorings, angling stands, access routes to areas of scenic interest, and signposting and orientation facilities in heritage and historic towns; and, third, the development of outdoor and other active pursuits such as water-sports, boat rental, equestrian, horse riding facilities and so on In summary, the aim of the investment programme is to provide the necessary public infrastructure to help develop tourism as well as providing sustainable visitor attractions which match the expectations of the international visitor.

During the debate on this Bill in the Dáil, Deputies referred to the many features that make Ireland attractive as a holiday destination - our scenery, beaches, historic towns and our people. Many Deputies referred to their own areas, and I expect many Senators will do likewise, and to the many tourism attractions that exist throughout the length and breadth of the country. They also discussed the efforts made by ordinary people through such excellent programmes as the Tidy Towns scheme to ensure their local areas continue to be beautiful places to live and to visit. Many of these attractions and programmes have benefited from funding received by Fáilte Ireland and other State agencies.

Ireland has an excellent range of attractions. It has an excellent tourism product but the Government, the industry and all citizens must continue to work together to ensure that this continues to be the case. During the debate on the Bill in the Dáil, Deputies outlined the scope for investment across the country for investment in gardens, historic sites and monuments, walks, cycling routes and projects to provide for those rainy days with which we are all familiar. That is why I consider this Bill to be important legislation. It will facilitate investment to ensure that tourism makes its contribution to economic recovery and provides much needed jobs across all regions and counties.

Naturally, as with most funding schemes, there are many more applicants than there is capital funding available and I am sure Senators, like their Dáil colleagues, will be aware of many projects that might benefit from this funding. Under the National Tourism Development Authority Act 2003, responsibility for the management of tourism-related funding programmes has been devolved to Fáilte Ireland, which considers applications for funding based on the tourism benefits that each proposal will provide. To achieve the best use of public funding, it is crucially important that the limited funding is put towards the projects that will have the most effective impact on tourism both in terms of increased visitor numbers and the enhancement of the visitor experience. In this regard, the Fáilte Ireland executive undertakes a full appraisal process, including financial evaluations, legal and other due diligence of all applications made under the programme. When the evaluation has been completed, the Fáilte Ireland executive brings the application before a capital investment appraisal group, which has been established to examine proposals and make recommendations on funding. The group includes external experts with particular expertise in financial appraisal and economics, together with Fáilte Ireland's chief executive and a representative of my Department. Final approval of the appraisal group's recommendation is made by the Fáilte Ireland Authority.

In the initial years of the programme from 2007 to 2008, Fáilte Ireland targeted infrastructure provision by local authorities such as walking and cycling routes, beach management works, access to angling waters and so on. It also supported the historic towns initiative for walking routes in designated towns of historic merit. A total of €23 million was allocated to Fáilte Ireland in those years for these projects.

In the following years, the focus expanded to include the provision of support for re-investment in major tourist visitor attractions and the development of facilities for visitor activities. Notable projects that have been allocated or approved for grant aid to date include Dublinia, Waterford Viking Triangle, Slieve League Cliffs in Donegal, Athlone Castle, Mizen Head Bridge in west Cork, Mayo Greenway and King John's Castle in Limerick. In total from 2009 to date, 45 projects have been approved for funding of just under €76 million. The level of outstanding commitments under the programme means that the current legislative limit on the funds advanced to Fáilte Ireland will no longer be sufficient. This gives rise to the need for the Bill before the House which I will now outline in more detail.

The National Tourism Development Authority Act was passed in 2003 to dissolve Bord Fáilte Éireann and CERT Limited and establish the National Tourism Development Authority, Fáilte Ireland. Section 24(1) of that Act gives the Minister for Transport, Tourism and Sport, with the consent of the Minister for Finance, the power to advance, out of money provided by the Oireachtas, such sums as the Minister may determine. Section 24(2) limits the amount of money that can be advanced by the Minister to Fáilte Ireland as capital expenditure on projects or enterprises to €65 million.

Since its establishment in 2003 to the end of 2010, a total of €44.411million has been advanced to Fáilte Ireland in regard to capital expenditure on projects or enterprises. This leaves a total of just €20 million available to be advanced to Fáilte Ireland before amending legislation is required. It is anticipated that expenditure in 2011 and 2012 is likely to exceed the existing cap and this necessitates an increase in the limit.

My Department and the Department of Public Expenditure and Reform have agreed a new legislative cap of €150 million, based on this year's allocation and possible future allocations. The amount will meet the provisions in the Government's capital framework programme and allow Fáilte Ireland to incur the expenditure envisaged in that framework for tourism capital investment.

I am bringing forward this short Bill to make the necessary legislative change, and I commend it to the Seanad.