Sean Barrett (Independent) | Oireachtas source

I welcome the Minister to the House and it is always a pleasure when he comes to see us. I will not make any remarks about the descendants of shoemakers trying to cobble together some economic policies or anything like that. I note one of his critics in a subsequent television role became the Prime Minister of the United Kingdom. We should ask him to resume his support for The Gathering and I hope he will continue to do that. The fact that Senator Ó Murchú was able to deliver a major event to Senator O'Keeffe's area proves the power of the Seanad and that useful information should be conveyed any place the Minster might be discussing the future of the Seanad.

I look forward to the Strawberry Beds Festival, where we will meet in honour of the late Brian Lenihan. I attended the Carlingford Festival on one occasion but I cannot remember meeting Senator Brennan at it. I was canvassing there before the election. There was an excellent commemoration of Thomas D'Arcy McGee, one of the founders of Canada, who came from Carlingford. There is obviously a connection there.

I very much welcome that the Minister on page 1 of his speech referred to lower VAT and PRSI rates. That is most important because tourism is about price and product, and I will give the Minister evidence of where we ran into problems in that respect later. He referred to legacy issues. He has inherited a pretty unattractive brief because in the Celtic tiger era Irish tourism priced itself out of markets. The Gathering can only do a certain amount to try to restore our reputation and I will talk about that later. Tourism promotion in Ireland exhibits another characteristic of how we got ourselves into trouble in the Celtic tiger era, namely, the problem of bureaucracy, and I will also talk about that. Trying to correct some of that, to which the Minister referred on page 1 of his speech, is most important and I commend the Government. People's visits to this country must be of good value.

The Minister mentioned on page 7 of his speech the contribution by IPB, an insurance company. The tourism industry got itself into trouble before. I remember being at an event in the Royal Hospital in Kilmainham when John Bruton appointed me director of Bord Fáilte. At the event Mr. Colm McCarthy, a well-known economist and scribe, said to the hoteliers gathered that if somebody stays in their hotels they get to keep the money. He said to them, therefore, that they should not always be demanding that the Government promotes tourism. He added it is called "capitalism" in case some of the hoteliers and others in the tourism industry did not understand it. The fact that an insurance company sees the benefit of this is a wake up call for some of the people in the industry. Concerns were expressed at that meeting that sometimes we are better at promoting Irish hoteliers going to Chicago at taxpayers' expense when the object was to get the Chicagoans to come here.

Some of that expenditure gave the industry a bad name and made it substantially reliant on hand outs from the Government.

Good value air fares on north American routes are most important and I am pleased with the new arrangement at Shannon Airport introduced by the Minster and his colleague, the Minister for Jobs, Enterprise and Innovation. The airport priced itself out of the market. Officials there increased charges by approximately 700% and lost a great deal of business. I acknowledge the problems with debt and productivity and so on. Cork Airport should be deal with similarly. The decision by the Minister's predecessor to order the regulator to increase landing charges at Dublin Airport was short-sighted. We need the co-operation of airlines to come to Ireland and overcharging them at airports was silly on the part of many of the Minister's predecessors. It is important to remedy these faults. I support the Minister regarding The Gathering but there is evidence that tourism is not about once off gimmicks. For example, the Homecoming in Scotland has its critics while the holding of the Olympics n London may have resulted in a reduction in tourism activity.

I refer to the problems we face. Our wonderful research service put together some of the numbers prior to us discussing the National Tourism Development Authority (Amendment) Bill last year. Between 2000 and 2009, the number of tourists who visited Ireland who thought we were fair, poor or very poor value for money increased from 39% to 71% while the number who thought we were good value reduced from 39% to 25% or very good value reduced from 23% to 3%. Tourism is about price and product. We priced ourselves out of the market and Fáilte Ireland is aware of this because I am quoting its data.

Airlines have largely dispensed with expensive downtown offices. There was a time when Grafton Street, the Champs Élysée and the equivalent street in London were populated by airline offices. Have tourism bodies moved with the time? Airlines have largely dispensed with advertising literature and have moved everything online. Are the tourism bodies keeping abreast of that? We have the bureaucracy problem and the cost problem.

I commend those who kept Irish tourism going during the Celtic tiger era when everybody wanted to be an auctioneer, a conveyancing solicitor or a bureaucrat. The people who kept tourism going were those who came to Ireland from eastern Europe. We were too arrogant to be bothered with tourism and the Kerry accent disappeared from a large number of Kerry hotels but, happily, these people kept the industry going and we now have a better sense of perspective on these matters. We cannot neglect an industry, as we did shamefully, over ten years and expect to revive it overnight.

On the issue of the cost base, I question the way the then Department of Tourism, Culture and Sport, as it was configured before the Minister took office, regulated the sector. The Exchequer lost approximately ¤1 billion in revenue through foreign exchange from a peak of ¤4.9 billion in 2007 down to ¤3.9 billion in 2009. During those three years, ¤492 million was spent feeding the tourism bureaucracy comprising ¤310 million in operating expenses or 63% of the budget of Tourism Ireland and Fáilte Ireland. What kind of bureaucracy to promote Ireland spends 63% of its funding on itself? A total of ¤154 million was expended on marketing, which was approximately one third of the budget, at a time tourist numbers reduced. Does anybody in those organisations stay up late at night wondering how they spent so much money to reduce the number of visitors to Ireland? They have a great deal to answer for and part of what the Government was elected to do was to reform bureaucracy. I hope the Minister is asking them plenty of hard questions as to how such a marketing budget was mostly spent on themselves. They did not evaluate the marketing nor did they move with industry trends. It comes down to price and product at the end of the day and that is where we have been doing badly but I commend the Government parties on their attempts to correct that. I do not want us to be disillusioned this time next year.

I wish The Gathering every success but there are serious product and bureaucratic problems with the way Ireland has promoted itself as a tourist destination. Sometimes taking second-hand remedies from other countries may not be the best resort. We need to improve the product and reduce the price.