Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank Members for giving me the opportunity to update the House on some of the key issues of relevance to the tourism sector. Before I go into the detail of the Government's actions and future plans for the sector, I wish to highlight the significant contribution tourism has made to Ireland's economic recovery since 2011.

From a position in 2010 where overseas visitors had fallen by 16% in two years, their numbers have increased every year since 2011. In 2013, Ireland attracted almost 7 million overseas visitors who, in turn, contributed an estimated €3.3 billion to the economy. Combining data from the domestic market and international visitors, total tourism revenue for the economy in 2013 came to €5.5 billion. Of this, €1.4 billion directly benefitted the Exchequer through taxation, a very significant contribution by any benchmark.

I am pleased to report the picture for 2014 is again positive. Central Statistics Office, CSO, figures released this morning show there were more than 6.5 million visits in the first ten months, an increase of 8.8% compared to the same period in 2013, representing an additional 532,000 visitors from around the world. The growth levels are not confined to any particular geographic area but are actually shared across all international markets. Visits from mainland Europe grew by 6.9% to 2.3 million for January to October 2014. North America registered an increase of 14.5% representing 1.185 million visits while visits from Great Britain were up by 8%. Visits from the rest of the world, mostly long-haul and developing markets, totalled 406,000 for the first ten months of 2014, representing an increase of 9.6% on the same period in 2013.

This growth level is particularly impressive given that 2013 was the year of The Gathering with many concerned it would be difficult to match that year's levels. These statistics show that our exceptional tourism product continues to deliver a unique and appealing experience for visitors to Ireland. Tourists are also heeding the advice of publications such as Condé Nast Traveller, Rough Guide and Lonely Planet, which all recently highlighted Ireland as one of the most attractive tourist destinations in the world.

While the tourism industry itself deserves great credit for how it reacted to the economic downturn, it should be also recognised that the return to growth that has taken place in the tourism sector since 2011 was underpinned to a large degree by the Government’s decisions and choices.

The introduction of a special 9% VAT rate for a range of goods and services, including visitor accommodation and restaurant meals, provided an immediate boost to the competitiveness of the Irish tourist sector. Hoteliers, restaurateurs and tourism service providers have clearly indicated the impact the lower VAT rate has had on increased trade, delivery and perception of a better value for money product, and more sustainable businesses. It is estimated that employment in the 9% VAT categories has increased by around 30,000 since the new VAT rate was introduced. It is important to emphasise to Senators that this tax measure was delivered in 2011 and now, more than three years later, our analysis shows it is still being fed through into lower pricing, and that lower pricing in turn is leading to the creation of large numbers of jobs and the maintenance of existing jobs. I campaigned strongly at Cabinet for the retention of this rate and I want to acknowledge all the contributions I received from many Members of the Oireachtas on this topic. I also acknowledge the role of bodies like the Restaurants Association of Ireland and the work they have done in highlighting the importance of this rate and how it has delivered the objectives that Government has set for us.

On another taxation issue, the air travel tax introduced by the previous Government damaged Ireland's tourism competitiveness, particularly given our island status and the importance of air travel as a means of delivering overseas visitors to Ireland. In budget 2014 we set the rate of this tax to zero. I am pleased to note that the major airlines responded strongly to our initiative, with a substantial growth in connectivity. For the peak summer period of 2014, air access increased by 10% from mainland Europe, by 14% from North America and by 14% from Australia and other long-haul markets. The relevant agencies and airports are working hard to ensure the positive momentum in this regard is maintained in the years ahead.

Looking at the various contributions to the tourism sector from Government in recent years, a particular issue this highlights is the close integration between our aviation policy and the success of our tourism sector. Higher levels of connectivity are a direct contributor to how our tourism sector performs. I visited one tourist attraction during the summer in my role as Minister to see how these businesses were performing. I was told that the tourist attraction could see the direct effect of an additional route on the number of people visiting within one day of that route landing in an airport. One of my priorities is to ensure we continue to have plans in place that maintain the existing connectivity, but look to develop it further, and to develop connectivity to other markets that will further add to the performance we have in this sector.

This increase in air capacity would not have been introduced by airlines without a compelling business case to do so. It is clear that the quality of Ireland's tourism offering continues to resonate with international consumers. To maintain this position, we must continue to develop our tourism offering in a way that has impact in the very crowded international marketplace. To have an impact, new tourism initiatives must be of sufficient scale to push through the multitude of competing products and destinations. This is the rationale behind Fáilte Ireland's move towards developing what they call "brand propositions," projects of sufficient scale to be marketed overseas in their own right. The best example of this is the Wild Atlantic Way, with which many Senators will be familiar. This is the first major project to be developed on this basis. It is Ireland's first long-distance touring route, stretching for 2,500 km from Malin Head to Mizen Head. It was developed specifically for the western seaboard to address the decline in international visitors to the region. It builds on what is distinctive and appealing about the west coast - its coastline and ocean, complemented by a deeply rooted and authentic culture and people - to give it visibility in a crowded international tourism market. While Fáilte Ireland provided the central co-ordinating role for the Wild Atlantic Way, it would be impossible to develop a project of this magnitude without the support of the local authorities along the route. Accordingly, I wish to formally acknowledge their contributions, for example, the work done by Sligo County Council in seeking to develop this along the route, and the work done by many local authorities in understanding that they can build strongly on the template provided by the Wild Atlantic Way. When local authorities and local communities come together to develop an offering that is local and unique and then build that into something like the Wild Atlantic Way, it delivers an exceptionally strong overall offering from Ireland, which is why we have seen the Wild Atlantic Way deliver the kind of performance it has.

Fáilte Ireland is currently developing a similar unifying tourism proposition for those counties in the east and south. That brand proposition will group the cultural and heritage tourism assets and experiences of Ireland's east and south via a network of routes, trails and journeys into a new tourism experience that can be easily understood by and will appeal to overseas visitors. It will build on the significant investment supported by Fáilte Ireland using capital funding from my Department across the region, such as the Medieval Mile in Kilkenny and the Waterford Viking Triangle. We will work to deliver a similar approach to the south and south-east of the country for next year, to build on the key insight from the Wild Atlantic Way, namely that one must develop concepts that build on what is already there within different counties and then find a way of unifying them.

While the tourism industry, Fáilte Ireland, local authorities and other stakeholders are engaged in the continuous development of our tourism offering, it is the responsibility of Tourism Ireland to bring that message to potential visitors in overseas markets. In 2014, the agency has placed a major focus on car touring holidays, highlighting in particular the Wild Atlantic Way. Tourism Ireland has also promoted key events, including Limerick City of Culture and the Giro d'ltalia. The agency has also capitalised on the important developments in access to Ireland that I have outlined, maximising the promotion of new, as well as existing, flights and sailings to continue to grow overseas tourism in Ireland. Tourism Ireland will build on the opportunities presented by the new British-Irish visa scheme, which was launched last month by the Irish and British Governments. The scheme, based on mutual recognition of each other's visas by Ireland and the UK, is an historic breakthrough between the two jurisdictions and will be initially rolled out in the key growth markets of China and India. The scheme will build on the success of the current Irish short-stay visa waiver programme which was launched by the Government in July 2011.

The estimated number of visits to Ireland from China and India grew from approximately 25,000 in 2009 to nearly 40,000 in 2013. The new British-Irish visa scheme will make it even easier for those numbers to continue to grow as the hundreds of thousands of Chinese and Indian visitors to the UK each year will now be able to travel to Ireland on the same visa.

I have referred to the Wild Atlantic Way which is delivering for the west coast and the new south and east brand proposition which will be launched next year. It would be remiss of me not to refer to what we are doing for tourism in my home city, Dublin. Within the global tourism market, cities have the potential to be destinations complementing the wider national or regional destination, while at the same time helping to drive the sustainable long-term growth of their country or region. Those cities that have performed most strongly include among their strengths a distinctive brand, as well as an attractive tourism proposition, rooted in a strong national proposition. For example, Copenhagen appeals to many on the back of both its distinctively Danish and its uniquely urban characteristics.

I recently announced the establishment of a group to develop a brand identity for Dublin, to drive tourism in the capital forward and allow us to compete competitively for market share with other cities across Europe. The group, which is being set up under Fáilte Ireland and will be known as the Grow Dublin Tourism Alliance, will be led by the chairman of Bord Bia, Michael Carey, and I thank him for undertaking this work, who will be responsible for delivering the strategy. While recent years have shown the beginning of a recovery where tourism is concerned, Dublin is under-performing against its potential. It has the capacity to attract even more tourists than is currently the case. If a capital city does not fulfil its potential in terms of tourism, that has implications for the rest of the country.

Cities such as Copenhagen have shown sustained levels of growth, through initiatives such as "Wonderful Copenhagen", which is a not-for-profit, public-private partnership and has seen tourism rates in that city increase by more than 8% year on year between 2008 and 2012. There is no reason Dublin cannot do the same. To do this, a sustainable funding model must be developed. This will require a balance of funding from the public and private sectors, with the current rate of public sector funding being maintained and a new private sector funding stream being identified and drawn from, for which the Grow Dublin Tourism Alliance will be responsible. I emphasise that this is not about trying to remove funding from our city or from one part of the country. It is simply saying that when a part of the country, as is the case with Dublin, is doing well but could do better in the future with a new unified campaign to support it, it is appropriate to ask those who are involved in the industry to make a contribution to the funding of an initiative from which they will benefit. When and if we do this, we can send a strong message to the rest of the world that Dublin is top of the list in terms of global city destinations. My objective would be that as we get more tourists to Dublin, and it would be great if they are new tourists spending time in Dublin, it is equally important that we get them to leave Dublin to visit and sample what our country has to offer.

In the coming weeks I will publish a tourism policy statement which will prioritise investment to maximise the return from tourism in the medium to long term. It will build on the complementary strengths of our uniquely friendly and welcoming people, the beauty and historical heritage of our country and the support and commitment of government policy. A draft version of this strategy was published in July. We have invited and received a large amount of inputs from all stakeholders in this sector. The Department and I will examine those carefully and I will bring a finalised strategy to Cabinet for approval before the end of the year. This will seek to build on the gains made in recent years and will chart a course forward.

In this context, I wish to make two points. The first is that I understand the huge importance of balanced regional development to our economic development. The tourism sector is a part of our economy that is uniquely placed to make a contribution to regional development. Second, as good as the strategy will be, it will be equally important to have a group of people charged with implementing it. Shortly after I launch the statement, I will appoint a tourism leadership group which will prepare and oversee implementation of the strategy and action plan.

I hope I have given Senators a good account of from where we have come in this vital sector, my observations on where we are doing well at present and, by outlining issues such as the contribution of aviation to this sector, the need for balanced regional economic development and my objective to identify different branded propositions for different parts of the country to build on all our country has to offer, how committed I am to ensuring that the recent years of growth are a taste of what is to come. We all know the huge harm that was caused to the country due to having an economy that was reliant on one or two sources of growth. The Government wishes to get the economy to a point where there are many sources of growth on which we can depend, and I am convinced tourism will be one of them. If we continue to make the right choices, what we have seen so far will be a sign of what we can hope to achieve in the future.