Martin Conway (Fine Gael) | Oireachtas source

I move:

That Seanad Éireann:- recognises the economic importance of tourism to Ireland over many generations and the enormous contribution made by previous Governments in partnership with the tourism industry which has created a very strong experience for many millions of visitors to this country;

- recognises the significant achievement in increasing tourism numbers to Ireland given the very difficult economic circumstances in recent years;

- acknowledges the significant role the tourism industry has played in the past by maintaining and improving standards in very challenging financial environments;

- acknowledges the success of recent Government initiatives such as the introduction of the 9% VAT rate, the abolition of the travel tax, the significant capital investment in high quality tourist attractions and the development and promotion of additional airline routes which have opened up new markets for the Irish tourism industry;

- recognises the various marketing initiatives which have brought tremendous success and increased visitor numbers in particular the Gathering, the Wild Atlantic Way and the Ireland’s Ancient East initiatives;

- calls on the Government to retain the 9% VAT rate on a multi-annual basis which will allow and encourage the tourism industry to plan ambitiously for the future;

- calls on the Government to identify ways of spreading visitor numbers to towns and villages across Ireland that may not have traditionally benefitted from the tourism industry;

- calls on the Government to continue its investment in ‘green tourism’ initiatives which will position Ireland to benefit from this fast growing sector; and

- calls on the Government to establish new funding streams where tourism entrepreneurs can be encouraged to apply for assistance in developing initiatives which will ultimately expand our tourism offering.

I welcome the Minister, Deputy Ross, to the House.As he will know, tourism is an extremely important industry in all parts of Ireland but, in particular, along the west coast and in counties encompassing the Wild Atlantic Way and counties that have many historical, traditional and cultural attractions. This country experienced an incredible economic recession, which started in 2008. In conjunction with that, tourist numbers dropped. Unfortunately, a number of punitive taxes and measures had to be introduced because we were part of the troika programme. The previous Government came into office in 2011 and the Minister, Deputy Varadkar, was Minister for Transport, Tourism and Sport at the time. He initiated a number of initiatives that were enormously successful. Everyone will remember The Gathering, an initiative back in 2012. It was the Irish tourism fight back at that time. It brought together all our citizens, nationally and internationally. It engaged and involved them in a project where they could have fun while at the same time help this country get back on its feet, specifically in the area of tourism. Hundreds of thousands of people who had Irish decent and Irish heritage came from abroad, spent time in Ireland, had a good time and helped us to kick-start our tourism economy. It was modelled on a similar gathering called the Homecoming that operated very successfully in Scotland. I think the Homecoming in Scotland is repeated every five years because it is seen as an enormously successful endeavour around which people can plan their trips back to their native land. I suggest to the Minister that perhaps he and his officials could look at running another The Gathering in a couple of years' time.

That was coupled with some very important budgetary measures, specifically the 9% VAT rate. The 9% VAT rate was a godsend to people in the hospitality, restaurant and hotel industries and in other areas associated with tourism in terms of giving them a bit of financial assistance and the opportunity to make their prices competitive and attractive.It did work. It worked very successfully, to such a degree that since the 9% VAT rate was introduced it has been retained in every budget subsequently. I will refer later to what I believe should happen to the 9% VAT rate.

Another very important initiative which was introduced approximately three budgets ago was the elimination of the travel tax. Mr. Michael O'Leary, a business pioneer in this country, lobbied for a number of years to have the travel tax abolished. He said that if that happened, he would commit to bringing 1 million extra passengers to this country the following year. At the time, the Minister for Finance, Deputy Noonan, entered a gentleman's agreement with him. He said he could see the logic in his argument and that he would eliminate the travel tax, but that Mr. O'Leary must keep his side of the bargain. Not alone did he bring in an extra million people the following year, he brought 1.6 million, an extra 600,000 above and beyond what was promised. The travel tax, the 9% VAT rate and The Gathering were very important incremental steps in the right direction to rebuild the tourism sector and we are beginning to enjoy the fruits of that today.

The marketing of Ireland as a tourism product internationally was never at the level it should have reached. One saw the shamrock advertisements in certain states in America encouraging people to come to Ireland, but there was nothing real or tangible. That changed when the concept of the Wild Atlantic Way was developed by the stakeholders and the Government. The Wild Atlantic Way competes with the Camino and other tourism attractions in the world and it can hold its head high in terms of success. We are only seeing the start of the success of the Wild Atlantic Way. Similarly, as a country we are trying to develop a heritage trail in the east, which has significant potential. The future of tourism is in a far healthier position than it was but we still have a lot of work to do. Many towns and villages, in particular in rural areas, have natural beauty but do not have people visiting them to the extent that should happen. Even in County Clare, where the Cliffs of Moher had 1.4 million visitors in 2016 and which one would expect to be at the pinnacle in terms of tourism, there are still towns that do not get the type of kick-back they should get from tourism. People are running restaurants, small guest houses and hotels in such towns that still need assistance. I call on the Minister to recommend to the Minister for Finance in next year's budget that the 9% VAT rate should be a permanent fixture for tourism.

I note with some disappointment that the Irish Congress of Trade Unions has decided to weigh in on this argument. I fully accept that working conditions in the hospitality industry sometimes fall short of the standards we expect and I salute the work of congress in fighting to ensure standards are developed, but I believe it is the role of Government to set taxation and if there is a shortfall of some hundred million euro it is the responsibility of the Government to find ways to make up that shortfall. However, I do not agree with the removal of an incentive that is needed for what I would describe as a developing industry. Perhaps there is a case to be made for the removal of the 9% VAT rate in the city of Dublin. There is no doubt the hotel and hospitality sector in Dublin is booming, but that is not reflected in many parts of the country. There may very well be precedent for a VAT rate of a different level in Dublin city, which would make up the vast majority of the €640 million congress maintains has been lost to the taxpayer.

I also encourage the Minister to recommend to his Cabinet colleagues that there should be a tax incentive scheme to encourage entrepreneurs who have good ideas for the interpretation of the landscape and history of this country, whether it be through audiovisual displays in museums or in various other ways so as to offer a product that would be weather resistant, which this country needs. Incentives should be provided for tourism entrepreneurs who have a good idea, and the capability to make it happen, that would attract people to this country and would give a better offering to those who decide to come. The Government should act in partnership and help such people.

I urge the Minister to provide further incentives for airlines to fly more people to this country as part of the transport side of his portfolio. We have seen what Ryanair has done and I am sure other airlines would like to establish routes into this country from areas that are not currently serviced. The airport authorities do a reasonably good job in terms of providing a suite of packages to airlines to open up new routes, but perhaps there is something more we could do in that regard.

Overall, it is important that tourism is on the agenda of this Parliament, certainly within the Seanad. It is an area in which there is significant potential for further growth. I salute the Minister and his predecessors for their ten-year strategy. It is important that we have a focused strategy and perhaps we might even make the targets a little more ambitious. We do not have oil rigs, mines or gold in this country but we have natural beauty. In my county we have the Cliffs of Moher and the Burren and there is beautiful scenery and fantastic history in many other counties. That is what we need to develop. They are our raw materials and natural resources. I commend the Minister on coming to the House for the debate. It shows the respect he has always had for Seanad Éireann as a former Member. I sincerely hope the discussion we have today will be a focused one and will inform the Minister's thinking as he prepares his plans for tourism in this country.