Lisa Chambers (Fianna Fail) | Oireachtas source

I welcome the Minister to the Chamber. I preface my comments by saying the war in Ukraine is a humanitarian crisis and we must do all we can to help and support people. We have both a moral and legal obligation to do so as well as having the support of the Irish public in that endeavour.

The focus of my contribution is on the implication of the significant loss of bed capacity in tourist accommodation throughout the country due to Government policy to house refugees in hotels and guesthouses, in particular budget hotels and smaller guesthouses. I have a greater concern for those areas where tourism is a big employer, an important part of the local economy and may be seasonal in nature. These jobs support people in making a living, paying the bills and putting food on the table. In some parts of the country, particularly in the region I represent, there are few alternatives to working in tourism and hospitality for many people. The Minister for Children, Equality, Disability, Integration and Youth, Deputy O'Gorman, is responsible for integration and it is his Department which is contracting with tourist accommodation providers. However, it is the Minister's Department that has responsibility for tourism and protecting one of our most important indigenous industries. The policy to buy up huge swathes of hotel accommodation is severely damaging our tourism sector. I want to know today what the Minister and her Department plan to do about it.

The issue has been well flagged with the Minister and her colleagues in Cabinet by the industry. I believe she and her colleagues have had sight of a document from Fáilte Ireland that was leaked to the media last week, entitled "The implications of displaced tourism accommodation stock and potential support solutions". I commend it for coming to the table with solutions as well. It makes for very stark reading and sets out in black and white just how bad things have become in the last year for the sector. Some 28% of all Fáilte Ireland registered tourist accommodation bed stock is contracted to the State; excluding Dublin, the figure is 34%. Tourism revenues are being hampered because potential visitors are either unable to find suitable accommodation or unable and-or unwilling to pay the rates sought, as colleagues have alluded to. Lost tourism revenue is estimated to exceed €1.1 billion on an annualised basis. That is a staggering figure. This puts jobs at risk, especially in parts of Ireland where alternative employment opportunities are low.

I think of my own county of Mayo and the entire west and north-west region, where tourism and hospitality employ many people. We have worked hard as a region over many decades to build up our tourism offering and a reputation as a tourism destination. This Government policy of stripping the region of so much tourist accommodation is killing us and setting the sector back by years. Once a destination switches off or dials down its tourism offering, Fáilte Ireland estimates that it can take ten years to get it back. The tourism demand will not simply return when things return to normal - they probably never will. We will never return to what we had two years ago. The market moves on, especially the highly competitive international market. One of my colleagues spoke about bus tours looking to Scotland and elsewhere because they cannot get accommodation here. The tourists and bus tour operators will go elsewhere, and tourism businesses in destinations where 20% or more of their bed stock is under contract are struggling to get going in off season. As I mentioned, it is budget accommodation that is gone, such as two- and three-star hotels and guesthouses.

The Minister has been informed that hotel bed shortages, as a result of accommodating refugees, have led to 10,000 tourism jobs being displaced in the past year, the majority of which are in the accommodation sector. That figure is staggering and is causing huge damage to tourist areas across Ireland. Some popular tourist towns have been impacted, such as Killarney, for example, where the impact on revenue to April of this year is estimated at €100 million, with 2,722 jobs being displaced. In Westport in my own county of Mayo, 898 jobs have been displaced, while Bundoran in County Donegal has seen 465 jobs go elsewhere. Westport is the jewel in the crown of Mayo tourism, with the town driving a lot of tourism for the county and surrounding region. We must keep tourists coming to County Mayo, and to do that we need hotel accommodation, to put it simply. We need reassurances from the Government and the Minister's Department for the communities affected that the decades of hard work building up the tourism industry have not gone to waste. We must hear what the plan is. I think there is an acceptance that there is not much we can do this year about tourism season 2023. What is the plan for 2024?

An analysis of all Fáilte Ireland-registered accommodation and the percentage contracted by the State shows a clear picture of what parts of the country are most impacted. In County Leitrim, 85% of all Fáilte Ireland-registered accommodation is contracted by the State; in County Longford, 70%; in County Offaly, 58%; in County Donegal, 53%; in County Mayo, 35%; in County Sligo, 44%; in County Roscommon, 40%; and in County Galway, 25%. In some of those counties - I think of Longford in particular - they are working hard to build up their tourism industry. Senator Carrigy spoke about Center Parcs and the positive impact it is having on the community. They will have no chance if they do not get tourist accommodation back in for tourists. That must be addressed in the short term, not in five or ten years' time. This reduction in tourist accommodation basically translates to a reduction in tourists coming into an area. The hotels are handsomely paid but other related businesses that rely on hotels being full of tourists are suffering, like the local pub, the local coffee shop and the local restaurant. We are losing jobs from the sector at an alarming rate. There has been an effective silence from the Government on this particular issue. What is the plan? What is the plan for next year and the year after? I am aware of the Minister's comments that there will be a reduction in reliance on accommodation in the hospitality sector, but we need to hear more detail about that and when it will happen. It does not do much to allay the fears of many of those working in this sector and those in the regions and in rural areas.

Fáilte Ireland has been reasonable in its asks for Covid-like supports for the businesses impacted, and I support it in this request. It is the least we can do, given that the damage to the sector has been inflicted by Government policy. The VAT rate will need to be extended, and a targeted rates exemption also needs to be put in place. It should not apply to hotels being well paid from their contracts with the State. People are making a lot of money and now prospective accommodation providers are speculating on property with a view to accommodating the State as opposed to providing tourist accommodation, because the former pays so much more. The immediate issues for tourism are pressure on rates, fewer touring businesses, suppressed demand and lower footfall. The longer term, systemic implications are the undermining of the viability of a complex ecosystem of tourism, SMEs and ancillary service providers. Tourism is a complex ecosystem. The knock-on impact has already been alluded to. with many different businesses rely on each other for success and the destination's attractiveness. That point is key. If the attractiveness of a particular destination takes a hit, all the tours and businesses in that area are affected. This is a long-term problem which is difficult to reverse. It takes years to build up a good reputation and only minutes to destroy it.

Has the Minister discussed extensively with the Minister, Deputy O'Gorman, and party leaders what the plan is? What alternatives will be put in place? When will we see the rapid-build modular housing we were expecting? Has the use of Army barracks been explored? There is an acceptance, as I said, that we did what we needed to do for the past year because it was an emergency situation, but it has been over a year now and we need to hear a plan for next year. This issue is not going to go anywhere. We need to know what will happen for season 2024, 2025 and beyond.

We need a clear commitment from Government that there is an intention to stop contracting tourist accommodation for State purposes. As long as this gravy train keeps chugging, people will speculate and invest in accommodation for State purposes. We want and need tourist accommodation back for tourists. If tourists do not come to our regions, we will not have the knock-on businesses which depend on it. I think of a town in County Mayo, Newport. The greenway goes through the town and because of tourists coming in a bike shop and two coffee shops opened and the hotel reopened. That is the impact of tourism on an area in the regions. If it remains as lucrative as it is now to provide accommodation to the State, then some of the hotel accommodation currently contracted will never come back into the system. Something must happen now. To end on a positive note, we can see the problem coming down the tracks. Let us put a plan in place and do something about it now.