Seanad debates

Wednesday, 5 April 2006

8:00 pm

Margaret Cox (Fianna Fail)
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I am glad we are discussing this issue in the Seanad this evening and I am delighted the Minister of State at the Department of Transport is here to outline the details of his discussions with the Dublin Airport Authority. However, it saddens me that we need to have this discussion at all. It would have been much better if we could have considered the sale of Great Southern Hotels not as a disposal, but in the context of moving forward. We should be discussing making a decision as to what we could do to support the hotel group, which has been central to the development of tourism and industry here.

The Minister of State knows I have a deep interest in the success of the hotels run by Great Southern Hotels on the outskirts of Galway city and in Eyre Square. Both hotels have played an enormous role in the development of the city. It is insane that the Dublin Airport Authority can now suddenly decide to asset-strip all such assets by selling them to the highest bidder. Are we becoming a country of developers or will we focus on sustainable development? We should ensure that we sustain development in that area for our children and our tourism industry. We should value the work and effort put in by more than 660 employees in the group in the country. While in the past the group made considerable profits, it is true that it is going through a difficult period. No Government or authority can sustain losses of €6 million.

I appeal to the Minister of State to tell the Dublin Airport Authority a number of things. Why do we need to sell the assets? I remind the Minister of State that the railway line from Galway city to Clifden was torn up. We got rid of that asset yet people in Galway are now asking why we did not keep it. The same issues will arise when we sell the Great Southern Hotels. People will ask why we did not keep the Corrib Great Southern Hotel. We could have developed its tourism and conference business. It is on seven or eight acres of land in State ownership. We could have done something with it and instead we are letting it go to the highest bidder, which could result in British chain stores coming into the Great Southern Hotel in Eyre Square.

What kind of image of Ireland is that to sell to the world? We will become like any high street in the UK. Where is our uniqueness? Where is our tourism going?

Why are we selling these assets? Next, the Tánaiste and Minister for Health and Children will decide we no longer need Merlin Park Hospital and it will be sold to get money. We do not need the money. We do not need to get rid of the assets. We do not need to sell Great Southern Hotels in a willy-nilly way that solves problems for Dublin Airport Authority and does nothing for the rest of the country.

There has been no talk of what the authority will do with the money. If we decide to sell the hotels where will the money go? It certainly will not come to Galway. Who created the asset? It was in State ownership. While it might be acceptable for the authority to take back the money invested by it and by CIE, the profits and the additional value accruing due to property valuations need to stay in Galway city.

If we must sell the Great Southern Hotels we must look after the staff, people who have given their entire lives to the group. They are entitled to be cared for, as they are employees of the State. If we are to sell the hotels, I demand that the money stay in Galway. I also demand that the hotels be sold as a going concern and that some of the hotels are kept so that we can continue to build and sustain the tourism industry in the west. We are losing bed nights to Dublin and the east of this country on a nightly and weekly basis. We need to stop this division between east and west and stand on our own two feet. We need to demand the things to which we are entitled. We are entitled to retain the Great Southern Hotels group in State ownership. We are entitled to ensure that the group's assets are not stripped and sold to the highest bidder. If that happens, however — I accept with a certain sense of inevitability that it will happen, through no choice of mine — the staff must be looked after and the money that is received on foot of those assets should not be sold to fund the Dublin Airport Authority's pension fund. Such money should not be invested in the development of Dublin Airport — it should return to County Galway and the city of Galway.

This is not just a Galway issue. My colleague, Senator Coghlan, who is not present this evening, has supported me consistently on this issue. We have supported each other — it is not as if I am leading the way in this regard. He has fought the fight for County Kerry and the Great Southern Hotel in Killarney. We are on the same page. We agree completely about this situation. We cannot let it go. These are State assets. The Government should tell Dublin Airport Authority that it cannot proceed in the manner that has been suggested. I look forward to hearing the response of the Minister of State, Deputy Gallagher.

Photo of Pat GallagherPat Gallagher (Minister of State, Department of Transport; Donegal South West, Fianna Fail)
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I thank Senator Cox for raising this issue and giving me an opportunity to respond to her comments. As the House is aware, the Great Southern Hotels group is a wholly owned subsidiary of the Dublin Airport Authority. The chairman of the authority informed the Taoiseach and the Minister for Transport last February that the board of the GSH group had decided that it had no option, in the best interest of all its stakeholders, other than to sell the hotel chain as a going concern. The board took that decision with regard to the company's poor financial performance, the negative outlook for the business and the inability of the board of the authority to continue to support Great Southern Hotels financially. The chairman of the authority informed the Minister at that time that his board had endorsed the decision of the board of the GSH group and concluded that it should facilitate the orderly disposal of the hotels as a going concern. The authority has informed the Minister that it has decided to continue to provide financial support to the GSH group this year, to facilitate the continuation of normal operations and an orderly process of disposal of the hotels. The group has assured all its staff, customers and business partners that it intends to operate normally during the disposal process.

The Minister, Deputy Cullen, has been informed by the Dublin Airport Authority that a process of full engagement with staff and unions on the implications of the board's decision is under way. The Government and the Minister have been aware for some time of the difficulties and challenges facing the GSH group in a competitive and changing hotel market, in which holidaymakers and business travellers are offered a great range and choice of hotel and other accommodation at home and abroad. The Government took note of the authority's assessment that the orderly disposal of the hotels, as a going concern, offers the best opportunity for the hotels to reach their full potential in the niche markets to which they are best suited. The disposal will also enable the hotels to contribute to the development of tourism in their localities and to their communities.

The Great Southern Hotel group has retained advisers to examine all aspects of the proposed disposal of the hotels. The Minister understands that the executive chairman of the group and the advisers, together with the senior management of the group, have visited all the hotels and met the staff to discuss the difficulties being faced by the GSH group and the implications of the decision to dispose of the hotels. A programme will be put in place to minimise the impact of the decision on the day-to-day business of the hotels. The Minister recently met trade union representatives from the GSH group to discuss their concerns about the future of the hotels. He understands that meetings have also taken place between the unions and the Dublin Airport Authority and that further discussions are planned. That the authority has given an assurance that it will continue to support the hotels financially during the rest of this year is a clear indication that the hotels are unable to support themselves.

I accept the points made by Senator Cox, who has a deep interest in the Great Southern Hotels group. I am quite familiar with the Eyre Square and Corrib hotels and I appreciate that they have played a great part in the development of the city of Galway. I assure the Senator that I will convey her concerns about the staff and the future of the hotels to the attention of the Minister, Deputy Cullen, who will convey them in turn to the Dublin Airport Authority. I reiterate that the decision that was taken by the GSH group was endorsed by the authority and noted by the Government. I assure Senator Cox that the Minister and I will monitor the situation closely.