Seanad debates

Tuesday, 11 May 2010

5:00 pm

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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Cuirim fáilte roimh an Aire. I tabled this Adjournment matter last week but, unfortunately, it was not selected until today. I acknowledge the work done by the Minister since last week when I first tabled this motion. There is need for a wider debate on the strategy we as a country need to have in place for tourism if we are to attract more visitors and to assist the Irish tourism industry, and not just in monetary terms.

The Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs last week met a delegation from Tourism Ireland, Fáilte Ireland and the Irish Hotels Federation. While not wishing to be negative, the tourism industry is in difficulty, many people employed in it are losing their jobs and the country is losing revenue as a result of falling tourist numbers. Leadership is required from Government if we are to stop this never-ending spiral.

There were one million fewer visitors to Ireland last year, leading to a fall of €1 billion in revenue. I understand from speaking to people in the hotel and restaurant industry that we have excess bed capacity in hotels. However, that is perhaps an issue for another day. To date, 30 hotels and 800 pubs have closed, resulting in the loss of approximately 10,000 jobs. If we are serious about job retention and creation in our tourism industry, we must do all we can to prevent this rot. We must recognise that the daily job losses in this area are a consequence of bad political, business and planning decisions.

The Irish Hotels Federation identified at last week's committee meeting a number of positives which we must ensure are highlighted, including the quality of our hotels and guesthouses, many of which are of a much higher standard than those in any of our European competitors. The federation also said we must highlight customer satisfaction. The Irish Hotels Federation has, where possible, reduced costs, thereby allowing its cost base to become more competitive. There has been much debate on the competitiveness of the industry. I am aware of discussion within Government about joint labour committees and the cost of working on Sunday in our restaurants and hotel industry. There is much that can be done by Government, including scrapping the departure tax because it is hurting the economy. This is an issue on which I am sure I will hear political argument from the Minister. VAT rates on hotel accommodation and restaurants are also hurting the industry. We must take care of our small and medium restaurants and hotels.

Last week's Dine in Cork week, which received massive promotion by the Evening Echo, was a huge success. One could not get a restaurant booking in Cork last Saturday night owing to the huge demand as a result of reduced prices. The quality of food and service was unbelievable. I know from speaking to friends of mine who work in the industry, be they chefs or restaurant owners, that it was a huge success. I know, having visited Boston, which runs a very successful restaurant week, that we must think outside of the box in terms of coming up with ways to entice people into our restaurants. This is not just about handing out aid.

We have been told by Government that the tourism industry is worth €500 million. The Taoiseach, during his Cabinet reshuffle, stated that the tourism industry is one of the key pads for the relaunch of Ireland. We need to reduce our taxes, including the departure tax, and encourage people to visit Ireland if we are to rejuvenate our ailing tourism industry and promote businesses which are indigenous to Ireland. In particular, we must address with the banks the issue of liquidity and cashflow for restaurants and businesses. We must also assertively and aggressively promote the domestic market. I am aware, having heard this morning on "Today with Pat Kenny" and previously on other radio stations, that there is tremendous goodwill for the tourism industry and Ireland. It is important we sell the island of Ireland to the people of Ireland. One has only to take a Twenty-six Counties tour, as promoted in the Shannon campaign, to appreciate the product we have to offer.

I look forward to hearing the Minister's reply. We have an extraordinary product that should be sold domestically and internationally. I commend the chief executive of Aer Lingus on his bravery in terms of seeking different data in respect of the Icelandic volcano. While I am not qualified to make any judgment in this regard, I believe he is right to challenge the status quo.

Photo of Mary HanafinMary Hanafin (Minister, Department of Arts, Sport and Tourism; Dún Laoghaire, Fianna Fail)
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I thank Senator Buttimer for raising this issue. The volcanic ash issue is not alone important in terms of its impact on us but in terms of its impact on the Irish economy, jobs and revenue.

The total value placed on the Irish tourism industry is approximately €5 billion, including domestic and international tourists to Ireland. Last year, seven million tourists visited Ireland. While this figure was down on the previous year, it is a significant number of tourists. The tourism industry provides employment throughout all the regions. Thus small and medium-sized enterprises are benefitting. The tourism budget for this year has been increased owing to the Government's commitment to ensuring this industry is supported and is in a position to attract people to this country.

Senator Buttimer mentioned some of the terms key to the industry, including quality. The quality of service we offer is something we are always happy to promote. The Senator also referred to the quality of our food, festivals and activity holidays. A range of new initiatives are being addressed. We are also focusing on promoting value. While 98% of people who came on holidays to Ireland said they were happy with their experience here, somewhat fewer, approximately 70%, believed they received good value, which must be addressed.

There is a robust policy framework surrounding Irish tourism. The Tourism Renewal Group examined the sector in 2008 and set out what would be the framework up to 2013. It examined issues such as the impact of current challenge and recovery actions in terms of trying to set tourism back on a growth path. We are vigorously pursuing this framework with huge co-operation from all the industry and agencies, including Fáilte Ireland and Tourism Ireland.

The tourism budget was increased by 2% to more than €150 million, maintaining funding in real terms for the tourism marketing fund. We also trebled the funds for product development. Again, there are some exciting proposals in this regard coming forward from far-flung regions of the country. Tourism was included in cost-cutting measures to support enterprises and jobs, including the employment subsidy scheme and credit review system, which will be important in light of the banks not freeing credit and liquidity, as Senator Buttimer stated.

Additional specific measures, including changes in excise duty on alcohol and VAT and the introduction of the innovative rail travel initiative for senior citizens visiting Ireland, will also help the sector. I believe the rail travel initiative has huge potential as it will mean everybody over the age of 66 years, irrespective of from what country they come, will be able to avail of free rail travel in Ireland. There is currently a huge marketing campaign in this regard.

This year will be challenging. We had already set a target of increasing the number of tourists by 3% when hit by bad weather in January and February. This was followed by problems with sterling, the poor economies throughout Europe and the eruption of the Icelandic volcano. There is no doubt but that we have met some serious challenges. The tourism industry is fighting hard for business. Tourism Ireland, as the body responsible for promoting Ireland as a visitor destination, is focusing on major markets likely to deliver immediate returns, in particular Great Britain, Germany and the US. Only last week I launched a €20 million summer marketing campaign focusing on those markets. Some 60% of our visitors come between May and September and, as such, we still have an opportunity to attract visitors to this country.

Fáilte Ireland has launched a €4 million advertising and promotional campaign to encourage holidaying at home this year. It will seek to boost promotion of business tourism and the opening in September of the new National Conference Centre which undoubtedly will enhance our capacity to attract international events. Fáilte Ireland has been provided with €20 million for its capital investment programme this year to improve attractions, activities and tourism related infrastructure. It will also invest in business, sporting and cultural events.

As the Senator mentioned, tourism businesses, like many others, are experiencing difficulties with regard to capacity, costs and credit supply. Some of these will be addressed by the tourism industry and others will be addressed by the Government, for example the supply of credit to businesses and the reduction in energy prices. The Government and agencies will continue to work to help the sector, whether in stimulating demand, helping to address costs and productivity, or securing access to credit. Of course, the tourism industry itself has made great strides to reduce costs and increase productivity.

Fáilte Ireland is working closely with tourism businesses throughout Ireland. Business supports assist key tourism businesses to increase their international customer base, better manage costs, improve overall performance and marketing particularly on the web and sustain employment levels. I mentioned the €20 million to be spent on marketing and that will be used on 41 different websites in 19 different languages. The most up-to-date facilities are being used for marketing.

I mentioned the volcano and the difficulty and challenges it has formed. The Senator mentioned the meeting we had yesterday and I must state the response of the tourism industry and the agencies has been very positive and we look forward to developing a customer charter which will be based and build on the good experience we had in the past month. The hospitality industry responded in such a way as to ensure that anybody who was delayed while in Ireland was well looked after; they did not face increased accommodation charges, many of them had their laundry done and they were given free access to activities. Building on that, we want to send a message throughout the world that in the unlikely event one is delayed in Ireland one will be looked after. We will do this confident that the Irish tourism industry will respond as this will be a voluntary code by the industry itself, supported by Fáilte Ireland and promoted well.

The message is that Ireland is open for business; we are accessible and we will look after people. It is a difficult time but with a good policy framework, the increased investment we have, the partnership between the public and the private sectors and the good State agencies we have I am quite confident that Ireland's tourism industry will rise to the current challenges. I genuinely look forward to continuing to work with it.

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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I thank the Minister for her reply. However, I note she did not make any reference to the travel tax. Based on her experience yesterday, is the Minister willing to host a tourism forum similar to what happened in Farmleigh regarding the economy? I am concerned that the top end of the market is under severe pressure. We are all driven by value and competitiveness and the top end of the market is falling. Dublin city centre is lacking upper-end hotel accommodation. What is there between the top of Gardiner Street to the top of Grafton Street? Cork does not have a convention centre and does not receive assistance from Government in this regard.

Photo of Mary HanafinMary Hanafin (Minister, Department of Arts, Sport and Tourism; Dún Laoghaire, Fianna Fail)
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I would not underestimate the value of the Dublin convention centre, which has the potential to attract major conferences, particularly medical, scientific and pharmaceutical conferences. Our aim is that when people come to Ireland for these that they take an extra few days to play golf and visit the other regions.

The airport tax is a hot potato as some would say it is impacting on tourism. We do not yet have any evidence to state that is the case because so many other factors are impacting on tourism. The difficulty is that the Department of Finance reckons it will bring in €125 million this year and that would be difficult to find somewhere else. Over the coming years we would like to keep it under review.

We have a tourism response group which meets if an issue arises. It meets regularly. I attended yesterday's meeting with Fáilte Ireland, Tourism Ireland, the Irish Tourist Industry Confederation, the Irish Hotels Federation, the Incoming Tour Operators Association, representatives of the bed and breakfast sector and the Department. We regularly get together with all the representative bodies.