I move that the Bill be now read a Second Time.
The purpose of the Bill is to increase to £1.5 million the fund of £500,000 which was established under Section 2 (1) (b) of the Tourist Traffic Act, 1959, for the giving of grants by Bord Fáilte Éireann for the development of holiday accommodation. Under the Bord Fáilte grant schemes, cash grants of 20 per cent are available towards the cost of providing additional hotel bedrooms, either by way of constructing new hotels or by additions to existing hotels. Grants of 20 per cent are also available for general improvement works in hotels such as the provision of central heating, the conversion of bedrooms into bed/bath units and other structural improvements. Two new grant schemes were added in July, 1962, under which 20 per cent grants are available for the construction or improvement of accommodation for staff and for the provision of entertainment facilities for guests, for example, recreation rooms, tennis courts, putting greens and so on.
In addition to the grant schemes, hoteliers have the advantage of a State guaranteed loan scheme which assists them to raise capital on favourable terms, and Bord Fáilte also pay grants from their general funds towards the interest charges on moneys borrowed, whether under guarantee or not, for extension or improvement works. Hoteliers improving their premises qualify for a remission for seven years of two-thirds of local rates attributable to the improvements and there are also valuable income tax allowances in respect of expenditure incurred on development works.
As a result of the incentives available, the volume of accommodation— which a few years ago was a major bottleneck in the tourist industry—has increased substantially. The total number of registered rooms in hotels and guest houses increased from 16,642 in 1958 to 19,630 at the beginning of this year, an increase of almost 3,000. Approximately 1,800 rooms were added in the top grades—A Star and A— and nearly 1,500 in grades B and B/C. Accommodation in the lower two grades, C and D, showed a fall of nearly 300 due to various reasons— premises going out of business, or establishments improving their accommodation and moving into higher grades.
A good deal of attention has been focussed on the building of new top grade accommodation, especially the new Intercontinental Hotels in Dublin, Cork and Limerick. The opening of these hotels and the extension of existing first-class hotels are welcome developments because until now we have not been able to meet the demand for first-class accommodation. Tour promoters and travel agents have been reluctant to promote certain categories of traffic to this country because of our inability to guarantee accommodation of the requisite standard and much business, especially from North America, has been lost as a result. We will now be in a position to cater adequately for this traffic. The Intercontinental Hotels will form part of an international chain of hotels and will enjoy the active support of the sales and promotional effort of the Irish Air Companies, who are large shareholders, and of Pan American Airways who are associated with the project through their subsidiary company, Intercontinental Hotels Incorporated. I have no doubt that considerable new business will accrue to this country through these hotels and that the benefits will be evident in our future tourist income.
Targets in top grade accommodation are now assured and for some time past, Bord Fáilte have not been prepared to encourage any additional expansion of first class accommodation except where the promoter is in a position to generate additional business for the extra accommodation.
Progress in Grade B and the lower grades, while not so spectacular, has been not inconsiderable. The current Bord Fáilte Guide to hotels and guest houses has 1,226 more rooms in Grade B and 252 more in Grade B/C than in 1958. There is, however, still a need for development of accommodation in these grades—in some cases for extension, in others for modernisation and improvement. Although the top grade hotels bring very valuable additional visitor traffic, we must continue to look to British visitors of moderate income to comprise the main bulk of our tourist trade. There is an increasing trend nowadays towards the inclusive tour—the package holiday based on all-in tariffs. There is a large market in Britain for this very type of holiday and this year Córas Iompair Éireann and Aer Lingus are co-operating in a new scheme of package holidays based on a number of selected centres.
There is considerable scope for the development of this traffic but the availability of suitable accommodation is a limiting factor. We need to have in recognised tourist areas moderately priced accommodation able to cater for parties of sixty and upwards for up to two weeks at a time. Many of our resorts, however, cannot offer this facility, and I have asked Bord Fáilte and Ostlanna Iompair Éireann Teo— the CIE subsidiary which now operates the Great Southern Hotels—to study the economics of providing new hotels in western and other tourist areas not already adequately served by medium-priced accommodation. Existing hotels in the middle and lower grades tend to be on the small side. Grades B/C, C and D account for 58 per cent of the total number of hotels but only 35 per cent of the total number of hotel rooms. The average size of hotels in these grades is 14 rooms and there are 80 hotels with less than ten rooms. In addition, many hotels in these grades would benefit from modernisation work but only 8 per cent of them have utilised the Bord Fáilte improvement grant scheme.
I would like to make it clear that the grants for the development of accommodation have since their inception been equally available in respect of all grades. The fact that progress in the top grades has been more significant is not due to any lack of encouragement from Bord Fáilte for hoteliers in the lower grades contemplating extensions or improvements. Bord Fáilte must, of course, insist on certain minimum standards, and the Board operate an advisory service for those who need it. The fact that 1,500 extra rooms are now available in Grades B and B/C, in different parts of the country, is proof of a positive promotional policy on the part of Bord Fáilte towards the provision of middle-grade accommodation. The number of applicants, however, have simply not been sufficient.
It will be clear from all this that despite the progress made by the hotel industry in recent years we cannot claim that all problems have been solved or that nothing remains to be done. I, therefore, asked Bord Fáilte some time ago to undertake a complete examination of the whole position in regard to accommodation for visitors. I am anxious to ensure that current needs and requirements are identified and that policies are directed towards meeting those requirements. Bord Fáilte have now carried out this review and have conveyed to me their views as to the manner in which the programme for accommodation should be directed in the future. There are many aspects of this question that must be given careful consideration and these are now receiving my attention.
Whatever the emphasis in future policies, it is clear that the grant schemes must be maintained for a further period. As the original fund of £500,000 has been exhausted new legislation is necessary to enable further moneys to be made available to Bord Fáilte. Grant commitments in the present financial year will amount to over £300,000 and it is necessary to provide at least £350,000 for the continuation of the schemes after this year; that makes about £650,000. Bord Fáilte hope to secure the provision of additional accommodation of the holiday camp or holiday village type and this could involve grants of a further £120,000. In addition, if we find that it is feasible to go ahead with new middle-grade accommodation in resort areas, we would need to have grant moneys available, amounting possibly to £200,000. These figures are of course very tentative but they indicate the possible future requirements. I am proposing, therefore, that a new limit of £1.5 million be placed on the holiday accommodation fund, enabling additional moneys not exceeding £1 million to be paid to Bord Fáilte. Issues from this fund are, of course, subject to my approval and the approval of the Minister for Finance. Moneys paid to the Board from this fund are additional to their annual grant for general activities and to the money voted annually from the special fund for the development of major tourist resorts.
Apart from hotel development, Bord Fáilte are also giving close attention to the position in regard to other forms of accommodation for visitors. Guest houses can obtain assistance for development work under the guaranteed loan and interest grant schemes. In the last few years, Bord Fáilte have extended their activities to take in the inspection and listing of unregistered holiday accommodation and there are now available in respect of almost all the holiday and angling centres lists showing the boarding houses and private houses which offer accommodation for guests as well as houses available for renting by visitors. These lists show a total of 3,370 bedrooms providing room for 5,240 people. Accommodation for visiting students is also being listed, and lists are now available with accommodation for 400 students. The possibilities presented by colleges and other institutions which are vacant for a period during the summer are also being examined. Bord Fáilte now have a list of farmhouses which offer holiday facilities and they hope to develop this type of holiday attraction in future years. Particular attention is being given to the possibilities of enabling the small farm areas of the country to benefit to a greater extent from tourism, and I hope that these developments may also lead to further extensions of An Óige's chain of Youth Hostels.
There is another aspect of the hotel industry which I would like to mention here even though it does not arise specifically from the present Bill, that is, the question of staff training. With the expansion of accommodation the shortage of qualified staff has become a fairly serious problem and, in order to deal with it, Bord Fáilte, in conjunction with the hotel industry, the trade union concerned and vocational educational interests, have established a new organisation to undertake responsibility for an expanded programme of staff recruitment and training. This body is entitled the Council for Education, Recruitment and Training in the Hotel and Catering Trade or, briefly, CERT. Initially, half the cost of this new arrangement will be borne by Bord Fáilte and the balance by the other interests concerned.
Deputies may recall that in March last they agreed to a Supplementary Estimate for tourism which included additional moneys for Bord Fáilte for this purpose. Fairly substantial financial support from Bord Fáilte will be necessary in the early stages to ensure that the expanded training programme gets under way but I would hope that in due course the hotel industry and those engaged in it will assume increasing responsibility for matters pertaining to staff training and that CERT will ultimately evolve into an organisation supported by the hotel industry itself. I would hope that an industry as large and as significant as the hotel and catering industry would aspire to an organisation of professional status concerning itself not only with practical questions of staff recruitment and training but also with the general question of raising professional standards in the industry.
I recognise, however, that the hotel industry is not yet sufficiently organised to undertake anything on this scale at the present time. It is necessary, therefore, that Bord Fáilte should not only give direct financial support in the early stages but should also assist in the collection of the hotel industry's contribution. This has been agreed with the Irish Hotels Federation. I propose, therefore, to authorise Bord Fáilte to take account of the need to provide for the activities of CERT when prescribing registration fees. This will, of course, entail increased fees but I am confident that proprietors of registered premises will recognise and appreciate that the money will be applied towards the provision of qualified personnel for the industry. It must be remembered that the trade union and the vocational education authorities are also prepared to make their contribution. The hotel industry has received, and under this Bill will continue to receive, very substantial State assistance and it is not unreasonable that it should make this contribution towards the solution of the staffing problem.
The hotel industry is more active and enterprising today than at any time in the past. The fact that the £500,000 grant fund provided in 1959 has been exhausted is an indication of the rise in the rate of investment of the industry because the Bord Fáilte grants, being limited to 20 per cent of approved works, must be matched at least four-fold by hoteliers' own spending. In fact total investment in hotel development has been running at more than £1 million each year. There are encouraging signs also that hotel interests and others associated with the tourist trade are prepared to undertake measures to supplement the efforts of Bord Fáilte to develop tourism. There is, of course, a long way to go before the hotel industry can be regarded as fully equipped to meet the challenge of increasing competition and the other difficulties facing the tourist industry. There is a need to adopt up-to-date ideas in regard to lay-out, equipping and management of hotels including more modern methods of accounting and record keeping. Some hotels have come together to engage in co-operative advertising and promotion but there is scope for much more activity of this kind. Hoteliers must be prepared to study available markets and, where necessary, to go out after business, sharing the costs where advisable on a group basis. I know that rising costs are a problem for hoteliers as for everybody else but this makes it all the more important that our hotels should offer comfort, efficiency, and above all good value.
On the question of value, I should make it clear that none of our hotels, not even the Intercontinental Hotels which I referred to earlier, offer accommodation in the luxury category. The new hotels are classifiable by international standards, not as luxury hotels, but as top-grade hotels and they will fill a definite want in our tourist structure. As regards international price comparisons, my attention was drawn recently to a comparison of top-grade accommodation in 22 major cities, carried out by the Financial Times in October, 1962, and according to this comparison only Athens offered lower prices than Dublin.
Figures relating to last year's tourist season, which have become available recently, show that the forebodings which were voiced in relation to a recession in 1962 were not justified. The gross earnings from visitors, including the visitor receipts of Irish transport companies, amounted to £48.9 million, an increase of £2.4m or 5 per cent over the corresponding figure for 1961. Since 1957, when our visitor income was £32.4 million, the increase has been £16.5m. or 50 per cent and, even allowing for the change in money values since then, this represents a very real increase in the value of tourism in the economy. It must be said, however, that the rate of growth in 1962 was lower than over the past five years generally. Returns of hotels and guest-houses show that the number of visitors from the Six Counties and from North America fell by 4 per cent in 1962 but on the other hand hotels recorded 6 per cent more visitors from Britain and 8 per cent more from "other areas". Bord Fáilte believe that the slowing-down of the rate of growth in 1962 was caused by special conditions and they expect the upward trend in the number of visitors to continue. If we are to reap the benefit of this increase it is essential that accommodation be available to meet the needs of all categories of visitors, that traffic should not be diverted from Ireland because accommodation of the requisite kind and at the right price level is not available. The purpose of this Bill is to ensure that the incentives for the provision of the necessary accommodation will continue to operate and I therefore confidently recommend the Bill for the approval of the Dáil.