I move:
That a supplementary sum not exceeding £10 be granted to defray the charge which will come in course of payment during the year ending 31st day of March, 1968, for the Salaries and Expenses of the Office of the Minister for Transport and Power, including certain Services administered by that Office, and for payment of sundry Grants-in-Aid.
This Supplementary Estimate is necessary to provide an additional sum of £308,000 in the present financial year to cover expenditure by Bord Fáilte Éireann as follows:
(a) £52,000 to compensate for the effects of devaluation on the cost of the Board's committed marketing budgets in North America and the continent of Europe;
(b) £206,000 to exploit the opportunity presented by devaluation to attract more visitors; and
(c) £50,000 to supplement the funds of the regional tourism organisations.
It is proposed to provide these additional funds under Subhead F.1 of the Vote for the Department of Transport and Power from which the Board's general activities are financed. It has been found possible to set off against the amount required, savings of £307,990 on other subheads of the Vote with the result that the net amount now required is a token provision of £10.
The necessity for the Estimate arises mainly from the circumstances created by devaluation. As Deputies are aware, the £ sterling was devalued last November. A considerable portion of the promotional activities of Bord Fáilte is carried out in countries such as the United States, Canada, France and Germany which have not devalued. As a result of devaluation the cost in sterling of activities in these areas has increased by more than 16 per cent and Bord Fáilte have calculated that the cost of maintaining expenditure at the level provided for before devaluation took place will require an additional amount of £52,000 in the present financial year.
In addition, it is proposed to launch a more intensive publicity and promotional campaign abroad for the purpose of exploiting the opportunity which devaluation presents of attracting more visitors to this country. Devaluation will mean lower prices here for visitors from countries which have not devalued. There is the further consideration that costs in most European countries have increased for British holidaymakers. It is proposed accordingly, to intensify marketing activities in North America, continental Europe and Britain to secure maximum benefit in terms of extra tourist revenue from these areas.
It may not be generally appreciated that because of the improvement in the rate of exchange for visitors from North America and Europe it will be necessary to attract more visitors from those areas if we are to maintain our earnings in terms of the currencies of those countries at the level which obtained prior to devaluation. Bord Fáilte have calculated that before our tourist revenue begins to benefit from devaluation, it will be necessary to attract about nine per cent more visitors from North America and continental Europe than we would have had to do without devaluation. There is the possibility of course, that the more favourable rate of exchange which is now available here will induce visitors from non-devalued countries to spend more here than they would otherwise have done. It would be unrealistic however, to place undue reliance on this possibility and it is clear that the only certain way of increasing foreign currency revenue is to attract more visitors.
I think it is important that we should not exaggerate the benefits which devaluation will confer on tourist earnings or assume that we can obtain these benefits without effort on our part. While it is true that the better exchange rates will result in lower prices in this country for visitors from North America, France and Germany it should be remembered that transport costs to this country have not been reduced by devaluation; in fact in some cases these costs have gone up. Fares for travel constitute a large part of the cost of a holiday and in the case of United States visitors to Europe amount to about one-third of the total cost.
Most American tourists include a number of European countries in their itineraries and since prices in such countries as France and Germany have not been affected by devaluation, the response from United States visitors may not be as positive as the fall in the cost of holidays in Ireland would lead one to expect. However, devaluation does provide an opportunity to persuade more North American visitors to Europe to include Ireland in their itineraries.
The fact that France and West Germany are among the countries which have not devalued their currencies, coupled with the introduction of the new car ferry service between Le Harve and Rosslare next May, should provide a favourable opportunity to increase traffic from these areas. The Supplementary Estimate, accordingly, makes provision for additional expenditure on promotional activities on the Continent, mainly in France and West Germany.
It is hoped that devaluation will also result in increased tourist traffic from Britain to this country. The higher cost of holidays in most European countries for visitors from Britain together with the restriction on currency allowance for expenditure in non-sterling areas should help to influence British tourists who would otherwise have gone to Europe to visit Ireland instead. It is proposed to exploit this favourable situation as much as possible and the Supplementary Estimate includes a provision for additional expenditure on advertising and promotional activities in Britain.
Our prospects for increased tourist traffic from the United States must, of course, be viewed in the context of the proposals now under consideration in that country for the imposition of new taxes and restrictions designed to reduce expenditure abroad by American residents. As I have already informed the Dáil, we have made representations to the US authorities about the detrimental effects of these measures on our tourist industry. Bord Fáilte are convinced that there is a need for a carefully planned and judicious programme in the United States to present a constructive and positive message to the travelling public, travel agents and other members of the industry, and which would place a particular emphasis on student travel and other categories which are likely to be excluded from the restrictions.
Because of the present fluid situation about the American proposals, Bord Fáilte are proposing to embark on a publicity and promotional campaign which will permit the change or modification of their approach in the light of what may be the final outcome of the legislative proposals. In the implementation of the campaign the Board are aiming at the fullest possible co-operation with other interested organisations such as Aer Lingus, the British Travel Association and the European Travel Commission.
In addition to the amount of £258,000 which I am proposing to provide for marketing activities abroad, the Supplementary Estimate also includes an amount of £50,000 for issue to Bord Fáilte for the purpose of easing the financial difficulties of the regional tourism organisations.
Most Deputies will be aware of the activities in their areas of the regional tourism organisations. I am glad to say that these organisations, which are representative of the local authorities as well as tourism and general business interests, have gone about their task in a most vigorous way. In their few years of existence they have established a network of 100 tourist information offices providing a standard national service of information and general customer facilitation as well as a special room reservation service free to all visitors. In 1967, these offices serviced 1½ million inquiries and made reservations totalling 343,000 bed-nights.
The room reservation service is especially significant as it justifies our claim that it is easy for a tourist to be mobile in Ireland. The service has earned numerous commendations from motoring tourists and it is the most important means of marketing the supplementary accommodation being developed under the farmhouse and the special development area holiday accommodation schemes. In addition, the regional organisations have undertaken a wide variety of tasks including the expansion of supplementary accommodation and the provision of information literature. In 1967 they produced 88 items of literature comprising 3.75 million pieces.
The finances of the regional organisations to date have come mainly from the local authorities and Bord Fáilte. Local authorities' contributions amount to £62,000 in the current year. Bord Fáilte undertook to provide an amount of not less than £143,000. Notwithstanding these provisions, it has been clear that the programme of activity being pursued by the regional organisations requires a much greater income. The organisations have accordingly instituted a programme for securing finances through membership in the private sector, mainly from the business community and it is expected that income from this source will amount to a sum of the order of £60,000/ £70,000 in the coming year. In the meantime it is essential to supplement support for the organisations in the current financial year to the extent of £50,000. This contribution will not be sufficient to relieve the regional organisations of all their commitments, a substantial part of which represents capital expenditure incurred in the provision of information and company offices which was financed from income and overdraft in anticipation of a rise in financial support from local authorities and the business community. I have no doubt that Deputies who are aware of the valuable services being provided by the regional organisations in the interest of the tourist industry will agree that these bodies are worthy of adequate support for their activities.
I should mention that the greater part of the money to meet this Supplementary Estimate has been found from a saving on the provision for resort development. I wish to make it clear that this does not indicate any change of policy in the Bord Fáilte scheme for the development of major tourist resorts. The amount provided in the original Estimate for this purpose in the present year was £500,000 but it is now clear that actual expenditure will not exceed £250,000. As Deputies are aware, the scheme is carried out by Bord Fáilte in conjunction with the local authorities and other local interests and it is a condition of the scheme that there should be a substantial local contribution towards the works. In the current year, local authorities found difficulty in contributing their share of the costs because of other commitments. The Board have been conducting detailed negotiations with the local authorities concerned and it is expected that progress in the coming year will show an increase in this important work.
As Deputies will see, the general purpose of the supplementary estimate is to re-allocate available funds with a view to ensuring the most effective use of these moneys in the light of current circumstances. In view of the importance of the tourist industry to the national economy, I strongly recommend the Supplementary Estimate to the House.