Tourist Traffic Bill, 1970: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

When the debate adjourned I was referring to the non-accountability of Bord Fáilte. I do not know how much control the board has over its executive, whether it has any control over it, whether it gives its executive any guidance as to policy or whether it makes policy. I just do not know these things for the simple reason that it is not accountable. In principle that is quite wrong. A board with the sort of budget this board has should be accountable; it is very dangerous to have it unaccountable to Parliament which provides the budget.

Marketing activities have been rewarded with success. Advertising has been impressive. I have no doubt this has contributed to the growth in tourist business over the past few years. That end of the board's activities has given general satisfaction. We should remember, however, that a great deal of the successful marketing was not carried out by Bord Fáilte alone. Aer Lingus must get a considerable amount of credit for their projects. There is no way of knowing how much is due to them and how much is due to Bord Fáilte.

Other activities of Bord Fáilte have not commended themselves generally to the people in the industry. There is the question of grading and the inspection of hotels. A set of arbitrary rules has been laid down. A hotel with so many bathrooms per bedrooms will get a certain classification. Because of its age it might not be possible for a hotel to provide the number of bathrooms per bedrooms Bord Fáilte lay down as necessary to qualify. But, in all other aspects—general appointments, furniture, management, dining room, amenities for guests over and above bed and lodging—it could be very much a grade A establishment, but it might be designated grade B because it lacked bathrooms with bedrooms. There has been dissatisfaction, too, with the approach of Bord Fáilte in inspecting hotels: it is felt that the approach of officials has been overbearing; that they are very conscious that they are the treasurers where the hotels are concerned and act accordingly.

A further criticism is that their system of receiving applications for grants, examining these applications and paying on foot of the applications, needs to be reviewed. We have had the situation that they ran out of money last year to the tune of £½ million which had to be provided so that Bord Fáilte could meet its commitments. There is something seriously amiss with the financial control in a body where that can happen to that appalling extent. This stems from the lack of accountability to some independent tribunal—let it be to this House or to the Comptroller and Auditor General or through some other system. I believe that lack of accountability is directly responsible for any financial trouble in which Bord Fáilte may have found itself.

I do not know if the Minister is satisfied with the board itself. From his speech, it would appear that he is not satisfied. He makes the remark that the existing board has done a magnificent job but that he is convinced it would benefit from an expanded membership in preparation for the challenges of the future. That might be a polite way of indicating that he is dissatisfied with the way they have acted in the past. If, in three or four years time there is further criticism of the board, will it be met by a still further increase in membership? At some time the Minister must face the fact that there may be dead wood on the board which must be removed. The board, in turn, may have to face the fact that there is dead wood amongst the executives which they will remove. The tax-payer is providing money but due to Bord Fáilte's lack of accountability we do not know the system in operation between the board and its executive staff: we do not know the relationship. Does the board lay down policy or does it accept the recommendations of its executives? Has it control over its executives? If an executive decides he needs a chauffeur-driven car can the board say "No. You will not have one. You can just as effectively drive your own car"? These are small points. Has the board control over its executives? Are these people absolute masters within the day-to-day workings of this body? I am afraid they are and that is not a good situation.

It would appear, too, from the Minister's speech that the amount of accommodation now being provided is adequate to meet demands. The unfortunate experience of this past season confirms that. In Athlone, the figures for bed nights for the month of May this year are only one-third of those of last year. It is a startling difference. The actual figures are— May, 1970, 324; May, 1969, 1,316. It is a common fallacy to argue from the particular to the general but we have heard so many disquieting reports this year that it might not be fallacious to do so in this respect this year. If that pattern prevails all over the country, then, undoubtedly, we have ample accommodation for our guests this year. If that trend is to be improved— it would need to be improved fourfold to be a big improvement—we would only be back where we were last year and therefore there is ample accommodation for the guests we can reasonably expect for some time to come.

At this stage, the bulk of Bord Fáilte expenditure should not be on accommodation but rather on the provision of amenities and recreational facilities for visitors. We lack the great attribute of continental tourist countries—constant sunshine. Given constant sunshine, it is a perfect holiday to lie all day on the beach. We have not got constant sunshine. Consequently we must provide entertainment for visitors. It is not beyond the wit of Bord Fáilte to devise ways and means of entertaining visitors. I suggest that it be indicated to the board that this matter should have priority in their activities over the coming winter and that, by and large, the finances available to them should be devoted towards putting into effect plans to provide plenty of recreational facilities for tourists. Imagination and careful thought should be given to this and the facilities provided should be different from what people could reasonably expect to have at home. People come on a holiday for something different. It is important that something different by way of recreation should be available for them. Drinking in a pub is no holiday for most British visitors. I am sure they would like something better.

It is hardly relevant to this debate to refer to the cost of living but unless the cost of living—and particularly the cost of what I might call the fringe activities of living, drinking, smoking and driving—are controlled, our tourist trade will suffer. The facilities for getting here with motor cars are now first class. I have heard criticism of the fares on the car ferries as compared with those on the ferries from England to the Continent. I am not competent to comment on that apart from the fact that it has been a possible factor in the reduction of the number arriving with cars. A more important factor is the price of petrol here. I think Bord Fáilte could consult with the Department of Finance or with the Minister as to the possibility of subsidising the price of petrol for foreign tourists. I do not know if this is still done on the Continent. It was done some years ago in France and as far as I remember in Italy also. There was a special rate for tourists when they were buying petrol. This could be a very important carrot to attract the Englishman over here with his motor car.

In the coming winter and for the foreseeable future, Bord Fáilte should ensure that their promotional activities are beamed at the easiest market, which is Britain. For the reason that there is no accountability to us—we are here discussing finance for Bord Fáilte and we have no control over how it is spent—I do not know what proportion of the money they spend on promotional activities in the United States or further afield. The mass market, which is the one we should be aiming for, is beside us. That is where the biggest effort should be made, unless, of course, we have priced ourselves out of catering for that mass market.

The idea of the rented cottage scheme to which the Minister referred is a commendable development because it is novel. It enables people to have a holiday here in a completely strange environment. This is the attraction of going to a foreign country. You do not want an ersatz version of what you have at home, or even a more expensive version of what you have at home, when you go on your holidays. It is important at this stage that there should be a rethink by Bord Fáilte on how they spend their money. The bulk of their spending for the foreseeable future should be to create recreational facilities here which will make a holiday in Ireland different.

I should like to thank the House for a very constructive debate on this very important matter so far as our economy is concerned. I should like to emphasise one fact which is recognised by anybody in business or by anybody in any form of commercial enterprise, that is, that one must look at the long term both in regard to what progress was made in the past and what progress is planned to be made in the future. A temporary cut-back of visitors should not be viewed with panic. A rational assessment should be made of the situation, taking into consideration what the achievements have been over a period of time, and what they are likely to be over a period in the future.

What I am trying to say, briefly, is that tourism is very important big business. It is a major revenue earner and we must view the matter in a business-like manner. That is why I insisted at all stages, in answering questions in the House, and in discussions I have had elsewhere, on saying that no real assessment of this year's tourist picture can be made until the end of the tourist season. Deputy Barry was in accord with that point of view during the discussion today. This makes commonsense.

What we had so far this year was a pattern where the tourist business is up over the first six months of the year, where it showed cancellations for the month of June, where it is now going ahead again on July of last year and where business looks like going ahead in August, September, and October on the corresponding months for last year. We can only have a real assessment of the total picture at the end of the tourist year. This makes commonsense and I should like to emphasise that point while, at the same time, being well aware of the problems that face the industry in this competitive age.

One must, at the same time, while facing up to the problems and seeking to achieve a solution of them, refrain from any panic stations, any immediate rushing into short term apparently remedial measures that might be of no particular value. For this reason I asked Bord Fáilte and the deputation from the Irish Hotels Federation, after very long discussions I had with each body, to prepare for me complete appraisal in depth of where they see the future of the tourist industry for next year and over the next five years. Each body has promised to have its report to me before the middle of September.

I want immediate action on this front because, if there is a problem, now is the time to diagnose it, assess it, and provide for the necessary finance and the necessary action to deal with it. For this reason I decided, following those discussions, to introduce an amendment to the Bill providing for my right to appoint two more directors to the board. I agree with Deputy O'Donovan's criticism that it is not desirable to have too large a board in any commercial enterprise and that possibly the ideal board might be one of five members.

I am faced with a situation in which I want to ensure that Bord Fáilte plan now—and by "now" I mean this autumn and this winter—for a tourist season next year that will expand at a greater rate than it expanded this year. I am inhabited at the moment in regard to the board, with members of the board having periods in office to run. I am inhibited from making any restructuring of the board at present because, eventually, this would involve legislation that might take a substantial period of time to prepare and put through both Houses of the Oireachtas. However, I can assure the House that this is a matter which I am examining.

My thinking behind the introduction of that amendment is to prepare now for the planning of the season just ahead of us. We can then make a thorough examination during the interim period to see what restructuring, if any, may be required in regard to the board as a whole. If legislation is necessary—and it will be necessary if any restructuring is to take place—I will bring that legislation before the House. That restructuring of the board, if it is necessary, is a long term operation and I am immediately concerned with making sure that the tourist industry next season goes ahead at a far greater rate than this season. That is why I will be bringing this amendment before the House in addition to the other matters in the Bill as originally drafted.

While I am on that aspect, I should like to assure Deputy O'Donnell and a number of other Deputies who raised this matter, that my intention is to appoint two people with a complete business and commercial approach to tourism. I want two people on the board, in addition to the present members of the board, who will adopt a thoroughly commercial approach towards all Bord Fáilte's activities in planning for the coming year and with particular emphasis—and here to a degree I disagree with Deputy Cooney —on marketing expertise and experience.

We must go after specific products selling during the off season. An excellent suggestion was made by Deputy O'Leary that assistance should be given by way of marketing grants, as is given by Córas Tráchtála to industry. We should seek to stimulate the people in the hotel industry, the people in the tour business and the people in the car hire business who are concerned about bringing people in here, and, if necessary, give financial assistance to them, to go out and get business. It is in this direction of actually getting people in here that the greatest success can be made.

I may add that any hotelier, big or small, whether he is the owner of a hotel chain at the top or a small hotel or guesthouse at the bottom of the scale, who did this type of marketing or selling during the off season last year has had his premises full, even during the month of June. Every premises which was sold and marketed during the off season last winter was full.

They are entitled to full assistance from the Bord Fáilte organisation at home and abroad if they undertake a trip abroad.

I want to examine this whole aspect to ensure that more of this is encouraged. One must look at this industry as a business. It is not just the hotel business alone. Tours, car hire and a comprehensive package of facilities including entertainment are involved. This must be considered in a comprehensive way. No one section of the industry has a monopoly of interest in it. We have been very successful in developing this industry and tremendous credit is due to Bord Fáilte on that score. We must watch closely now in a more competitive age to ensure that we apply commercial criteria to its operation. That is one reason why I propose to introduce this amendment to the Bill, to ensure that to a greater extent we have the widest possible range of experience and expertise, so that next season can be planned in a completely commercial manner.

I deprecate many of the remarks made by Deputy O'Donnell and others regarding Bord Fáilte. It is easy to criticise an organisation of this kind when things go wrong and problems develop, particularly when I think it can be fairly said that the problems encountered this season—I think the eventual assessment will reveal that these problems were confined to one month—relate to factors entirely outside the control of Bord Fáilte.

They did nothing to counteract them.

There was no point in starting a counter promotion campaign in May or June, or even earlier, having regard to the particular disturbance that unfortunately affected part of this country. No amount of promotion could counteract that sort of situation. These are facts of life.

I do not agree with the Minister.

Let us not argue now: we have had a very sensible discussion. At this stage we can coolly assess the situation and plan for next year. Let us forget about immediate measures such as I think were suggested during this debate.

Bord Fáilte's record has been praised on all sides of the House. Even last December, in the debate on the Supplementary Estimate in respect of hotel and holiday accommodation, everybody who contributed was full of praise for Bord Fáilte and the board have been receiving accolades from Members on all sides of the House, including Deputy O'Donnell——

I know a good deal more now than I did then.

——for a good many years and from all sectors of the population.

They managed their money affairs very well.

We must have a thoroughly commercial approach to this matter. You do not proceed to run down an organisation that have been rightly given credit and have, in fact, done a very good job, when temporary difficulties arise due to problems outside their control. Instead, by adopting a commercial approach, you analyse the situation coolly and realise that there is a problem, that, perhaps, you can do something about it and examine it thoroughly. This is what I have asked Bord Fáilte and the Irish Hotels Federation to do and to report to me before the middle of September. In the interim, I am appointing two extra directors to the board and we are taking a hard look at the whole structure of the board with a view to recasting it, if necessary, as has been suggested. This is a sensible approach towards remedying a situation involving something that is far too important to be made a political football here.

When you examine the record of Bord Fáilte—it is only fair to put the fact on record—as has been said on all sides of the House when things were good and the graph was going up continuously, that the board's record is good. The facts are there. The total income ten years ago was £44 million. The total income from tourism this year will be over £100 million.

Is there any way of measuring the exact contribution of Bord Fáilte to this? What about private enterprise?

I am very surprised at the Deputy. I am coming to that. The total tourist income last year was £98 million and it will be over £100 million this year, despite the gloomy prognostications of Deputies.

Bord Fáilte are not solely responsible for that. What about the private enterprise that went into it without any assistance from Bord Fáilte?

Will the Deputy give me time to speak? Seven years ago the limit in regard to grants for holiday accommodation set by this House for Bord Fáilte was £1.5 million. In this legislation we propose to increase that for the 1970s to £11 million. We have exceeded the £5.5 million which had been allocated up to this. In seven years the expansion of holiday accommodation has been such as to require the sort of assistance represented by the jump from £1½ million to £11 million.

As Deputy O'Donnell rightly pointed out there is substantial private investment involved in this expansion but the grants given by Bord Fáilte, as a result of legislation in this House, had the effect of priming the pump. They ensured the attraction of private investment into the holiday accommodation industry. Of the £5½ million that I mentioned as heretofore authorised, £5 million has actually been spent and there is more than another £½ million committed. That £5 million has generated £31 million worth of private investment, so that 14 per cent of the total investment of £36 million in holiday accommodation over the past 10 years has come from the Exchequer and the balance of 86 per cent from private sources, with some of it helped by State guarantees in the case of loans to be met commercially in the ordinary way. The fact that a 14 per cent priming grant by Bord Fáilte has resulted in an 86 per cent investment from the private sector in holiday accommodation is an achievement.

It is important also to remember that Bord Fáilte have been directly involved in the development of tourist income as can be seen from the fact that the £500,000 in 1960 for the operations of Bord Fáilte has grown to £5.55 million in the current year. This is for the operation of Bord Fáilte, including from the capital grants given by them. All this has resulted in more than a two-fold increase in tourist income from £44 million to over £100 million in that decade.

In practical terms of bedrooms—the most practical criterion one can adopt —in 1960 hotel bedrooms numbered 15,465. In 1970 the figure stands at 23,300. In 1960—and this is more spectacular—hotel and guesthouse bedrooms numbered 17,800; in 1970 the number stands at 27,900.

The Minister does not suggest that these have been built? These are private houses converted.

In regard to supplementary accommodation, of which there was none in 1960—no farmhouse accommodation, no guesthouse accommodation, none listed——

I would swallow anything but I shall not swallow that. There was no official record of it but it was there.

It was very limited.

All right.

We now have 9,700 bedrooms listed under farmhouse accommodation and under general supplementary accommodation in towns, villages and cities. There is a rising situation in regard to bedroom accommodation and these figures have been made possible by reason of Bord Fáilte financial assistance and advice. This is the reason why we are showing confidence in the future of the industry by proposing in this measure to do three main things, apart from the matter I spoke about initially concerning the additional board membership. We propose to double the financial provision which will be available in respect of holiday accommodation grants from £5.5 million to £11 million. We propose to increase the guaranteed limit from £5 million to £8 million, and to introduce a further tier of holiday accommodation in the form of organising the holiday cottage idea with proper standards, registration, and so on.

The question was raised in relation to the holiday cottages that the number of units I mentioned in my introductory speech, ten, was too high. I want to assure the House that this is a matter for regulation by me and I shall certainly bear in mind what was said so constructively in the House. I shall lower the figure to meet the wishes expressed here. I would be inclined towards five units as being possibly a more reasonable approach.

We shall not haggle across the floor of the House. The views that have been expressed here will be taken into account by me.

The question of loans was raised by Deputy Dr. O'Donovan. There is an insistence always on promoters providing a contribution of £1 for every £1 of loan sought to be guaranteed. It is only a guaranteed loan, so the repayment must be effected by the private interests concerned.

The person puts up 25 per cent of the cost; he gets 50 per cent by way of grant and 25 per cent by way of guaranteed loan?

Yes, that is roughly the way it works. The question of regional organisation was raised by Deputy O'Donnell and Deputy Tully was critical of duplication by the regional organisations in regard to marketing. There may be duplication here in regard to regional organisation marketing activities and central organisation marketing activities.

This applies to development as well.

Yes, there may be some validity in that. It is a matter that will have to be examined, having regard to the limitations of our resources, the smalless of our country, the fact that we have a number of regional organisations and the head organisation. There is a member of the staff of Bord Fáilte on each of these regional organisations to ensure continuity and unity of policy, but this is a matter that I shall have examined.

Another matter, about which I want to be categorical and which has been pressed in this House, is that grants from Bord Fáilte over a certain level should be made known to the public through their annual report, as is done by An Foras Tionscal in their annual report in regard to industrial grants. This is a matter in regard to which I am in active consultation with Bord Fáilte. Quite a number of these grants, despite the impression people have, are quite small and relate to small family concerns. Whether it is fair or not to reveal them is another day's work, but certainly I believe grants over a certain level should be made known in the annual report of Bord Fáilte.

As is done in the Foras Tionscal annual report.

That is what I said.

An Foras Tionscal publish even their small grants under the small industries division, and these are given to family businesses too.

Yes. It is a matter about which I am in very close consultation with Bord Fáilte. I do not like making promises but the next report that will be issued by Bord Fáilte will include these figures.

I do not think anyone minds these small grants. It is the large ones people are interested in.

We shall publish them. Let me say in fairness to the large promoters who have done a great deal of work, going out and marketing tourism, bringing in business to fill their hotels, that the percentage of the total capital cost represented by the grant should be taken into account. That is what matters rather than the amount of the grant, because the percentage in regard to the larger operations is usually smaller than the percentage in regard to the small operations.

In this business the emphasis must be on the initiative of private people in so far as private people can be encouraged to enter the industry. That is what Bord Fáilte is about. The tourist business is a complex business. The demands vary from year to year to such an extent that it is very easy to generalise and be wrong. There are some areas where Grade A hotels are required. There are other areas where that is not the right type of hotel, where farmhouse or guesthouse or moderate hotel type accommodation is required. There are half a dozen different options in regard to bedroom accommodation and it varies from region to region and from situation to situation.

This is a matter into which Bord Fáilte are conducting a very detailed study—the whole accommodation requirements of the future. Commitments have outrun the resources and that has caused a delay at the present time in paying grants. Some people here would say this is a desirable thing; let us contain the existing stock of bedrooms and work from there. I would not like to be too rigid about that, because one must look to future expansion. If a halt is called at this stage it can have reverberations in two or three years time when the expansion is required. It is one of those complex businesses where results often follow some years after the actual holiday accommodation development.

In regard to commitments, I shall go into the attack on behalf of Bord Fáilte. These commitments into which they entered are a reflection of the confidence held by people in the future of the tourist industry, people who built their hotels, their guesthouses and supplementary hotel accommodation, local bodies who encouraged resort development and so on. All of this confidence has been generated by Bord Fáilte over the last ten years. If the generation of that confidence and interest in tourism has resulted in Bord Fáilte overreaching themselves it is a very good complaint. It is a complaint which you associate with progress. It is a plus rather than a minus. We would be far more critical in this House if we allocated £x to Bord Fáilte and found this money underspent. If it is a complaint, it is a complaint associated with progress and a problem associated with progress in every field of human and economic activity. If you are going ahead and expanding and if there is confidence and progress, then inevitably both in private and in public enterprise there is a tendency to overreach the situation. That is what happened. Far more than Bord Fáilte ever expected, the private sector—local authorities, local bodies and private people and firms—responded to the incentives and encouragement generated by the board.

That is a tribute to them and a tribute to the figures I mentioned earlier on, of more than doubling the expansion in this field over the past ten years. Now—and to this extent I agree with the thread of view expressed by the various contributors—is the time for taking a hard look at the situation, the assessing of it, reorientating our tourist direction for the 1970s and possibly recasting the board. What has happened in the last ten years is that the tourist business has become far more competitive than in 1960 when the Bord Fáilte grant effort got under way. The tourist business in 1970 is far more commercially orientated than it was in 1960. For the next ten years we will have to be far more commercially minded in our tourist effort.

Could the Minister tell me how the figures relate to inflation?

Having regard to the depreciation of money between 1960 and 1970, there still has been a jump from £44 million to £100 million. This is more than double the income. The inflation in that period has not been anything like that. I have not got exact figures but certainly the depreciation in money value figures would be less than half and that is a 100 per cent increase and outside, I suppose, there would be a depreciation of about 30 per cent in the value of money but here you have a 100 per cent increase which is substantial. That 30 per cent cannot be taken as a hard and fast figure, but I would say that is what it is at the outside. I hope I have dealt with the various points made, but if there are any points which I have overlooked I will communicate with the Deputies who raised them.

Would the Minister say something on the question of the public accountability by Bord Fáilte in regard to spending the tremendous amount provided for them?

The Deputy did raise this point in his contribution but it is not strictly related to the tourist business and it escaped my notice. This matter has been dealt with very thoroughly in the Devlin Report and a distinction is drawn between the commercial bodies and non-commercial bodies. The whole structure of the State commercial bodies, such as the airlines, given by statute to them is admirable. However, I think in the case of the non-commercial bodies—and this is the view of the Devlin Report—where there is no commercial barometer, in the sense that it does exist in the case of the airlines, CIE, and the B & I, there is a strong case for a greater degree of public accountability and closer liaison with the Department concerned with the non-commercial State bodies. I feel very strongly about this and we are having it examined at the moment in the light of the Devlin Report. There is nothing more to add and again I thank the House for the reception of the Bill.

Question put and agreed to.

Does the Minister not have to move a special resolution before the Committee Stage?