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Dáil Éireann debate -
Wednesday, 4 Jul 1979

Vol. 315 No. 11

Tourist Traffic Bill 1979: Second Stage.

, Dublin South-Central): I move: “That the Bill be now read a Second Time.”

The provisions of the Bill raise the statutory limit on capital expenditure by Bord Fáilte on projects of both an accommodation and non-accommodation nature. Thus the Bill proposes to raise the limit on accommodation expenditure from £16 million to £25 million and on non-accommodation expenditure from £4.75 million to £10 million. The increase for accommodation I am proposing in the Bill represents a very considerable stepping up of the scope for expenditure as against previous similar measures.

I am pleased to announce to the House in this context that I propose to introduce a new cash incentive scheme for new hotel bedrooms and an extension to the country at large of the existing supplementary holiday accommodation scheme which up to now has been confined to the special development area which embraces, roughly, the 13 westernmost counties from Donegal to Kerry.

Tourism to Ireland has staged a strong recovery and we have had an increase of nearly 480,000 visitors, equivalent to 27 per cent, in the 1977 to 1978 period. All successful tourist destinations are founded on a satisfactory range of access transport facilities and an adequate supply of accommodation. The Government's Green Paper of last year recognised that an accommodation shortfall could act as a constraint on growth. One of the options in the Green Paper was to anticipate such a shortfall by bringing forward plans for future investment and concentrating on securing accelerated development for the 1980 season and immediately thereafter. We are now, in effect, taking up that option. Despite the problems which tourism has faced this year I have every confidence in the future of tourism and in its ability to overcome the present temporary adversity, and to continue to expand and develop. The decision to reintroduce accommodation grants expresses that vote of confidence in practical terms.

The provision of extra hotel space—from drawing board to fully developed accommodation—takes well over a year to achieve and we need to plan now to meet our minimum requirements for the next few years. In 1977 and 1978 certain areas were already beginning to experience pressure on accommodation at certain times.

Tourist projections prepared by Bord Fáilte showed that tourist numbers would continue to rise to 2.7 million by 1981. A very important feature of the growth is that the ethnic content has more or less stabilised so that a considerable bulk of the projected growth represents non-ethnic visitors who will give rise to demand for commercial accommodation. In planning the type of incentive scheme which would produce the best results, I have had regard to past experience, the financial state of the industry and the level of incentive which would provide the proper level of stimulus. I have accordingly designed a programme which aims to secure optimum increases in the accommodation stock at national and local levels. The main features of the new scheme are as follows:—

(a) it is framed on a selective basis so that it will represent a correct response to our needs;

(b) it is related solely to the cost of providing additional bedrooms;

(c) there will be different levels of grant related roughly to estimated need with grants from 25 per cent to 35 per cent of room cost subject to fixed cash maxima;

(d) priority will be given to the extension of existing hotels over the construction of new hotels, and new hotel construction in Dublin, Cork, Limerick, Galway, Shannon, Killarney and other major conurbations with a substantial tourism/business base will not qualify for grants.

I have instructed Bord Fáilte to prepare a detailed scheme embodying these principles so that on passage of the measure now before the House they will be able to consider applications and undertake the financial commitments for which the Bill provides.

The other major change which I am introducing is the extension of the supplementary holiday accommodation scheme which was established in 1967 and which at present applies only to the non-urban areas within the special development area. The scheme, as its title implies, was designed to encourage the provision of tourism capacity of a supplementary nature through the addition of bedrooms to existing private houses. Over the past number of years farmhouse accommodation has developed into a very distinctive tourist product in its own right. The high rates of occupancy enjoyed suggest that there is considerable scope for development of this product. I have, therefore, authorised the countrywide extension of the scheme, a doubling of the size of the fund and a raising of grant levels from £700 to £1,000 per house in a single year subject to a maximum of £3,000 overall. The scheme will also be used to upgrade many existing approved farmhouses, town and countryhouses in all areas of the country through the provision of extra facilities such as hot water, hand-basins in bedrooms and so on. These improvement works will enable small rural areas to be promoted more vigorously and through a longer season, especially in those areas where it will be possible to build on activities such as fishing and shooting. The preference of the special development area will be retained by provisions designed for topping up grants to premises located there.

The new arrangements for hotels and supplementary accommodation will be introduced strictly in accordance with the main features I have outlined and will operate on that basis for some time. I will, however, see to it that all details of the scheme will be carefully monitored to ensure that we get the optimum response. Bord Fáilte will, of course, continue their existing programme of ongoing capital accommodation expenditure on such items as camping/ caravan sites, An Oige type developments and their accommodation improvements scheme, except that in the last case and in tune with the drive to concentrate on providing extra accommodation, the scheme, as is now generally known, is now being focussed on improvement and upgrading of bedrooms.

Some years ago a new fund was established with a limit of £4.75 million for development works of a capital nature other than accommodation which in the opinion of Bord Fáilte would promote the development of tourist traffic. The board's plan set out proposals for capital spending, which included joint development with bodies such as the Office of Public Works and the forestry and wildlife service, on conservation, recreational and educational projects as well as expenditure to encourage the improvement of facilities by those directly involved with sailing and water sports, horse riding, horsedrawn caravans, sea angling, swimming pools, recreational projects and similar activities and facilities. Works have been undertaken in close co-operation with the regional tourism organisations, local authorities and other interested parties. These activities form part of the ongoing process of meeting the present and future needs of tourists by providing amenities and services of the right quality and quantity in the most appropriate locations.

I do not think the country can rely solely on its scenery and particular attraction as a nation to sustain its tourism drive. Future tourism growth will depend on continuing to attract an increasingly sophisticated ethnic tourist and the non-ethnic visitor who expects a range of facilities which would be normal elsewhere. All of the visitor products created by Bord Fáilte spending contribute to the stock of facilities available for visitors and residents alike and are a positive aid in generating new business and attracting repeat business. Many are not directly revenue producing, while others have a highly commercial content but, because of seasonality and other risk factors, the long developmental period and high capital cost involved, would have developed more slowly without the incentives Bord Fáilte are enabled to give.

The proposed increase in the present statutory limit from £4.75 million to £10 million guarantees the contribution by Bord Fáilte to the process of providing facilities of the right quality and quantity in the right place for holidaymakers. Bord Fáilte, the regional tourism organisations, the local authorities and other State agencies such as the OPW and forestry and wildlife service are all doing an excellent job of work in this area.

Tourism is a major earner of foreign currency, it contributes largely to our balance of payments, the import content is lower than for other sectors and, since it is a labour intensive industry, the job creation potential is greater. Most important of all, its benefits are widely dispersed throughout the country so that it is an excellent aid to regional development. The Government decisions which I have just announced denote a strong vote of confidence in the future of the tourist industry as well as a clear acknowledgement of the part tourism plays in the economy of the country. As a further statement of the Government's confidence I am introducing another Bill this week to provide money to enable B & I to finance an additional passenger car ferry for delivery for the 1981 season to augment capacity on the cross-channel routes.

The extra funds which we have been making available for tourism promotion over the past two years have been paying dividends and have enabled Bord Fáilte to campaign more vigorously in existing markets and also to begin to explore new market areas. By the end of last year we had again built up to the levels of our previous highest tourism year, 1969, and were set out to share in continued tourism growth. Tourism in Ireland has, however, experienced special difficulties this year—indeed some of the problems are world-wide. The effects of the postal dispute were seriously compounded by the oil shortfall which existed for a period, but it is difficult to get a sound assessment of the overall position. The results of the air and sea carriers vary between themselves and the different markets, but the picture that emerges is that, while carryings were up earlier in the year, bookings (or in the absence of bookings, expectations of carryings) were down on the target for 1979. The carriers, particularly the sea carriers, were planning for substantial increases of the order of 20-30 per cent in capacity offered, so that when one reads of curtailment of sailing schedules and so forth, it certainly represents a failure to realise our earlier expectations, but, nevertheless, leaves us with the same level of services to Ireland as we had in our record-breaking year of 1978. Bord Fáilte projections for the year are being reviewed. The exercise is a difficult one, particularly since the bulk of the season is yet to come and conditions are now improving. The Board's present hope is that we may at best equal the 1978 performance, which was an all-time record. My personal belief is that after a pause this year we will be ready to move forward again at or near growth rates previously forecast.

We have, of course, tackled vigorously the petroleum oil problem in the tourist interest. The first pressures on tourism were on the use of diesel oil used for coaches and cooking/heating in hotels. Very early on the Government declared tourism one of the priority areas and the difficulties with diesel largely faded for tourism. Following the onset of the petrol difficulties Board Fáilte and my Department were very active in seeking to ensure that the quota of fuel used by tourists, on which part of our 1979 allocations are being based, would in fact be available for tourists. The result was the voucher scheme, to ensure minimum supplies for visitors, which I believe to be unique. The scheme is an assurance for visitors that their needs will be catered for in Ireland. The scheme must be seen in perspective. Tourism is an essential industry on which over 100,000 jobs depend, not to mention the other very tangible benefits. It is also a service industry dealing in a very perishable commodity which cannot be stored or left on a shelf until the customer is ready to collect it. The motoring holiday has grown so enormously in popularity and is such an important means of spreading the benefits of tourism around the country that the Government were happy to make this positive response to the needs of the industry. I have also arranged with Bord Fáilte to implement a scheme to assure Northern Ireland motoring tourists a minimum supply of petrol while they are on holiday here. Details of these arrangements are being worked out at present and will be announced as quickly as possible. I think all will agree that the steps we have taken on the petrol front to protect the tourist industry have been a great reassurance to tourists and were both necessary and worthwhile.

The general fuel position continues to stabilise and if everybody uses energy sensibly and sparingly there will be sufficient for all sectors of industry including, of course, the very important home holiday market. As Deputies are aware, a major energy conservation campaign has been launched throughout the country, and I am pleased to mention that Bord Fáilte and the tourist industry are complementing this through the establishment of an energy conservation committee within the tourist industry.

All in all, therefore, the position is that overall Bord Fáilte hope that it may yet be possible to approach or match the all-time record achieved last year. Despite the temporary setbacks which we are experiencing this year and which I hope will resolve themselves fairly quickly, the underlying trend in tourism is inexorably upwards and the mood is one of confidence in the long-term growth prospects. I hope the industry will recognise the emphatic declaration of the Government's confidence represented by this measure which involves making available an incentive scheme for new rooms for the first time in ten years. The scheme will not do the job by itself. We have to plan and work for growth and above all ensure that we have the necessary basic infrastructural requirements.

This is what we are aiming to do with this Bill, which I now commend to the House.

I welcome this Bill. Some of the provisions are very much in line with my own thinking, particularly the section dealing with the extension of grants to all aspects of the hotel business. The inhibiting factor of the existing system was that it limited grants to the improvement of bedrooms, and this was regarded by hoteliers as something that could not be tolerated.

The Minister of State, unlike the Minister for Economic Planning and Development, accepts that the tourist industry has problems this year. His colleague was reported in the newspapers as saying that in the first five months of this year there were more visitors than in the same period last year. That kind of statement is infuriating hoteliers who have empty bedrooms. Those to whom I have spoken say that this has been a disastrous year so far. In my own area there are some country home type hotels with extensive grounds and very expensive amenities. In one case the owner told me that it will take five years to recover losses. We must tackle the immediate problem of the disaster which has been caused by the fuel shortages and the telephone and postal problems.

Our spending priorities are wrong with regard to tourism. We are only scratching the surface of this wonderful source of revenue. Millions are being spent on oil and gas exploration off Kinsale and off the west coast. This is very necessary and we all hope that the search will be successful. Expenditure of £650 million is proposed to build motorways in Dublin and we talk in terms of £400 million for a rapid transport system. The Minister for Posts Telegraphs has announced that £650 million will be spent to improve our communications system. It is only in the context of these figures that we realise how far this Bill is from reality. The amount involved is peanuts and represents only one-tenth of 1 per cent of the amount which will be spent on these other projects. There is no comparison between the revenue which would accrue from motorways in Dublin and that which would accrue from tourism. Tourism needs an expenditure of hundreds of millions if we are to do a proper job.

Because of the oil shortage there will be a need to develop facilities in tourist centres which will reduce the need of the tourist to travel. Unless we can provide amenities to compensate for lack of mobility the tourist will seek a market elsewhere. Bearing in mind the substantial income potential of tourism, the time is right to take action. We have had a serious setback but there is no reason to lose heart. We must restore the confidence of people in the business. It should be possible to increase substantially tourist numbers from all markets, especially from the UK. We must woo every tourist. Tourism is highly commercialised and Bord Fáilte with small resources are doing their best. State agencies, local authorities and those who participate in the national effort to keep our towns, our countryside, rivers and estuaries clean and free from pollution are playing their part.

Debate adjourned.
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