asked the Minister for Tourism and Transport the steps he proposes to take this year to maintain the tourist industry's competitiveness in relation to other destinations; and if he will make a statement on the matter.
Written Answers. - Tourist Industry's Competitiveness.
24.
The competitiveness of Irish tourism is dependent primarily on the price, quality and range of our tourist facilities and on our effectiveness in marketing and selling Ireland as a holiday destination. Action taken by the Government, since coming into Office, has been successful in bringing about improvements in all these areas.
This Government's success in reducing domestic inflation to its lowest level for many years has greatly enhanced the competitiveness of our tourist industry. Moreover, initiatives taken on access transport have resulted in a more extensive network of services to Ireland, and at lower fares. As a result of increased competition in the insurance sector and in anticipation of benefits accruing from the Courts Act, 1988, insurance premia, which are a significant cost item for the industry, have already begun to come down. The scope of the VAT (Refund of Tax) Order, 1986 was extended recently to enable a greater number of imported tour coaches, both new and up to two years old, to benefit from the effective 10 per cent rate of VAT.
Improvements such as these in the cost structure of the industry have been supplemented by special promotions such as the Government backed $50 discount off car rental rates for North American visitors this autumn and the "Punt Saver Scheme" which offered tourists discounts on a range of facilities to the value of £115 for the 1988 tourist season.
The Government has actively sought to encourage improvements in the quality and range of the tourism product. Falling interest rates, and significant improvements in tourism performance in the past two years, have helped to create a very positive climate for re-investment by tourism operators. The extension of the business expansion scheme to tourism, details of which I announced last December, has also proved to be a significant incentive for new investment in the industry. Allocations for tourism-related expenditure have been included in the ERDF — Special Border Areas Programme Phase II — and in the assistance schemes operated by the International Fund for Ireland. All this has resulted in a much accelerated rate of investment and development in Irish tourism, working towards bringing the range and quality of the tourism product to a standard at least as high, if not higher, than that available in competitor destinations.
Bord Fáilte has adopted a more targeted approach to marketing, identifying specific markets and market segments for promotion, and has increased marketing in the main target markets, in close association with the industry. As the House will be aware, the Government, in this year's budget, allocated an additional £4 million for a special marketing programme for 1988. This programme was supplemented by £2.5 million expenditure by the tourist industry. In October, the Government allocated a further additional £5 million for marketing purposes to further boost tourist traffic next year on condition that it would be matched by the industry. I am happy to report that the resultant £10 million marketing programme is now underway. Investment by the industry itself in marketing is essential in the very competitive international market. The Government is convinced that improved price competitiveness, the new more effective marketing approach by Bord Fáilte, coupled with increased industry support for, and involvement in the marketing and development effort, will ensure that Ireland secures its share of the growing world tourism market.