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Dáil Éireann debate -
Thursday, 8 Apr 1993

Vol. 429 No. 5

Ceisteanna-Questions. Oral Answers. - Tourist Industry.

Jimmy Deenihan

Question:

1 Mr. Deenihan asked the Minister for Tourism and Trade if his Department has assessed the adverse effects of the recent currency fluctuations and high interest rates on the competitive position of Irish tourism; and the reason tourism was not included in the Government's scheme to assist export companies.

Pat Rabbitte

Question:

8 Mr. Rabbitte asked the Minister for Tourism and Trade the latest information available to his Department on the prospects for tourist business this summer, especially in view of the rise in the value of the Irish pound vis-à-vis sterling since summer 1992; if any special assistance will be provided to assist the industry cope with the difficulties arising from currency fluctuations; and if he will make a statement on the matter.

Jim O'Keeffe

Question:

14 Mr. J. O'Keeffe asked the Minister for Tourism and Trade if he expects any upturn in the tourist industry in 1993.

Jim O'Keeffe

Question:

48 Mr. J. O'Keeffe asked the Minister for Tourism and Trade the prospects for the tourist industry in the summer of 1993 on the latest information available to his Department; and if he will make a statement on the matter.

Jim O'Keeffe

Question:

49 Mr. J. O'Keeffe asked the Minister for Tourism and Trade whether any assessment has been carried out of the losses sustained by the Irish tourist industry during the devaluation crisis; and whether he has any proposals to make good those losses, in whole or in part.

I propose to take Questions Nos. 1, 8, 14, 48 and 49 together.

Fortunately last autumn's turbulence in international money markets had a relatively minor impact on tourism performance, coming as it did at the end of the 1992 peak season. The fact that the major source of tourism growth in recent years has been in mainland Europe, outside the sterling area, also helped to minimise the impact. Consequently, tourism was not designated as one of the short term priorities for assistance from the Market Development Fund launched in October 1992 and terminated last month.

The realignment of the punt within the EMS in January, coupled with stabilisation of interest rates since and well in advance of the 1993 tourist season, has helped significantly to restore the competitiveness of Irish tourism, particularly in important markets such as the UK and the US, vis-à-vis the position last winter.

The industry will also benefit from a number of EC funded initiatives scheduled for this year, including a £2 million special Bord Fáilte run marketing programme to increase business in shoulder and off peak periods; and a £10 million marketing package led by the industry targeted mainly at new markets and market segments. Bord Fáilte are currently forecasting a 5 per cent increase in overseas visitors to 3.3 million for 1993 and a 7 per cent increase in overseas revenue.

Will the Minister agree that we have lost out to the Americans to the tune of about 15 per cent in our competitiveness on the Italian, Spanish and British markets, which were identified as growth areas for tourism? Will he agree that there is a greater incentive for American tourists to visit England and Scotland than Ireland? Will he agree also, in regard to the Italian and Spanish markets, that we need a more intensive advertising campaign to offset the adverse effects of the recent currency fluctuations?

We are in a stronger competitive position than most European markets because of the devaluation of the punt and other currencies beforehand. The Deputy is correct in saying that the trend would be in the other direction in regard to the Italian market but we are in a stronger position now than prior to devaluation in regard to all other European currencies.

We are in a particularly strong position in regard to the US market vis-à-vis last year, if exchange rates are the only factor taken into account. In the mid-August 1992 period the value of the dollar to the Irish pound was approximately DLDL1.83 whereas at present it is approximately DLDL1.50 to DLDL1.51. We are at a considerable advantage in that respect. Most of the growth in the tourism sector has come from mainland Europe in the past number of years and we enjoy a competitive position as a result of devaluation. Bord Fáilte have alerted overseas travel agents to the benefits of the increased spending power due to the currency situation and we are confident that the number of tourists from Europe this year will increase on last year, the exchange rate being a significant factor in that regard.

Will the Minister agree that, on the one hand, we have gained competitiveness in regard to the American market, but on the other, the English market is now more attractive to American visitors because the American dollar is considerably stronger in relation to sterling than the Irish pound?

I gave the position of the Irish pound as against the US dollar in mid-August last year. There has been a significant increase in the spending power of Americans here and that should increase the influx of such tourists. The Deputy may be referring to the effects on UK tourists coming to Ireland vis-à-vis the exchange rate between Ireland and England. We do not foresee any great difficulties in that regard but, from a tourist point of view, it would be better if the exchange rate had remained at the level it was at last year. However, present indications are that there will be a considerable increase in numbers of American tourists this year.

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