Vol. 435 No. 2
10 Mr. Deenihan asked the Minister for Tourism and Trade if grant aid will be available to all hotels irrespective of size, from the next operational programme for tourism 1994-99, for the provision of recreational facilities including swimming pools, tennis courts and other such amenities; and if he will make a statement on the matter.
The National Development Plan 1994-1999, confirms that the Government will continue to assist leisure-related tourism investment. No specific decisions have yet been taken, however, on the extent to which such investment will be eligible for assistance, but it will remain policy that only those premises which are active in contributing to securing increases in foreign visitors will be assisted.
Would the Minister agree that smaller hotels, hotels with fewer than 35 rooms, which were debarred from funding under the last programme, cannot expand unless they are grant-aided? Will the Minister ensure that hotels of all sizes are included for funding under the next programme? Would the Minister not agree that the family run hotel must be protected? The families who run these hotels are under increased pressure to survive and it is vitally important that, irrespective of their size, they receive funding under this scheme in order to expand and to attract foreign tourists.
As stated in my reply, no specific decisions have been made yet regarding the eligibility criteria for the next operational programme. Given the best will in the world it would not be possible to allow every hotel to qualify for EC assistance to provide leisure facilities. If that was done the money would be spent over-night and the economic benefit would not be commensurate with the level of spending. Under the last operational programme only hotels with a minimum of 35 bedrooms were eligible for assistance for leisure facilities. Under that programme 40 projects nationwide benefited from an investment of more than £61 million, including £6.6 million from EC funds. The new operational programme will be published in the next month or so. I have had meetings with the various interested parties in the industry who recommended levels of aid and the criteria that should apply under that programme. To provide assistance for leisure facilities to every hotel would not be economically justified.
Would the Minister agree that the hotels with the type of facilities listed in the question, such as swimming pools, tennis courts and various indoor amenities are by and large hotels which charge premium prices? There is a danger in concentrating resources in that area in that we would perpetuate an image of a country in which the tourism season is restricted to the fine weather period and for the rest of the year we cater only for those who can afford premium prices. Under the new operational programme for tourism will the Minister consider making available grant-aid to hotels which do not have the capacity to finance swimming pools and other indoor recreational amenities but who otherwise can offer budget accommodation for family type holidays? Many international tourists who may wish to holiday here and escape from the sun could avail of these facilities. Under the new operational programme investment should be concentrated on those hotels and guesthouses which offer that type of service.
The question put down by Deputy Deenihan relates to EC aid for leisure facilities whereas the matter referred to by Deputy Creed relates to a later question and I will deal with the matter when we come to that question. I am considering some flexibility under the new operational programme to meet the points raised by the Deputy. Those points were brought home to me very forcibly when I visited Deputy Creed's constituency some months ago. One of the most progressive towns in Ireland situated in the Deputy's constituency does not have one hotel.
We are working on that.
I am willing to consider some means of assistance for hotels such as those which the Deputy has in mind. As regards the question raised by Deputy Deenihan and Deputy Creed as to where tourists are going, people are trading downwards. That is the case not only in the Irish tourism market but also internationally. From a macro-economic viewpoint, more jobs are created in big operations than in smaller operations. It is the customer who is driving the market because the customer is trading downwards. Despite the best hopes of agencies such as Bord Fáilte that we attract high spending tourists who stay in big hotels, that is not happening.
As we are dealing with the operational programme for tourism will the Minister indicate whether he is considering grant-aid for the provision of extra self-catering units of which there is a great shortage in many parts of the country?
That type of accommodation is being considered but we must take cognisance of the total amount of money available under the national plan. I am considering the introduction of some scheme to meet the problems referred to by the Deputy. A later question refers to this matter and I will deal with it in greater detail when we come to that question. Since the State discontinued grant assisting accommodation the amount of bedroom accommodation has increased dramatically. This is an interesting economic feature which will perhaps gladden the heart of people such as Deputy McDowell.
Does the Minister think we got good value from the £6.6 million that was invested in leisure facilities under the last operational programme? Is he aware that in many cases the ventures that were grant-aided for leisure type facilities involved multinationals who already had the resources to extend their premises? There is a feeling of frustration among family-run hotels in that they receive no assistance whatsoever.
I am aware of the feeling of frustration among the owners of small family run hotels to which the Deputy has referred. However, all the studies carried out by economists in this regard which are available to my Department point out that the way to create more jobs in the tourism industry is to attract more high spending tourists to Ireland. That has been the traditional way of looking at such matters. As I said, customers are now trading downwards, so to speak, and perhaps it is time we looked at some of the points made by the Deputy.
I made the interesting point that the number of bedrooms available in the Irish market has increased enormously since we ceased giving grant aid. I am looking at this matter in the context of the operational programme. It is difficult to formulate a scheme for which the demand will not be so great that we neutralise all the available EC funds in one go and not create the proposed number of jobs. It should be remembered that the programme sets a target for the creation of 35,000 jobs over the period of the programme. I have to try to allocate the funds in such a way that the proposed number of jobs is created. I am aware of the points made by the Deputy about small family run hotels. This point has been made to me at various meetings throughout the country by people involved in the tourist industry. However, I have to balance one demand against the other.
Would the Minister agree that the policy he has put forward here today regarding funding for hotels merely serves to exaggerate the difference between larger and smaller hotels and makes smaller hotels less competitive, resulting in a loss of business and possible closure? The last programme stated that only hotels with more than 45 rooms would be grant aided. This was later changed to cover hotels with more than 35 rooms. Can the Minister say if he will be flexible and provide this grant aid to hotels with more than 20 rooms.
Finally, I wish to raise a very important question which I should have asked already. Will the overall budget available for the Minister's Department be affected by the decrease in the level of funding announced last week? This is very important from the point of view of marketing and the implementation of the operation programme.
The answer to the Deputy's last question is no, the level of funding for my Department will not be affected. The Deputy asked if I was prepared to consider a relaxation of the 35 bedroom rule. I have not yet drawn up the operational programme and, while I am willing to be flexible on this issue, I cannot say at this stage to what extent I will be prepared to change the rule.
The Deputy referred to a loss of business by small family run hotels. My job as Minister for Tourism and Trade is to bring foreign income into the country and create lasting jobs. It would appear that bigger operations create more long-term sustainable jobs. I have to keep that objective in mind while at the same time encouraging more people to get involved in business and ensuring that small family run operations remain viable. This is where the difficulty arises in terms of dividing in a reasonable fashion the funding available to me. As Minister with responsibility for tourism, my main objective is to create 35,000 jobs over the lifetime of the programme and that will be the main criterion for any measure introduced by me.
