I move: "That the Bill be now read a Second Time."
As indicated in the explanatory memorandum which I have circulated, the purpose of the Tourist Traffic Bill, 1995 is to enable Bord Fáilte Éireann to delegate to a contractor certain of its tourist accommodation inspection and associated functions and powers under the Tourist Traffic Acts, 1939 to 1987 and the Intoxicating Liquor Act, 1988. The functions and powers in question relate to the registration and grading of a range of tourist accommodation and the licensing of restaurants.
I believe it would be useful to outline briefly the background to this Bill. In the context of reviewing the effectiveness of existing arrangements to promote Ireland as a tourist destination, Arthur D. Little Limited of London were commissioned as consultants by my predecessor in 1994 to carry out a fundamental review of Bord Fáilte. The conclusions and recommendations contained in their final report — copies of which have been provided to the Library — were accepted by the Government in November 1994. When I took up office at the Department of Tourism and Trade in December last, I reviewed the position and decided to press ahead with the implementation of the findings in the review.
It is important to recall that the consultants recognised that Bord Fáilte had done a good job for Irish tourism over the years. However, times change and there was a need for change in the Board as well. Because of its unstructured and organic growth over the years Bord Fáilte Éireann had developed into a multifunctional body and was undertaking more activities than was desirable. In addition to marketing and promotion, it had become involved in the registration and regulation of a very wide range of tourist accommodation and services. It was deciding on EU grant applications, publishing a wide range of brochures, running the Tidy Towns competition and so on. Although important in their own right, those other activities were not necessarily supportive of the overseas marketing and promotion functions which should be at the heart of Bord Fáilte's role. In reality, they almost certainly led to a significant diminution in the level of dedicated and focused team effort that should characterise a dynamic international marketing organisation.
Moreover, it is clear that the Irish tourism industry has grown and matured in recent years and is now willing and able to take on more responsibility for its future development. Accordingly it is less in need of the intensive handholding and paternal direction which characterised the role of Bord Fáilte in earlier times.
The consultants concluded — quite rightly in my view — that Bord Fáilte, in future, should concentrate on its core activities of selling Ireland as a tourist destination overseas, helping the less mature elements of the industry to develop and providing market intelligence to industry decision makers. The review envisaged Bord Fáilte strengthening its marketing capabilities and, with a view to filling skill gaps, introducing new blood with industry experience. As an essential part of the change process, Bord Fáilte Éireann would transfer or cease some of is existing activities and its overall staff complement would be reduced by up to 70.
The ADL review was well received by the Irish tourism industry, in political circles and by the media and this convinced me that it had general acceptance and should be urgently implemented. I would like to pay tribute to my predecessor. Deputy Charlie McCreevy, who was instrumental in commissioning the review. While I have said before in public that I might take issue with his at times confrontational style vis-á-vis Bord Fáilte, I believe he had at heart the interest of the continued successful development of the tourism sector.
I am pleased to inform the House that much progress has been made since the beginning of the year in implementing the ADL review. A high level steering committee is overseeing the change process and has already met on ten occasions. As I said at a recent appearance before the Select Committee on Enterprise and Economic Strategy, we are now seeing clear evidence of the much desired internal organisational and cultural changes within the bord. A new mission statement and organisational structure has been put in place together with related senior staff changes. A new dynamic international marketing director has been appointed with an impressive track record in private industry. An attractive voluntary severance package has been available to staff which will enable the organisation to be revitalised and reinvigorated through staff movement and some limited recruitment of new blood. The "new Bord Fáilte" will be progressively launched over the summer months and we will see an exciting rebirth of the organisation and a new era in the marketing of Ireland overseas as a first-class holiday destination.
As regards existing Bord Fáilte functions to be divested, the tendering procedure for the registration and grading of accommodation is well advanced. Tenders are currently being evaluated and, subject to enactment of this Bill, I hope the new arrangements — of which I will speak later — could be put in place by September. My Department has also completed a consultative process with the key groups of accommodation providers affected by the proposed changes to ensure they fully understand what is being done and to take their concerns on board.
On the product approvals, or nonregistered tourist accommodation and services side, a number of the key associations, for example, in the bed and breakfast sector, have now taken up the challenge of accepting a greater level of responsibility for enforcing their own standards. Last week I had the pleasure of hosting a reception to announce the formal recognition of the Town and Country Homes Association and the Irish Farm Holidays Association as approving bodies for the Irish homes sector and the awarding of the shamrock symbol. I do not rule out the recognition of further associations subject to acceptable standards being met.
The tenders for Bord Fáilte's European Union product development grant administration role have been received and are currently being assessed to determine if costs and other considerations justify this function being contracted out.
The Tidy Towns competition has been transferred to the Department of the Environment and the Discover Ireland holiday brochure series has been put out to private tender. The Gulliver computerised information and reservation system has been fundamentally reassessed to see if it can be satisfactorily reconfigured in the context of an external commercial arrangement.
This is a series of dramatic changes which I believe represents a new and exciting chapter in the history of Bord Fáilte. I know that the chairman, board, director general, management, staff and unions — after some understandable initial reluctance — are taking up the challenge with enthusiasm and I am grateful for their support. Much care has been taken to ensure a full and comprehensive dialogue with the unions and staff in view of all the sensitivities involved. No compulsory redundancies are envisaged. I also wish to acknowledge the support and patience of the industry in regard to the changes being put in place. Change is always unsettling and demands adaptability and intelligence to accommodate it.
The Bill before us does not constitute a major overhaul of the Tourist Traffic Acts which govern the operations of Bord Fáilte and the registration, grading and approval of tourist accommodation. My objective has been to implement the ADL review with the minimum of legislative change and disruption to the industry. As I said earlier, one of the major changes recommended by the consultants was the subcontracting by Bord Fáilte to a commercial third party of certain inspection and associated functions in relation to the registration and grading of tourist accommodation. As these are statutory powers and functions at present vested in Bord Fáilte, amending legislation is necessary to allow the bord delegate them to a third party.
Under the current tourist traffic legislation the following categories of establishment require mandatory registration with Bord Fáilte; hotels, guesthouses, holiday hostels, youth hostels, holiday camps, caravan and camping sites, and holiday cottages and holiday apartment group schemes.
The standards to be applied, together with the relevant fees payable, in the case of each of the categories are provided for in regulations made under the Acts by the board, with the consent of the Minister for Tourism and Trade. Classification — or grading, as it is more commonly referred to — is not mandatory but is provided for under the current legislation and applies to hotels, guesthouses, caravan and camping sites and holiday cottages and apartments.
The Intoxicating Liquor Act, 1988 provides that in order to obtain a special restaurant licence the proprietor must present a Bord Fáilte certificate. The Act empowers Bord Fáilte to inspect restaurants for the purpose of issuing such a certificate. The inspection criteria to be applied and the fee payable are laid down in regulations made, under the Act, by the Minister for Tourism and Trade with the consent of the Minister for Justice. It is my intention to review the criteria for certified restaurants to see if they can be simplified somewhat while maintaining high standards.
The Tourist Traffic Bill, 1995 will enable the board to delegate to a contractor the bulk of its inspection and associated functions in relation to registration and grading of tourist accommodation and in relation to special restaurant licences.
Under the new arrangements, the board will continue to retain ownership of the registration and grading standards, which means they will continue to set the criteria for registration and grading and to prescribe the various fees involved by regulation made under the provisions of the Tourist Traffic Acts, with the consent of the Minister for Tourism and Trade. Bord Fáilte will also continue to retain responsibility for the operation of the final stages of the appeals mechanism provided for under the Acts, when applications for registration and renewal of registration are refused and in the case of cancellation of registration. They will also be involved in the final stages of the appeals mechanism for grading of accommodation. They will have a key role also in monitoring the performance of the contractor and in the selection process. All other aspects of the inspection process will, in future, be undertaken by the third party contractor.
The key roles being retained by Bord Fáilte in the registration, grading and certification process will be critical in ensuring that the board maintains tight control on the standards and procedures to be used while relieving them of the more routine physical inspection procedures. I am acutely conscious of the importance of maintaining high quality standards for tourist accommodation and there is no reason to believe that the changes envisaged under this Bill will adversely affect the current situation.
In selecting an external contractor to undertake the functions to be outsourced, we will be assessing tenders against a set of key criteria which will include (i) capability and experience to undertake the role, (ii) cost efficiency within the existing fee structures, (iii) financial offers to Bord Fáilte for the right to provide the service and collect associated fees, (iv) transparency and objectivity in the activities to be undertaken and (v) accountability. It is envisaged that the successful tenderer will be awarded the contract for five years but subject to a yearly review clause. Bord Fáilte will also have the right to cancel the contract in the event of unacceptable performance.
The Bill is quite short and comprises nine sections and a Schedule. The explanatory memorandum circulated with the Bill explains the proposed changes in detail. Section 2 allows Bord Fáilte to delegate to a third party, subject to contract, certain of its inspection powers and functions as set out in the schedule. Section 3 allows the board to make regulations governing the terms and conditions of any such contract. Section 4 provides for termination of a contract where this is deemed appropriate. Section 5 allows employees of the contractor to be designated as registration officers, or inspectors, subject to appropriate controls. The remaining sections deal with certain legal consequences in relation to holding of the accommodation registers and opinions of the board. I will be happy to deal on Committee Stage with any specific question Deputies might have.
It would be useful to give the House a brief update on developments in the tourism sector generally in the context of this Bill. The economic importance of tourism has grown enormously in recent years. Earlier this month I launched a major consultancy study of the economic impact of tourism in Ireland by Tansey. Webster and Associates under the auspices of the Irish Tourist Industry Confederation. Some of the findings were extremely interesting and I would like to share them with Deputies. For the first time in 1994, the number of overseas visitors coming to Ireland, at 3.68 million, exceeded the size of the domestic population; tourism's contribution to GNP has risen from 4.8 per cent in 1986 to close to 7 per cent in 1993, tourism supports employment for over 90,000 at present and is closing the gap on primary agriculture as a source of jobs in Ireland. Tourism has been one of the major growth sectors in the Irish economy with continued potential for further development and job creation. It is labour intensive, has a negligible import content and a strong regional development dimension. We can achieve continued growth while at the same time protecting our environment by careful management and a wider seasonal spread of tourist numbers.