I move: "That the Bill be now read a Second Time."
The purpose of this Bill is to increase the statutory limit on the aggregate amount of Exchequer grant aid which may be paid to Bord Fáilte to support tourism capital development works. Funding for this purpose is provided to Bord Fáilte under subhead B2 of the Department's Vote. Provision for this statutory limit was first introduced under section 2 of the Tourist Traffic Act, 1975, and most recently amended by the Tourist Traffic Act, 1995, which increased the limit to £22 million.
Taking account of the 1998 B2 Estimate, this limit is set to be exceeded before the year ends. The Bill proposes that the limit be increased to £50 million to enable continued payments to the end of the year and in future years. The Bill does not imply any commitment to provide funding at any level, nor does it commit the Government or the Oireachtas to any financial commitments, including the continuation of any particular grant scheme. The provision of capital funding to Bord Fáilte will, as always, be considered by this House on a yearly basis in the context of the annual Estimates and the budget.
In addition to the periodic reviews occasioned by these statutory limits, legislative and procedural changes in recent years have created further new opportunities for the review of Bord Fáilte's expenditure. These developments include the establishment of select Oireachtas committees dealing with Vote expenditure, and the making accountable, under the Comptroller and Auditor General (Amendment) Act, 1993, of the heads of semi-State agencies, including Bord Fáilte, to the Oireachtas for the achievement of value for money.
From the point of view of our economy and the Government's strategy for its development, Bord Fáilte is working in one of Ireland's most important and vibrant economic sectors. Irish tourism has seen a dramatic acceleration of growth over the period 1986-96 after steady but unspectacular growth over the previous 15 years. This growth has continued consistently for more than a decade. The World Tourism Organisation has reported that over this period, total foreign earnings from tourism in Ireland have grown by 370 per cent, compared to between 95 per cent and 191 per cent in other EU countries. This growth has contributed significantly to the creation of a more mature, dynamic, expanding and profitable economic and business sector.
The number of overseas visitors has increased from 2.4 million in 1988 to more than 5 million in 1997, a significant increase by any standards. Tourism is now our second biggest industry. The Celtic tiger's most vivacious cub supports almost 120,000 jobs — one in 12 of the workforce — and when domestic tourism is taken into account, it generates almost £3 billion annually.
With such economic indicators it is easy to see that tourism has become a vital force in the Irish economy. The industry is performing at an unprecedented level of success, with new records being achieved each year in visitor numbers and in the yield in overseas revenue. Figures released by the Central Statistics Office for the first six months of this year confirm that growth in visitor numbers from abroad is running ahead of target at almost 11 per cent, and the available figures for revenue are up by almost 13 per cent. These are phenomenal figures by any standard.
Bord Fáilte estimates on tourism revenue over recent years show that growth rates have been achieved in all regions of Ireland which are better than international and European annual averages. The continued promotion of a good regional spread and an extension of the tourism season are vital elements in our tourism policy, and while it is clear that we cannot direct tourists to areas where they do not wish to go, we can encourage and promote the beauty, quality of facilities and all-round attractiveness of our lesser known regions. To this end, last year I sought from this House an additional £5 million for special international marketing with a specific regional emphasis. Some of these initiatives targeted a range of advertising, publicity and other activities in the area of niche marketing on activities such as angling, golf, equestrian and walking. Another dealt with providing additional funds to integrate and supplement local and regional marketing activity, consistent with national destination spend.
Advancing the seasonality profile of Irish tourism has also received support with the promotion of early season events such as the national St. Patrick's Day festival. This festival has gone from strength to strength in recent years. I congratulate the St. Patrick's festival committee under its chairman Michael Colgan on the work they have put in and their commitment to its future. I hope this festival will be an occasion people will wish to visit in the future. I wish to quote from an article in The Irish Times of 31 March 1998 by Frank McDonald. This is an excellent article which epitomised what has been achieved by the St. Patrick's festival. While understanding that Ministers have to be abroad on St. Patrick's Day promoting the country, the article states:
Ministers might have had their eyes opened had they been in Dublin on the night before St. Patrick's Day when the four elements — earth, wind, fire and water — converged in magical street theatre in the heart of the city on College Green.
It was the night Dublin became a European capital city.
It was an unbeatable spectacle. The four elements gyrated through throngs of people, each trying to outdo the other, as figures waved huge white flags from the parapets and forecourt of the Old Parliament and a battery of rocket launchers on Trinity College's roof let off yet another fireworks display.
The Americans who had come expecting something more traditional were taken aback. It was all just a bit too "foreign" with not a leprechaun in sight. We have come so far. Seven years ago, when Dublin was European City of Culture, the organisers wanted a fireworks display at the Custom House. There was every reason to do so, as Gandon's greatest masterpiece had just been beautifully restored in time to celebrate the bicentenary of its 1791 completion.
The timidity of the times meant that any fireworks display could only take place in non-central locations, such as the 15 Acres in the Phoenix Park or in Dublin Bay, because of irrational and unfounded fears for "public safety". Dubliners were denied the vision of a fiery spectacle with the city as a backdrop.
Seven years on, to mark the opening of the St. Patrick's Festival, we have matured to stage the biggest fireworks display Ireland has ever seen right in front of, and over, the Custom House. It must have cost Aer Lingus a fortune, but that dazzling, unforgettable half hour in the hands of the Theatre of Fire was worth every penny.
The city was back, centre stage.
It was, in many ways, a celebration of how far it has come in under a decade. In 1991, there was not very much to celebrate but this is no longer the case. Dublin today is different and there was a real substance in this year's St. Patrick's Festival. It was not merely veneer to cover over the cracks.
I am pleased this House had the foresight to approve support for these initiatives. The response of the industry at large, and the regional tourism authorities in particular, has been very encouraging. Following consultation at local level, the representatives of the regional tourism authorities have been involved with Bord Fáilte in producing literature in various languages to promote their individual regions; promoting new business in new markets; providing support for the various product marketing groups on a regional basis; assisting in the construction of regional tourism internet sites and exhibiting at the various international trade fairs what the individual regions have to offer.
These are just some examples of where industry, working in conjunction with the regional tourism authorities and Bord Fáilte, can put in place sound business strategies to successfully market their facilities. The evidence would suggest that those operators who apply professional marketing practices are winning market share over those who do not. For my part, I will try to ensure that the benefits of the continuing record growth in tourism are spread throughout the island as a whole.
The benefits of a vibrant and expanding tourism sector have led to continuing and increased emphasis on the sector as an engine for growth in successive national economic programmes. The results of this have become very evident to anyone travelling around the country in recent years. The discerning visitor can now avail of a new and disparate tourism infrastructure such as conference, leisure and all-weather facilities which have added a new dimension and quality to the type of tourism product available in Ireland. The scale of private investment which has flowed into tourism over the past decade is also highly evident in the development of hotel facilities and in the upgrading of accommodation and hospitality facilities generally to meet and even exceed international standards.
The current Operational Programme for Tourism 1994-99 includes provision to support the development in Dublin of a dedicated national conference centre which will be capable of handling up to 2,000 delegates and the Government has made the attainment of a final decision on this project one of its main priorities. The long process to identify a developer for this facility is now entering its final stages. At its June meeting, the Management Board for Product Development, the decision-making body for grants under the programme, decided on the proposal submitted by Spencer Dock International Convention Centre Ltd. to develop the project at a site in Dublin docklands. Under the terms of the programme, the agreement of the Government and the EU Commission is required, on foot of a cost-benefit analysis, for projects of this scale. This cost-benefit analysis, which was favourable towards the project, was undertaken by independent consultants and, on 16 September, the Government agreed to the making of a submission to the European Commission recommending formal approval for a 33 million ECU grant towards the cost of developing the project. We now await the Commission's response which constitutes the crucial final stage in the grant approval process.
As we face the remainder of the decade and head into the new millennium, the challenge to create further economic growth and employment has never been greater. The targets for our tourism industry are ambitious and ongoing investment in marketing, product development, training and visitor services is vital to maintain growth in the face of increased international competition.
The substantial support of the European Union for the tourism industry over the past ten years has proved to be a sound investment. Some time ago, my Department produced a draft discussion paper on the development of tourism into the next century in the run up to the negotiations for post-1999 and the next round of EU Structural Funds. Preliminary consultations with the State tourism agencies and the Irish Tourist Industry Confederation have already taken place on these proposals and indeed on some proposals of their own. The objective of this exercise is to prepare the most persuasive case possible for the continued partnership between the Government, the tourism industry and the EU in the further development of Irish tourism.
There can be no doubt that the progress of the peace process and the improved prospect of peace and stability in Northern Ireland will be of substantial benefit to Irish tourism, not only in the British market but in our markets worldwide. Tourism's future requires that the principle of co-operation be at the centre of our policies and marketing decisions as we work together to promote the whole of Ireland in an increasingly competitive marketplace.
There is already much to build on in this regard as there has been significant cross-Border co-operation at both departmental and agency level for some time. At agency level, co-operation between Bord Fáilte and the Northern Ireland Tourist Board has existed since the 1960s and this has been considerably strengthened and facilitated in recent years by the availability of financial assistance for marketing and product development from both the European Union and the International Fund for Ireland. In addition, there have been regular contacts and co-operation between the two Departments on a range of issues of common interest in the tourism area.
As we approach the new millennium, there will be a major focus on the twin issues of economic and monetary union and on finding the right way forward for the industry when the current operational programme for tourism ends. For the tourism industry in particular, the introduction of EMU in less than three months' time will not only mean the adapting of our marketing strategies to the new scenario but the modification of computer technology and the provision of relevant training. With this in mind, a guide to the key issues of EMU has recently been produced as a co-operative venture between Bord Fáilte, CERT, ITIC and AIB, specifically for the tourism industry. This is of course in addition to the national EMU awareness campaign and other private sector packages.
Over the past decade or so, we have witnessed and indeed continue to witness the greatest programme of tourism infrastructural development in our history, which has involved huge levels of assistance from EU sources. This assistance, amounting to £220 million under the current operational programme, has played a critical part in raising the standard and quality of Irish tourism and in bridging the gap between it and international destinations identified in the two co-funded operational programmes to date. In view of the resultant progress achieved, it is probably unlikely that EU assistance will be maintained indefinitely. Industry self-sufficiency will, to a far greater extent, become the order of the day and this is a scenario for which we should be properly prepared. It is important, therefore, that with the advent of the euro we do not allow a perception to develop, especially abroad, that Ireland might be on the way to becoming a high priced holiday destination for foreign tourists. This means that everyone in the industry must resist the temptation to edge up prices here and there, for one service or another. I want our overseas visitors to be able to say they got good value and a fair deal in Ireland when they return home.
Earlier, I mentioned that the number of visitors to Ireland over the past ten years had more than doubled. Based on Bord Fáilte and industry growth projections for early in the next century, the number of visitors coming to our shores is set to rise to more than seven million by 2003. This will present us with a number of new and additional challenges with regard to environmental and congestion issues and in the provision of adequate visitor services. With this in mind, I launched a new initiative earlier this year under the Operational Programme for Tourism 1994-99, seeking proposals that would serve to demonstrate how particular problems affecting tourism and the environment might be dealt with.
The intention of the initiative is to encourage projects which would point to ways of supporting tourism development while at the same time sustaining the environment on which it is based. Examples of the types of projects sought included visitor management schemes such as those proposed for individual sites, towns or cities, environment awareness projects and innovative litter control systems. I am pleased to say that this initiative has already come to fruition with a number of projects recommended for consideration by the product development management boards.
With this increased level of visitors, it is important that the services provided by our tourist information offices keep pace with the changing times and increasing expectations of tourists, both domestic and foreign. Investment programmes are being undertaken by the regional tourism authorities to expand their network and to upgrade existing facilities. The major part of the moneys provided to Bord Fáilte under subhead B2 since 1995 has been allocated by the board to the regional authorities towards the implementation of these investment programmes.
Other areas which benefit from expenditure allocations by Bord Fáilte under subhead B2 include the development of regional tourist amenity signposting and regional heritage and tourist projects. This work has also benefited from European Regional Development Fund support under the current operational programme for tourism. By the end of the programme approximately £10 million will have been contributed by the State and the EU for these developments, including the provision of a new computerised system to improve the quality and efficiency of information and reservation services. The number of visits to tourist information offices last year was 4.3 million, an increase of 139 per cent on the 1988 figure of 1.8 million. Over the same period the number of bednights booked through these offices increased by 153 per cent, to 670,000. The tourist information office network is, therefore, a vital ingredient in the tourism infrastructure of this country, providing an after sales service to visitors as well as being a major player in the promotion of home holidays to Irish holiday-makers.
Section 2 deals with grant expenditure for the development of tourism related facilities and amenities. The existing statutory limit on grants of this nature is £22 million and expenditure up to the end of 1997 amounted to almost £21 million. The 1998 allocation for this type of grant expenditure is almost £1.1 million, bringing aggregate expenditure on amenity development by the end of this year to more than £22 million. The current statutory limit, last set in 1995, must therefore be increased to ensure completion of this year's amenity development programme. I accordingly propose that the limit be increased from £22 million to £50 million. I commend the Bill to the House.