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Dáil Éireann debate -
Tuesday, 18 May 1999

Vol. 504 No. 7

Private Members' Business. - Great Southern Hotel Group: Motion.

I move:

That Dáil Éireann calls on the Government to review the Aer Rianta proposal to dispose of the Great Southern Hotel group so as to ensure that it is retained as a single commercial entity, with a continuing significant contribution to local economies, and maintaining its tourism sectoral role as a flagship group for both hotel standards and all aspects of CERT training and that, if it is necessary to achieve these objectives, a State shareholding is preserved in the company and full consideration be given to an ESOP as part of any review.

I wish to share my time with Deputies Deenihan, Ulick Burke and Coveney.

Is that agreed? Agreed.

We have cause again to bring the Minister for Public Enterprise, Deputy O'Rourke, to the House, this time to discuss the future of the 800 people—

—who are extremely fearful for their future employment in the Great Southern Hotel group.

Before I discuss the substance of the motion, I wish to recall the situation that arose with regard to the TEAM employees. I and other Members of the House had a clear view as to what was in their best interests. However, the usual remedies, symptomatic of the Minister's office, such as consultations, assurances and so forth—

Did they not work?

—were offered but when it mattered, there was a volte face by the Minister who had come around to the view that there was no alternative for the TEAM workers. I am seeking to avoid the same situation or another fait accompli arising in this case. The Minister will throw her hands up into the air despite all the consultations. They will be worth nothing and will be thrown to the four winds in a garage sale in which the group will be split up and each hotel sold individually.

The same thing happened in 1977. In that year CIE sold the hotels in Bundoran, Sligo, Mulrany in County Mayo and Kenmare—

There was a Government decision requiring CIE to do so.

Does the Minister know the consequences? Is she aware of the state of Mulrany?

The Government took that decision in November 1976.

The Minister will have 30 minutes to make her contribution.

I am well able for the interruptions. This Minister's record is such that great care will be required when dealing with the future of semi-State employees. Whatever records or alibis she can offer on this occasion, the fact remains that Mulrany is a ruin today.

Why did the Deputy's Government sell it?

It was sold in 1977.

The Deputy must address his remarks to the Chair. The Minister will have an opportunity to speak.

It is not acceptable either to this House or to the Great Southern Hotel group employees that any hotel in the present group should end up a ruin. That is the reason for this motion.

I have read carefully the Arthur Andersen report on Aer Rianta, called "Future Strategic Direction: A report to the Minister for Public Enterprise". I understand it was commissioned by the Minister.

I did not commission it.

It is a report to the Minister as the company shareholder. The Minister appears to know nothing about what is happening in her Department. There is a letter signed by the Minister in the back of the report.

That is a letter to the chairman of Aer Rianta.

The Minister will have 30 minutes to respond.

I am referring to a report to the Minister for Public Enterprise.

The report deals with the future of the airports but its references to the Great Southern Hotel group are in the context of the group being non-core business. I will quote the relevant sections which will give a flavour of the experts' views. In section 3 the report states:

The group has a wholly owned domestic hotel chain – Great Southern Hotels – which, while operating successfully, is non-core to the group's airport management operations.

Section 5 states:

. . . establish an appropriate financing strategy (centred around borrowings in the first two to three years; exiting from non-core activities i.e. Great Southern Hotels; and no dividend payments over the period to 2002 . . .)

Page 8 states:

The authority to exit from Great Southern Hotels (in a manner determined through a consultative process with relevant stakeholders) and to use the proceeds from the sale to part finance the airports capital expenditure programme.

There is a further telling phrase in the appendix which discusses the advantages and disadvantages of the group:

The exit from Great Southern Hotels ("GSH") would raise additional capital for Aer Rianta but will be insufficient by itself to enable the company to fund its strategy and develop the potential of its existing airport related assets. GSH does not provide any return to Aer Rianta on the capital "tied up" in its operations. ... GSH is currently planning capital expenditure on its own account of c.£33m over the next 5 years. Exiting from GSH will also allow Aer Rianta to focus its management resources on its core areas of expertise.

The advantages of the group as quoted in the report include: "Is a non core activity", "Likely to realise maximum value", "Potentially a long list of interested parties", "Relatively straightforward transaction", "Low costs", "A new owner may bring marketing clout, high quality customer referrals, capital and new ideas to GSH". The only disadvantage with the group is: "Poor portfolio spread (concentrated in resorts) may reduce value".

There is not a word about employment security or retaining the group as a single entity. There is nothing about the group's role in the tourism industry or its training brief.

I did not write the report.

I am not saying the Minister wrote it. She is extremely sensitive this evening, obviously touchy because I will soon refer to the Independent Deputies, the life support on which this Government depends.

The Deputy is extremely thick.

Obviously the decision has been made.

It has not been made.

The purpose of this motion is to stop this course of action and to prevent the Minister saying: "God help me, what can I do? The consultants recommended it". I am aware of the Minister's sensitivities because Deputy Healy-Rae, I hope—

To give the Labour Party its due, it was out of the Government when the original decision to sell was made. Is that not right, Deputy Higgins?

Deputy Yates must be allowed to continue without interruption.

In this report, there is no reference to the optimum future for the Great Southern Hotel group. There is no reference to issues such as the national tourism interest, local regional economies and employment security, pay and conditions. They are not even mentioned. The only references are to "exit" and "disposal", as if the group was a piece of garbage which had to be removed. If that is to be the basis of the hotel group's future, it does not inspire confidence.

A major tourism marketing fair was held recently in the RDS. I was advised by experts in tourism that there is a nine month time lag between a company presenting its prices and marketing promotions to the trade and actually selling its product. The uncertainty generated by this report and the Minister's unclear stance on it has led to huge uncertainty which will undermine the business and security of the Great Southern Hotel group.

Management has asked that I convey one message to the Minister in this debate – that she should introduce certainty and establish a definite timetable to determine the group's future, whatever that will be, rapidly. However, the Government amendment to the motion contains the usual formulae which are the hallmark of this Minister. It states ". . . that such decisions will only be taken after the fullest consultation, in particular with the staff of the hotels, and with the overriding objective of maintaining and maximising employment; and that the Minister for Public Enterprise will continue to make herself available to meet with the staff of the hotels and their union representatives in that regard." It refers to everything except a commitment as to its future and the direction the Minister intends to proceed. I am not against consultation, but I am against the Minister endlessly keeping the ball in the air so that she can tell her backbenchers a decision has not been taken on this and using that as a substitute for decision-making. We want a decision taken on the group that would provide that it would be kept as a single commercial entity and, if necessary, a State shareholding in it would be retained and that it would maintain its role in terms of CERT training and its benefit to the local economies and not end up like Mulrany. I am not criticising Minister about a lack of consultation, I was never in doubt about that but we cannot use the fig leaf of consultation as a refuge for not setting out policy and making decisions.

SIPTU provided me with figures on training in the hotel industry for 1997 and 1998, which indicate its fears. Low pay and a shortage of skilled staff are common. A total of £13.7 million was spent on training in 1997 and £15.4 million was spent on it in 1998, making a total of £29.1 million over the two years. The industry's contribution to that was approximately £600,000 or 2 per cent. There is concern that the Great Southern Hotel Group might be taken out of the hotel training equation. That group plays a pivotal role in Rosslare in the winter months. I know Deputy Daly is concerned about this. Shannon interests are alarmed that they may be butchered, dissected and thrown to the four winds. A meeting was held last Wednesday, which the Minister did not attend.

I heard the Deputy was woefully rude to them. I was told that on the telephone today.

I am never rude to people. That was not the impressions got at the meeting. You were not at the meeting.

I got a telephone call following it.

Remarks should be made through the Chair.

The Minister's misrepresentation of the facts do not add heat or light to the debate. If flagship groups, such as the Great Southern Hotel Group, are taken out of the equation, she should not be surprised if standards in the industry and in the level of staff training from commi chef to manager are seriously undermined.

One of the few facilities Opposition parties have is their ability to focus the minds of Deputies on a vote on a matter on Wednesdays at 8.30 p.m. I appeal to the Independents, particularly the Independent from Kerry South to support this motion. Three hotels in this group, the Torc in Killarney, Parknasilla and the other Great Southern Hotel in Killarney are vital to the economy of south Kerry. Public meetings and deputations have met on this matter in response to which Deputies from Kerry South gave categoric assurances that they will deliver not only their own votes but those of other Independents to ensure they play their parts to secure the group's future. They will have the opportunity to do that tomorrow at 8.30 p.m. The consultation referred to in the Government amendment could mean anything, the phrase "no Government decisions" could be any decision in the future. Therefore, the Government amendment does not best represent the group's future. While I accept a Deputy or party might produce a better motion than mine and propose a 100 per cent State ownership of the group or other guarantees of employment and conditions, I appeal to all Opposition Deputies to vote against the Government amendment and to see it for what it is. The Government's approach to the matter is to get over the local and European elections just as it had to get over the Dublin North by-election before it decided what to do about TEAM. Its strategy is to wait until after 11 June before deciding what it will do about this matter.

The Great Southern Hotel Group's annual report and accounts will be published next week. They will show its profits increased to £2.9 million in 1997 and will increase to approximately £3.5—

£3.6 million.

—£3.6 million in 1998 based on a turnover of £26 million. That has been achieved with an owner who has been very reluctant to invest. There is the new Dublin hotel, but the owner has been a reluctant investor in terms of refurbishment and what needs to be done in the group's hotels around the country. In spite of that the group has yielded a 13 per cent net profit on turnover, which augurs well for its future success.

The uncertainty about the group's future has created dread and fear among its staff. They believe Aer Rianta has its problems. Despite all the clack and cackle about duty free sales, it is in dire jeopardy. The Minister launched a major campaign to maintain duty free sales, but it has run into the sand. There is the prospect Aer Rianta will face the abolition of duty free sales, high borrowings and a Government induced IPO, which is the way the Minister wants to proceed with Aer Lingus and, seemingly, with Aer Rianta. In those circumstances, the Great Southern Hotel Group cannot be considered as an "any other business" item at the tailend of Aer Rianta's problems. We must deal with it on the basis of its intrinsic merit and intrinsic problems.

At a major conference yesterday, entitled, I understand, "Sink or Swim"– I do not know if that reflects the Minister's political position – she said she treats every State enterprise on its merits. I put it to her that if she studied the terms put forward by her experts about the future of Aer Rianta, she would note it refers to an ESOP. There is an ESOP of almost 15 per in Telecom Eireann. There is talk of an ESOP for the employees of Aer Rianta but one is not mentioned for the employees of its subsidiary, the Great Southern Hotel Group. It is not fair to the employees to make fish of one and flesh of another. In the interests of fair play, the principle of an ESOP – which is not referred to in the Government's amendment – must be given the same consideration in regard to the 800 full-time employees of the Great Southern Hotel Group as in the case the employees of Aer Rianta.

A critical point put forward at the last Wednesday's meeting, about which the Minister appears to be so ill informed, was that the people are the hotel. A friendly ambience in a hotel and the staffs commitment to give a cead mile failte are critical.

The approach of dumping on the Great Southern Hotel Group because it does not fit into Aer Rianta's plans is not an acceptable way to proceed. In 1991 Aer Rianta bought the Great Southern Hotel Group for the princely sum of £10 million – a steal at that time. The group is not Aer Rianta's to dispose of or exist from as it sees fit. It is a matter for those who gave Aer Rianta the Great Southern Hotel for £10 million to decide what is in the best interests in terms of employment, the tourism product, the hotel sector and regional economies, particularly in south Kerry, where the group is one of its largest employers.

I am not saying I have set out what should be the ultimate solution.

I see that.

I set reasonable parameters within which one could proceed logically in the best interests of the Exchequer, the group's employees and the industry. I regret the Minister may have done a back street deal with Deputy Healy-Rae – who will have an opportunity to speak during this debate – which will get the Government over the local elections, but this issue will not go away. This issue cannot be tossed into the future and deferred indefinitely because that would only create more marketing uncertainty for the group. It will not be able to recruit the best people. The staff asked me how could they get the best chefs if, when recruited, they do not know whether they will have a job in 12 months' time I look forward to the Minister's contribution but I hope we will get more assurances than this fig leaf of an amendment which lacks any substance and only seeks to defer consideration of these major issues.

I acknowledge the fine contribution of Deputy Yates.

It was outstanding.

He certainly excited the Minister.

That is easily done.

Deputy Yates has changed his mind since last week's meeting.

The Deputy said my contribution was very fair.

It was not the same as what he said tonight.

I heard he was rude.

I was not a bit rude.

I judge from the Minister's admiration for him that she holds him in high esteem. It is fair to say that Deputy Yates is well on top of his brief.

He is wonderful. He cost the country half a million pounds.

He has a very good overview of what is about to happen. Agreements are being entered into and promises made that a lucrative opportunity to acquire hotels will be available to certain people if and when the Government allows Aer Rianta to sell the Great Southern Hotel group. We all hear information through the grapevine and perhaps the Minister is not directly involved. However, predators are looking greedily at this great national asset. They are waiting to pounce and no doubt this Government will not be found wanting in giving the direction to Aer Rianta to put these hotels up for sale—

Deputy Yates said I would not do that.

—and to allow some friends of the Minister the opportunity to use their considerable purchasing power.

If the Deputy is saying I have friends at that level, I do not.

I am not connecting the Minister with the sale of hotels but I am saying they could be friends of hers at the same time.

We should not have this crossfire.

The Minister is inviting comment. Tourism has taken over from agriculture as the principle source of income for the Kerry economy and, therefore, it is very important to the county. Given the failure of the IDA to attract a sufficient number of jobs to the county it relies increasingly on tourism to provide them. The Great Southern Hotel group employs over 300 full-time staff which, after Kerry Ingredients and Fexco, is more than any other single enterprise in the county. It provides about 160,000 bed nights all year round which is significant. Some counties would boast if they had that number of bed nights available to them.

The group provides 264 rooms all year round. The Killarney Great Southern provides 180 all year round, the Parknasilla Great Southern 84 all year round and the Torc Great Southern 94 rooms six months of the year. The group also provides the very important CERT courses to which Deputy Yates referred and which are needed so much in the industry. The removal of the Great Southern Hotel Group from public ownership will result in a significant loss for Kerry. I am convinced that if a private operator takes over and arrangements differ substantially from the present, it will not benefit the employees or the economy of Kerry.

Although the Great Southern hotels are located in the southern part of the county, nevertheless those who stay there use facilities in north Kerry such as Ballybunion golf club, attend the Listowel races, visit Tralee and also stay in Parknasilla. The hotels impact on the entire county. They have built up a standard which is unequalled not only in this country but in the world. Tourism started in Killarney when the first Great Southern hotel was built around 1860. Tourism growth in Killarney was synonymous with the growth of the Great Southern hotel there. For that reason, there is a close affinity between the Killarney, Torc and Parknasilla Great Southern hotels and the people of south Kerry, Killarney, Kenmare, Sneem and the surrounding areas.

This matter involves concerns greater than staffing. People are concerned that a community institution may be taken away from them. I take the Minister's word that she has made no decision or given any direction in this regard. However, in the event that a decision was made, I would like the concerns of the staff to be dealt with as well as consideration of what the Great Southern emblem means to Kerry. This is important. Tourism is part of the psyche of south Kerry. That is why I ask the Minister not to take this motion lightly, but to consider it carefully, to accept it if possible and to give clear answers when she replies to the questions raised by Deputy Yates. We need to know where she stands in order to reassure the workers and greater population of Kerry about what she intends to do with the Great Southern Hotel group.

I know the Minister is good in defence and she has told me on several occasions that she performs better when attacked.

I love it.

However, there is no point in the Minister giving a list of all the decisions made by coalition Governments in the past. That will not allay the fears of workers or the tourism industry. I would like the Minister to outline clearly her intentions. What is her vision? This may differ from the report to which Deputy Yates referred and the approach of Aer Rianta, which will make a major killing having acquired the Great Southern Hotel group, the Shannon hotel, hotel sites at Dublin and Cork Airports for £10 million and a loan of £4 million in 1990. It got a very good deal and has now decided, for its own expediency, to sell out, which is no doubt what it wants to do.

Aer Rianta is accountable to the Minister and she must stop it. She must intervene on behalf of the workers and the tourism industry. There is concern about this in south Kerry. There is pressure on Deputy Healy-Rae who has made commitments in this regard. If the Minister gives a half-baked reply to Deputy Yates, I would hate to see the effect of that on Deputy Healy-Rae in south Kerry as he is a very good friend of mine. It will affect him and he will be under considerably more pressure. The more pressure he is under the greater the affect on the lifespan of the Government. The Minister should bear this in mind.

I am delighted to speak in support of this motion put down by Deputy Yates. There must be many people in the employ of Aer Rianta who are concerned about the Minister's track record. For example, she has failed those involved in duty free sales which is a core operation of Aer Rianta. To all intents and purposes, duty free is finished.

It is not.

That is good news for many people.

Will it remain?

It is on the agenda of the EU Heads of State.

It is welcome but we have heard that on several occasions in the past when the Minister visited Europe. Her record in regard to Aer Rianta is two down and one to go.

Aer Rianta's proposal to dispose of the Great Southern Hotels group is in response to the Government's prevailing policy to withdraw from commercial involvement in semi-State companies. In its strategy for the next ten years Aer Rianta's vision for the future is to be a premier international airport management group meeting the needs of its customers. The Great Southern Hotels group no longer has a place in this vision.

One of its recognised core activities in the past was the management and operation of its wholly owned hotel chain; the others were airport management and duty free. We are now told that this element of the company is non-essential and its management wants to offload the hotels in order to use the proceeds from the sales to part finance the airport's capital expenditure programme. The hotel chain is operating successfully, with a profit of £3.5 million last year, a 20 per cent increase on the previous year's profits, and this reflects the buoyancy of the tourist industry.

If Aer Rianta is to withdraw from this non-core activity and use the finance for investment in its core activity of airport management, will the Minister ensure that part of the proceeds will be spent on regional airports as well as the management of the three major airports? If the two hotels in Galway, the Great Southern, Eyre Square, and the Corrib Great Southern, are sold will part of the proceeds of these sales be put into the development of Galway Regional Airport?

There is great uncertainty within the board of Aer Rianta about the future of the hotels. The chairman, Mr. Noel O'Hanlon, stated last year that he categorically denied that the group was being sold. He said: "Great Southern Hotels is not up for sale, has not been offered for sale and we have not talked to anybody about selling it." The Minister seems to indicate that there is support for the disposal of the hotel group within the Cabinet. The chief executive of the group, Mr. Eamonn MacKeon, has professed no problem with the idea of the group leaving the State sector. The hotels are ideally located in airports or high density tourist areas, such as Galway and Kerry, and are obviously an attractive proposition for a major hotel operator to purchase individually or otherwise. It would be a serious mistake if there were to be a break up of the group because it has acted at all times as the flagship of Irish tourism.

There is no mention in the Minister's report of the Shannon College of Hotel Management at Shannon Airport. This institution has provided the State with core personnel and managers for the tourism industry but its future has not been discussed. There must be serious concern within the management of the school about its future and also among people who want to enter it. There is serious concern about the Government's and Aer Rianta's attitude towards the provision of adequately trained managers for our many hotels. People who have attended the college are at the forefront of Irish tourism and hotels throughout the world. A serious mistake has been made by not including it in any vision for the future of Great Southern Hotels. The Government has failed to recognise it even as part of the higher education grants scheme. It is the last straw when it cannot even be mentioned in the Minister's report. There is great concern among the staff regarding their future employment. They have no future within the hotel group because of the Government's inaction in this area. This issue must be addressed.

Mr. Coveney

I congratulate Deputy Yates on bringing this motion before the House and I hope it focuses the Minister's attention. I am concerned that there seems to be a rush to sell off the Great Southern Hotels group and make as much money as possible for Aer Rianta, then wash our hands of responsibility for all eight hotels. The hotels are located at Dublin Airport, Parknasilla, Rosslare, Shannon, Killarney and Galway.

I am not necessarily against the idea of reducing the State's role in the running of the hotel group and I understand the arguments for selling it and raising much needed funds for Aer Rianta. However, the dangers of selling off such a large group, hotel by hotel, to raise cash through the disposal of assets must be stressed. The aim seems to be to make a quick buck regardless of the consequences and this worries the Opposition. The group is worth more to Ireland than merely the accumulation of its assets in monetary value.

Three primary values must be considered before selling off or partially selling off the group. The first is its influence on tourism. Tourism is our largest industry and is set to continue to grow at a phenomenal rate, as it has done in recent times. The standard of hotel accommodation has contributed to this growth in a major way. The Great Southern Hotels group sets the standard for the hotel industry, which serves tourists who visit Ireland. I agree with Deputy Yates that this hotel group is the flagship of the hotel industry. The State currently has a direct involvement in setting the standard for the hotel industry and that has its advantages in ensuring a quality service for tourists when they reach our shores.

My second concern is the group has a more direct impact on the hotel industry than setting high standards. If a hotel manager is asked what is his or her biggest problem with regard to the running of an establishment, he or she will say that it is staffing, specifically the difficulty in acquiring quality trained Irish staff. While canvassing in Cork recently a hotel manager told me that his biggest worry regarding the hotel industry was not that tourists would stop coming to Ireland but that we would not have the staff to deal with them in our hotels. The Great Southern Hotels group plays a crucial role in training hotel staff for the industry through CERT programmes. If one thinks that a private hotel investor will be concerned about the greater good of providing staff, training facilities and places, one is very much mistaken. His or her mind will understandably be on profits. A good example of the group's contribution towards hotel staff training is in Killarney where one of the hotels there closes for six months each year and provides much needed training facilities for staff within the group. If the Great Southern Hotel group is broken up into eight different units, its wider role will disappear. The hotel group provides 880 jobs; it is a massive employer. If the group breaks up I would be concerned about the security of those jobs. I hope the Minister will address that matter.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann notes that the Ministers for Public Enterprise and Finance are examining the future options for the Great Southern Hotel group in the context of the report on the future strategic direction of Aer Rianta; that no Government decisions in relation to the future of the hotel group have been taken; that such decisions will only be taken after the fullest consultation, in particular with the staff of the hotels, and with the overriding objective of maintaining and maximising employment; and that the Minister for Public Enterprise will continue to make herself available to meet with the staff of the hotels and their union representatives in that regard.".

It must be very comforting for Deputy Yates to have an admiring chorus each time he stands up, saying that he is such a wonderful person. I hope it makes him feel good.

I wish the Minister had a chorus.

I was just going to say that I will have to have a chorus. Of all the contributions, I found Deputy Coveney's the most clear-cut. He had a fair idea of what he wanted to say. He had no disagreement with selling the hotels but said they should be sold as a unit. That is a clear-cut point of view.

No Government decision in relation to this hotel group has been taken, despite what Deputy Deenihan said. Despite the jibes that Deputy Yates made about consultation, I have been committed to it all my life. As an ASTI negotiator, I used to be a shop steward in my school and the idea of consultation is a proper one. It is interesting that Deputy Yates never mentioned employment in his motion, although it is mentioned in my amendment.

As regards consultation, I offered to meet the union representatives last Friday, but on Thursday evening the unions rang to say they could not meet me formally until the following week. The meeting has been fixed for this Thursday. I have already been to the Corrib, Eyre Square and Shannon Great Southern hotels and met with groups of staff representatives. I intend to visit all the hotels in the group to meet with the other staff representatives. I also met with many GSH staff outside the gates of Leinster House last week. Contrary to what Deputy Yates said, the GSH staff said he was extremely – perhaps rude is too strong a word – blunt and had an open mind. However, he then said he did not have an open mind, so they did not quite know where he stood.

The motion is all over the place and I do not understand what the Deputy means. It calls on the Government "to review the Aer Rianta proposal to dispose of the Great Southern Hotel group so as to ensure that it is retained as a single commercial entity". However, it is a single commercial entity at the moment. The motion goes on to state that "if it is necessary to achieve these objectives, a State shareholding is preserved in the company". That is interesting, but I do not quite know what the Deputy is getting at. The motion also states that "full consideration be given to an ESOP as part of any review", but ESOP betokens just one thing. Therefore, I do not know what the Deputy means. It seems that he set out to write a motion, but then changed his mind half way through it.

Deputy Deenihan said I was not to refer to previous times, but I am my own person and will do so. Mr. Peter Barry was Minister for Transport in November 1976 when a decision was taken to sell five hotels in the Great Southern Hotel group, in Kenmare, Mulranny, Sligo, Bundoran and the Russell Court in Belfast.

Interestingly enough, on 20 January 1987, when the Labour Party had left the coalition Government, a decision was taken, among others, which read as follows: "To approve the disposal by the State of 100 per cent of its holdings in Óstanna Iompair Éireann hotels so as to achieve the maximum capital savings for the Exchequer". The Government decision on 20 January 1987 was to dispose of it. Deputy John Bruton, whose name is on today's motion, was then Minister for Finance and Deputy Jim Mitchell was Minister for Transport.

It is as well to put these matters on the record so that it is quite clear that the decisions to sell these hotels were made by Fine Gael Ministers. On 20 January 1987 Labour had left the Government when the decision was taken "so as to achieve the maximum capital savings for the Exchequer". There was no such thing as training, it was just a case of "Get the money and run, boys and girls". That is in the past but I quite agree that we should not dwell upon it. We should deal with the future.

The report which was waved about in a frenzied way by Deputy Yates was not mine. I asked Aer Rianta to commission a report which was delivered to me. I commend the group on how it went about its business, but rather than take any report at face value we are having it analysed. When it has been analysed I will go to Cabinet and a collective decision will be taken on it.

The idea that I should not speak to anybody or that I should run around and make up my mind on the floor of the House on what is a very important issue, while not having time for consultation, is anathema to me. I will not do so and neither would any of my colleagues.

It is easy for Deputy Yates to sneer about TEAM, but when his party was in Government it did nothing about it for a long time. It took some courage to battle into TEAM. I ensured that the workers in TEAM could meet me at any time. I must have met 1,000 of them individually before the matter was all over. It was a long process. They had every right to be met and talked to. That is the way I will do my business. I will not do it in a helter-skelter or daft way which would leave no one satisfied. One would end up with a hasty, ill-conceived decision. I make no apology for wanting to talk to people and I am determined to do so.

I recognise the hugely significant role within the local and national economy that the Great Southern Hotel group occupies. Over the years, my husband and I have been devotees of the Great Southern Hotel in Killarney. I might add, before Deputies run off to a tribunal, that we paid our full whack. For almost 20 years we have gone to Valencia on our holidays and en route, both there and back, we take a break in Killarney and experience a bit of civilisation before we go. There is nothing wrong with Valencia but it is spartan enough. I am sorry that Deputy Deenihan has left the Chamber because we could have shared reminiscences about Kerry.

I know the two Great Southern Hotels in Galway, having travelled there from Athlone. I have been in all the Great Southern Hotels. We spent four holidays in Rosslare. I have been in the one at Shannon, the Torc and the others over the years. They are good examples of where very fine people work to a public remit and are determined to give good service, although not in a servile way. If one provides a product with good service, there is nothing servile in it. It is good work.

In developing its response to my request, the board of Aer Rianta established a sub-committee to work with management. That is the report the Opposition Deputies have all been waving about. Deputy Ulick Burke said the Cabinet had a mind to sell the hotels but I do not know where he got that idea. The Deputy mentioned what Mr. Eamon McKeown had said. However, Mr. McKeown, as chief executive of the Great Southern Hotels group, is entitled to express his view.

The Minister ignored it.

He is entitled to his view. I commend Aer Rianta on taking its duties seriously. I took the idea of writing to a board from Deputy Dukes and it will be interesting to see how he votes tomorrow. When I took over from him he had already written to Aer Lingus asking that body to prepare a strategic report. I borrowed the same formula when I wrote to Aer Rianta as I felt it was a competent formula.

The Minister for Finance and I are analysing the Aer Rianta proposals and when we are finished I will bring our findings to the Cabinet. I want to make it clear to the staff of the Great Southern Hotels group and their unions, that I am available to meet with them and to discuss their concerns. I arranged a meeting for next Thursday but it had to be cancelled, perhaps because some people could not attend. The professional analysis of Aer Rianta's proposals which I am having carried out is focused primarily on the future direction of the company. The chairman of Aer Rianta has advised me that the board has retained Arthur Andersen to focus on the options for the Great Southern Hotels.

I want to find the right future for Great Southern Hotels that will also be right for the staff in terms of their employment and other rights. as well as for the Irish tourism industry.

This Aer Rianta review process should not be regarded as a threat to the Great Southern Hotels group. The Great Southern Hotels group has a proud history and I know it will have a vibrant future. The review process is an opportunity for the group. It is my intention that any changes that might be considered by the Government in the course of its review of the future strategic direction of its parent company, Aer Rianta, will be to the benefit of the Great Southern Hotels group and its staff. It would be wrong to assume that one company needs to be placed at a disadvantage for the benefit of the other.

There are great opportunities ahead for the future development of the Great Southern Hotels, just as there are great opportunities for the future development of Aer Rianta. The development of one does not preclude the development of the other. The issue is how best to ensure that both companies are set on the right track and that is what I am having examined.

The Galway Great Southern dates from 1845 and the Killarney Great Southern from 1854. This was the heyday of rail travel and the hotels were designed to take in weary passengers at journey's end to refresh and delight them. They were resort hotels to be supplied with customers by the new railway and that era marked the first beginnings of the tourism industry as we know it today.

The railway company put together a package, not only building the railway track, but also developing top quality hotel accommodation in the towns at the end of the lines. The idea was that these quality hotels would provide a tourist attraction and this would, in turn, promote greater use of railway that served the location.

The State acquired the hotels as part and parcel of its acquisition of the various private railway companies and their amalgamation to form CIE. By the 1960's, with the decline of railway traffic and the growth in use of the motor car, the hotel group developed several motor-inn type facilities such as the Rosslare Hotel, the Torc in Killarney and the Corrib in Galway. The Russell Court in Belfast was also developed in this period.

After the oil crises of the 1970's and the downturn in tourism, in 1977 the Government sold the Kenmare, Mulrany, Sligo and Bundoran hotels and the Russell Court was disposed of in 1983. Those five were sold so that capital could be invested in the others. It was different from the decision to sell taken in January 1987, which was taken in order to get the maximum capital available. Lest I wrong the person who took the decision to sell in 1976, capital was raised for essential refurbishment of the remaining hotels.

Deputy Yates said that the Mulranny hotel had become almost a ruin but I am sure he regrets that his Government decided to sell it. When my husband and I were a young married couple we spent a weekend there with another couple and I will never forget the beauty of the place. It was a short-sighted decision to sell it but it was done to raise capital for the others.

Trading conditions remained very poor. By the early 1980s the Great Southern Hotels group had accumulated losses of £10 million. The group was then transferred to CERT, the national body responsible for the co-ordination of education, recruitment and training for the tourism industry. The Government provided for a re-financing package of £14 million to cover accrued losses, rationalisation of the group and a programme of capital development. A further £2.7 million was made available in 1986, bringing the total amount to £16.7 million. By early 1987 the company was trading profitably and it was then decided to sell the hotels.

The then board of Great Southern Hotels recognised that further significant investment in the group was needed to realise its potential. The board recognised that the company was incapable of financing the required development programme from its own internal resources. The Government decision of January 1987 was never implemented. In 1990 the Government decided to accept an offer from Aer Rianta to acquire the six hotels of the Great Southern Hotels group in return for a cash payment of £10 million to the Exchequer and a commitment to invest in further development. Aer Rianta agreed to contribute £4 million immediately to a further refurbishment programme. Aer Rianta also transferred its hotel at Shannon airport to the Great Southern group bringing the number of hotels in the chain to seven.

Today the group consists of eight hotels and five are located in prime tourist destinations. These are the Killarney Great Southern, the Torc Great Southern and the Parknasilla Great Southern in County Kerry and the Galway Great Southern and the Corrib Great Southern in Galway city. The remaining three hotels are located at the principal tourist and business gateways to the country; one at Shannon airport, one in Rosslare and a new hotel at Dublin airport. Cork Deputies will be interested in the plans for a further hotel adjacent to Cork airport which is due to commence construction before the end of the year.

The hotel group has progressed well over the years since its acquisition by Aer Rianta. Turnover in 1997 increased by 4.4 per cent to £22 million while the net profit grew by 12 per cent to £2.9 million. The 1998 figure is in the area of £3.4 to £3.6 million. Aer Rianta has not taken any dividends from the hotel group and has invested significantly since its acquisition. Between 1990 and 1998 a total of £32 million has been invested, including the construction of the newest addition at Dublin airport, which cost £10 million. The Great Southern Hotels group has made profits of £18.4 million in that period. Aer Rianta has definitely fulfilled the remit it was given in 1990.

The Great Southern in Killarney now remains open all year round and produced record results in 1998. Parknasilla will remain open for all of 1999 for the first time in its 104 year history and Rosslare has extended its season to 11 months. The company's marketing plan is geared to developing more off-season business in the winter at these locations. The Great Southern Hotel at Dublin airport is a state of the art development. It has created employment for 87 new staff with particular emphasis placed on recruitment from local communities. The addition of this property substantially enhances the geographic spread of the group and will help to reduce its exposure to seasonal locations. There have already been huge additions to it as another 80 bedrooms and six new conference rooms are to be added. The development of a hotel at Cork airport will fulfil the objective of having a Great Southern Hotel at each of the main tourist gateways. This hotel will have 75 bedrooms and should be completed by the end of next year.

It is a good time to examine the options for the future development of Great Southern Hotels, as business has never been better for the Irish hotels industry. The current performance of the sector tells the story. The last five years have seen continuous and significant growth. Fifty new hotels were built in 1997, 37 last year and a further 30 are expected this year. The number of hotel rooms has risen by approximately 50 per cent. Dublin has witnessed the highest growth rate. We are all aware of being constantly surprised at the unexpected appearance of yet another new hotel in the city. I want the hotels that belong to the Great Southern Hotel group to be able to participate fully in, and benefit from these positive developments in this important sector of the economy.

The expansion of the hotels sector is underpinned by the continuous growth in tourist and business traffic to Ireland as well as buoyant Irish origin tourism growth. While growth in tourism was expected, the rate of that growth has exceeded all expectations.

Irish tourism continues to grow. Last year there was an increase of 9 per cent over 1997. The US and UK markets continued to flourish and the strong Irish economy ensured the further growth of the domestic sector. Continental traffic was disappointing. The domestic economies of Germany and France are performing sluggishly and the number of visitors from those countries has been disappointing. Overall, the message remains one of growth in visitors and in demand for hotel accommodation.

The Opposition motion mentioned employee share ownership schemes. As I have stated in the past and continue to say, the issue of ESOPs in commercial State companies can be dealt with only on a case by case basis in accordance with the particular circumstances of the company in question. Deputy Yates told me on a previous occasion that his party had changed its mind from the ESOP policy as enunciated by the previous incumbant of my office. I am glad this is so. I spent two and a half glorious years in Opposition and I loved the freedom of it.

The Minister may soon enjoy more of that freedom.

I would be delighted to do so. I enjoyed the freedom to develop policy and to say what one wanted. I find the suggestion that I wish to avoid consultation with employees very hurtful.

The Minister should not misrepresent me.

I have not yet met the group of unions. I have not even had a full collective meeting although I have met individual groups of unions in the hotels I have mentioned, and I will meet the others. How can I make a decision before I talk to the workers? That would be extraordinary and it is not how I do business.

I am amazed at the suggestion that any set of workers could have faith in Deputy Yates's party. I do not bracket the Labour Party with Fine Gael in this matter. Deputy Spring, on the evening of the famous Telecom Éireann conference in Tralee, sought to change his Cabinet colleagues' minds on the ESOP issue but he did not succeed. Fine Gael had hardly left Government when they espoused the concept of ESOPs. The suggestion that employees might have confidence in Fine Gael's Machiavellian change of heart is amazing.

This Government, more than any other, has shown that the staff and their long-term interests are to the fore at all times when future options for the development of State companies are being considered. Great Southern Hotels has a loyal, professional group of employees who are, and will continue to be, a key factor in the continued success of the group.

The retention and recruitment of staff in the hotel business is becoming increasingly difficult. An Opposition speaker remarked that managers trained at great expense by the Great Southern Hotels group leave the group to work in other hotels throughout the country. I recognise that staff will be very concerned whenever the possibility of major change is mooted. I have been advised by the chairman of the board of Aer Rianta that they have extended the appointment of Andersen Consulting to examine further the range of options in respect of the hotel group and to engage closely with the staff in the course of this process.

The Minister has avoided every key issue.

As the amending motion indicates, any decisions in relation to the future of the hotel group will only be taken – and this is my badge of honour and not Deputy Yates's badge of shame – after the fullest consultation—

I hope Deputy Healy-Rea is listening to this.

—in particular with the staff of the hotels and with the overriding objective of maintaining and maximising employment. Deputy Yates's motion did not contain a single word about employment.

It is in my speech.

Why did he not put it in the motion? The entitlement of workers to remain in their jobs should be the kernel of this question.

The Minister never left the classroom.

Can the Minister guarantee those jobs? There is no substance in her speech. She has spoken for half an hour but has not addressed the issues.

If wanting to talk to people is sinful, then I am the greatest sinner in the world.

The Minister is misrepresenting my argument.

Surely the workers are entitled to have a say. This is entirely undemocratic and typical of Fine Gael. On 20 January 1987 Fine Gael wished simply to sell the group for the most money possible but Deputy Bruton now puts his name to this hybrid motion which refers at the same time to ESOPs and commercial entities. I would much prefer Deputy Michael D. Higgins's full-blooded proposal to keep the group in the State sector. I presume that this will be Deputy Higgins's proposal.

It is difficult to know what the Minister is saying. Her philosophy seems to be whatever you say, say nothing.

The Deputy makes me laugh.

I do not make the Minister laugh. What I say upsets her. The Minister sold no beef to the Russians.

According to The Irish Times today, Deputy Yates has cost the State £500,000. He told lies about being at Dublin Airport when he was, in fact, in his clinic in County Wexford.

That matter is before the courts. The Minister should take care not to undermine the Department's case.

The Minister should withdraw the expression, "told lies".

I do, of course. I cannot understand how Deputy Yates mistook County Wexford for Dublin Airport. This is a very strange configuration of locations.

I always took responsibility for my Department.

And so do I. I remember when Deputy Yates said Cablelink was in a mess. Cablelink has been satisfactorily sold. He said TEAM Aer Lingus was in a mess and that company has been satisfactorily sold.

I remain convinced that my remit is to speak to the workers. I reject the Fascist like suggestion that I should make a commitment without speaking to anyone; this has extraordinary implications. It is indicative of what happened in 1976 and in 1987. I shall not be part of a unilateral decision; I shall talk to the people concerned.

I am very happy that my colleague and friend, Deputy Higgins, is here. I will read the report of what he says and take careful note of it.

When, at the request of SIPTU, Deputy Moynihan-Cronin and I arranged a meeting to discuss the future of the Great Southern Hotels and invited Deputies and Senators, about 11 of whom attended, I felt a sense of déjà vu. I grappled with the question of the future of the Great Southern Hotels group in the 1970s and 1980s and now here we are again, in 1999, discussing the future of the Great Southern Hotels group. I had hoped the Minister would have remained in earshot so that I could confirm for her the position of my party. My party supports the three clear SIPTU demands – that the hotel group remain a single entity and that there be security of employment, within a State structure. I have no difficulty in acknowledging the position taken by Deputy Yates which is a considerable advance towards the position I have enunciated. It would be wrong of me not to welcome that but it needs to take a further step forward and place the hotel group where it should be – within a State structure.

While the Minister spoke with great sincerity about her pleasant days in the various hotels in the hotel group and enjoyed the ambience and philosophically informed service that she received from the staff, the last thing that they want at this stage is a further debate about uncertainty. I recall the decision in 1987 to offer the hotels for sale. I was a Member of the other House at the time. The election literature that I printed that year contained a large section about the hotels. It was proposed to retain the downstairs section of the wonderful Great Southern Hotel in Eyre Square, Galway and turn the upstairs bedrooms into offices. When I discussed this recently with the chief executive of the group he said that that was history and that they were just local businessmen. The sale of previous Great Southern hotels was a disaster and the price at which they were sold was close enough to an immoral scandal.

The case that has frequently been made is bogus. This discussion is not assisted in any way by the crude statements of the chairman of Aer Rianta on television in which he reduced the argument to what is the State doing making beds and serving meals at the end of the 1990s. Nobody but an anti-State ideologue could make such a remark. The reality is simple.

The expansion of the hotel industry in terms of employment creation through an advance in the tourism industry has been referred to. There is another figure that has not been mentioned. Approximately 46 per cent of those involved in the industry undergo training in their own time and at their own expense. The comparative figures for the contribution of the State and private sector to training were given. They make interesting reading.

The issue is simple. The Great Southern hotels have an increased asset value and a trading profit. Not only do they provide training they also provide quality management, including quality chefs who have been in kitchens at all grades. Where is the evidence that the quality training necessary not just for the group but for the future of the hotel industry is provided elsewhere? When I put this question to the chief executive, Mr. McKeown, with whom I had an informative meeting, he replied that things have changed in the hotel industry. They have not in relation to the facilities available for training across the sector. Improvements have been made but there is nothing that can match the training now provided. Other than for ideological reasons, why would one want to wreck the flagship of the industry?

It has been suggested that this has to be done in the name of inevitable change. This is an untruth. There is nothing in any EU directive or treaty which requires the breakup of the group because the State has an interest in it. One can find models across the European Union of state and semi-state groups involved in the hotel industry. Some of the better ones provide training. It is nonsense to suggest, therefore, that this has to happen.

Far be it from me, as a member, to stand in the Minister's way in consulting SIPTU but as the Minister for Arts, Heritage, Gaeltacht and the Islands, Deputy de Valera, Deputy Daly or any of the other Government Deputies present at the meeting last Wednesday could tell her, its members are clear on what they want – security of employment and conditions, the hotel group to continue its success story within a State structure to ensure quality training is available in the industry.

There is no need for confusion. To assist the conversation which will take place on Thursday, there is a difference between going into talks at which everything is on the table and having talks which are based on the assumption that the hotel group is to be separated from Aer Rianta and at which one will be asked how one feels about the various options. That is what is on offer from the Minister. If she had said that she was taking the proposal in relation to exiting or being thrown out of Aer Rianta off the table and would start from scratch about the future of the group, the position would be different.

The Minister said that she was discussing with the Minister for Finance the Government's response to the consultancy report on Aer Rianta. One would not need a PhD to deconstruct that remark. The report which was presented in considerable detail by the Minister did not acknowledge the importance of the contribution of the Great Southern Hotels Group to training.

Fianna Fáil goes through phases where it states that all it is doing is listening. In Opposition it states that the Government is not listening and everybody is whispering but when all the listening and whispering is over one has to listen to those with something to say. They were people like, for example, the senior chef who was perhaps one of the strongest people who spoke about the staff who came through the kitchen. He spoke about where they are now and how standards in other places have depended on the standard to which the young person was exposed, the scale of the operation which was able to carry the level of training and the fact it was willing to lend itself to the State training structure through CERT. If people want to tell me this is all available elsewhere, I will certainly be open to hearing that.

I do not want to talk about groups, but I suppose I am required to do so. If one talks about Ryan's, Jury's or Doyle's, one cannot compare their training capacity with the Great Southern Hotel Group's capacity. Here is what is at stake. We have something which has international acclamation. The Minister, her partner and others speak lovingly of their experience on their way to primitive villages and of coming back feeling resuscitated after calling in. That is all right, but the fact is that the Great Southern Hotel Group is working. Why break it up for the narrowest and daftest ideological reasons?

One comes then to the other issue in the report on Aer Rianta which I am as well able to read as anybody else. If Aer Rianta wants to buy, let us say, Rome Airport, building the hotel in Cork, which the Great Southern Hotel Group wants to do, as well as refurbishing its hotels, as it needs to do, as a set of capital requirements, has to go into competition with Rome Airport. One can see the argument for taking the hotel group from one State setting to another. What one cannot say, however, is that because the airport facilities group wishes to borrow for mainstream core airport expansion activity, it automatically means it can shed other parts it has acquired below capital cost and simply say it will use the yield from this as a drop in the ocean towards what it really wants when its borrowing requirement is lifted for its other activities. That is just callous in relation to the question of the hotel group.

The hotel group in its own State structure has asset value, trade and human capital sufficient to be able to justify borrowings of a considerable level which would enable it to carry out refurbishment work and to build a hotel in Cork. If it is the case that it is an anti-State thing, people should be up front about it. If people want to say, as the chairman of Aer Rianta did, that they want to take the State out of the hotel industry, it is better if it is said openly rather than being said in a covert fashion. I want to say bluntly, however, may God help us in relation to what would have been the Irish tourism and hotel industry yesterday, today and tomorrow had we not had the Great Southern Hotel Group, the standards it made possible and if we had had to rely on the many people who paid slave wages in appalling unorganised conditions in one venue after another across the country. It is not to anybody's credit that of those who go on day release to do training courses, 46 per cent have to go in their own time and pay for it themselves. It is to that wonderful chaos of the marketplace that the Great Southern Hotel Group would go.

The motion stops short of the step I would take. It asks something the Minister will not even concede. She will not concede the group can hold together, that the State should ever have a stake or share or concede in relation to employee participation. She justifies it all on the basis that the meeting with SIPTU did not take place last week and is taking place this week. Frankly, I find that rather unconvincing. We really need to know where we stand in this matter.

It will be for the stuff of novels to write about the rather Boucicault commitments of Deputy Healy-Rae in Kerry who said that not only was he delivering his own vote, but the vote of several other Independents in order to keep the hotels. I am sure he was carried shoulder high for a brief moment. I wonder what will happen when we come to the end of the debate at 8.30 p.m. tomorrow. Far from leaving the hotel group in the State structure, he is not even willing to vote for the hotel group staying together or for employee involvement in the future of the hotel.

It is time all that old guff was stopped. It is time we stopped interfering with something which is working very well. It is time for the people who say they have had wonderful experiences, as I and my family have had in different Great Southern Hotels, to respect the rights of these workers. I heard the young woman, who is the shop steward at the Dublin hotel, explain, as the personnel management might, how pleased she was that they are booked out every day and that they are continually busy, yet her colleagues can simply say all that is put at risk by this cloud of uncertainty that is regularly delivered over the future of the group. This is unnecessary.

There is a type of bootboy privatisation element in that one has to kick something into the private sector every month or so to be in Government. There is something people should know. We should look at the history of the hotel industry and this group, the amount of money which has been drawn down from Europe and from the Exchequer and invested in something which was clearly an investment in the sector and industry and which had good results. People were not investing in an asset which could be held for a while by Aer Rianta and then floated off into the private sector. That was not the intention behind that money which was spent on improving standards and training.

I said very clearly where my party stands in this matter – it is not a new position. I find it rather sad that we have to go back to this position again and again. I deplore a type of attrition I detect in the talks which are on offer in the amendment to the motion. The suggestion is that one can defeat everything by saying one's door is always open. The door is always open and the talks are always next week as long as one talks on certain terms. That is what the amendment says and why it is such an evasive disaster.

In all the circumstances, therefore, I have no hesitation saying that nobody in their right mind who is serious about any worker at any level in any Great Southern Hotel could possibly vote for the amendment. For those of us who believe a significant step is being taken, all I say is that I hope between now and the end of this debate we will see the hotel group securely where it belongs, with investment, security of employment, together and performing well and also within the State structure. We will have taken a very significant step away from the position which regards the State as being somehow inimical to anything which is successful. The State gave us the training which gave us the industry and the quality which has defined the Irish tourism industry. It seems criminal to yet again put it at risk.

Debate adjourned.
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