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Dáil Éireann debate -
Tuesday, 2 Nov 1999

Vol. 509 No. 6

Adjournment Debate. - Great Southern Hotels Group.

I am very grateful for the opportunity of raising this issue on the Adjournment. The reason I raise this issue is the uncertainty which prevails in relation to the future of the Great Southern Hotels Group. The Great Southern Hotels Group is one of the great anchor points of the Irish tourism and hotel industries. I need not delay the House in talking about its important contribution over several decades and into the modern period. When one looks at those who are in senior positions in other parts of the hotel industry one finds that the training they received, be it at any grade from management to the porter who welcomes the tourist at the door, is due to a commitment to training which is the great contribution of the Great Southern Hotels Group.

I raise this matter because I believe it is nothing less than an ideological opposition which stands in the way of acceptance of a development plan for the group. I wish to put a number of questions to the Minister on this matter. If one is changing the existing arrangement and hiving off the Great Southern Hotels Group from Aer Rianta, one must ask what proportion of training is being carried by the private hotel sector in comparison to that being provided, for example, by the Great Southern Hotels Group. I suspect it is but a tiny percentage. Equally, one must take cognisance of the fact that to sell the group so as to maximise the capital yield for Aer Rianta is dismissive of the role the group plays in relation to the hotel industry and tourism sector. It is simply saying that the group, which was making a loss many years ago and which has been turned around and is now in profit, must be offered for sale so as to maximise the income of Aer Rianta.

The employees in the Great Southern Hotels Group were comprehensively insulted by a statement by a senior person in Aer Rianta not so long ago who suggested the State should not be involved in the business of making beds and serving food. The Great Southern Hotels Group is the major source of training. It is a flagship in the industry and there are models available that could have enabled the group to continue to make the contribution it has made and is making. For example, its existing revenues and accounts show that it has the capacity to borrow in its own right to provide for its future investment and expand the hotels and employment in them. Yet this is not being seriously considered as an option. At the moment it seems that in an atmosphere of uncertainty the only remaining issue is whether the group will be sold as a block or in bits and pieces.

It is also important that the Minister bears in mind that previous sales of component hotels within the Great Southern Hotels Group have been little less than scandalous. The price at which the hotels were sold has turned out to be a fraction of their value. When we look back we see that these hotels and their sites would have been invaluable assets for the hotel industry.

One must ask why the group is being offered for sale. Why is the group being broken up? Who will provide training if the group is sold off? Who will provide the quality of service which the Great Southern Hotels Group has provided? Why is a straight "No" being given to the option that the group could, from its own resources, fund its investment needs into the future and expand and create quality employment?

Another issue arises in relation to a matter which has been discussed among the staff in the different hotels and at the annual conference of the staff union, SIPTU. The SIPTU conference recently passed a motion asking for the hotels to be retained within public ownership.

Accepting that it wants to shed the group, why can Aer Rianta not be compensated from, perhaps, the National Treasury Management Agency, thus enabling the group to get on with the business of planning its future?

The Deputy's time has concluded.

For all these reasons – the group's historic contribution, its importance to training, its ability to provide a self-development model, the views of its workers, the contribution of its staff and its value, particularly in terms of its training contribution into the future – I plead with the Minister to ask his colleague to make sure that the option of a self-development model is made available to the Great Southern Hotels Group, which can be done by keeping it in public ownership, and that any ideological opposition to this is set aside in the best interests of Ireland and the workers in the Great Southern Hotels Group.

I thank Deputy Higgins for raising this important issue. As the House is aware, the board of Aer Rianta submitted a report to the Minister for Public Enterprise, Deputy O'Rourke, in April this year on the future strategic direction of the company. In that report, the board considered that the Great Southern Hotels Group is not a core activity in the context of its airport management operations and recommended exit from this non-core asset after full consultation with the relevant stakeholders.

The board of Aer Rianta has retained Arthur Andersen consultants to examine all the options for the future of the Great Southern Hotels Group. They have also appointed Mr. Phil Flynn to act as facilitator with the trade unions as part of the process. This examination, which involves extensive consultations with all the stakeholders, including the management, staff and trade unions, is expected to be completed shortly. The Minister will be examining recommendations very closely before a final decision is made.

The Minister for Public Enterprise fully recognises and acknowledges the high standing and reputation of the Great Southern Hotels Group and her main consideration is that she wants to find the right future for the group in a way that will also be right for the staff in terms of their employment and other rights, as well as for the Irish tourism industry.

Over the past few months the Minister has met and consulted with the staff of all the Great Southern Hotels and advised them that these would be her main considerations in any future decision affecting the hotel group. In the meantime, development of the hotel chain is ongoing and the group is operating successfully. A £10 million extension to the hotel at Dublin Airport is currently under way. This will provide 85 additional bedrooms together with lounge, restaurant, leisure facilities and meeting rooms. Planning permission has also been obtained by the group for a new 81 bedroom hotel at Cork Airport, at an estimated cost of £8.5 million with construction start-up planned before the end of this year. Ongoing investment in the other hotels in the group will total £2.5 million this year.

The Minister believes it is right and proper at this time to review the future strategic direction of the Great Southern Hotels Group, just as it is right and proper to review the future strategic direction of its parent company, Aer Rianta. Long-term strategic planning, which is what this process is all about, is best done when times are good rather than at times of crisis. Planning and decision making under pressure is not to be recommended and should be avoided if at all possible as it runs the risk of failing to take the best long-term strategic interests of the various stakeholders sufficiently into consideration.

As the Deputy will be aware, the Minister for Public Enterprise and the Minister for Finance have jointly appointed Warburg Dillon Read-AIB to advise and assist in the examination of Aer Rianta's proposals for its future strategic development. The advisers will also address as part of this work the principle of Aer Rianta's proposal to exit from the hotels activity. Only when the Minister has received their advice and the views of the board of Aer Rianta following the completion of its internal consultation process will she be in a position to report to Government with her recommendations in regard to the Great Southern Hotels Group.

The Minister for Public Enterprise is confident that any decisions that will be arrived at by Government. when she has put her recommendations to it, will lead to a full and promising future for the hotels of the Great Southern Hotels Group and for its staff, and that it will contribute to the further enhancement of the hotel and tourist sector in Ireland.

As is clear from the foregoing, far from failing to devise a development strategy for the Great Southern Hotels Group, the Minister has on the contrary been actively working on such a strategy in full consultation with all the stakeholders and with a view to securing a vibrant future for the hotels in the years ahead.

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