Vol. 535 No. 1
49 Mr. Higgins (Mayo) asked the Minister for Tourism, Sport and Recreation if he will outline details of the marketing campaign in North America to counter the effects of misleading information on the foot and mouth situation and the reduction in tourist numbers to date from North America; the number of cancellations to date; and if he will make a statement on the matter. [12076/01]
51 Mr. Higgins (Mayo) asked the Minister for Tourism, Sport and Recreation his policy regarding British tourists visiting here; and if he will make a statement on the matter. [12078/01]
52 Mrs. B. Moynihan-Cronin asked the Minister for Tourism, Sport and Recreation the latest information available to his Department regarding the implications of the foot and mouth precautions on the tourism market for summer 2001; the measures taken to date to assist the industry; if any additional measures are planned; and if he will make a statement on the matter. [12074/01]
I propose to take Questions Nos. 49, 51 and 52 together.
While official CSO figures for overseas visitor numbers and revenue earnings for this year are not yet available, I understand from Bord Fáilte that latest industry estimates put total losses in tourism earnings incurred through cancellations, and more particularly lost bookings since the onset of the foot and mouth crisis, at £225 million. This figure is made up of £175 million in respect of foreign earnings and £50 million in domestic business.
Without taking into account the beneficial impact of the measures which I will outline later to address the adverse impact of FMD on the industry, potential losses of out-of-State tourism revenue in 2001 could, according to Bord Fáilte estimates, be as high as £500 million, with additional losses in domestic earnings of the order of £140 million depending on market conditions and performance for the remainder of the year. I understand the loss of tourism earnings from the North American market are projected at 18% for March to August, 2001 based on advance bookings to date compared to the same period last year.
My Department and I have been working closely with Bord Fáilte and the Irish tourist industry confederation, ITIC, since the onset of the crisis to ameliorate the adverse impact on the tourism and hospitality industry. We have taken a range of measures to deal with the situation, including the following specific actions. We have encouraged the tourism and hospitality industry to support the national campaign to minimise the risks of a spread of FMD through the application of appropriate control measures and disinfectant procedures. These efforts have been publicly acknowledged as a mature and responsible act on the part of the industry for the greater common good. We have set up structured arrangements to ensure the views of the industry are taken on board, in particular when decisions are being made on the application and modification of FMD control measures. Myself and my Department are represented on the Government task force which has been convening daily, under the chairmanship of the Minister for Agriculture, Food and Rural Development, to review measures to prevent the spread of the disease. In addition, a separate high level tourism action group, under the chairmanship of the chief executive of Bord Fáilte, and including key representatives of the Irish Tourist Industry Confederation and my Department, has been established to monitor the FMD situation on a continuous basis. This group has been meeting twice weekly to actively manage issues which are affecting tourism business already booked and limit any medium to long-term damage to the industry's image and prospects overseas.
We have been pressing very strongly for a phased modification of the control measures and restrictions in so far as they affect tourism in line with the emerging risk situation. This action helped to bring about an easing of the restrictions on a range of events and activities in the tourism and sports areas in line with the advice of the technical expert group established by the Minister for Agriculture, Food and Rural Development. For example, the deferred St. Patrick's Festival has now been rescheduled for the weekend of 18 May. We have sought the phased reopening of the key State cultural and heritage attractions to allow a full and varied array of facilities to be available to our visitors. The majority of these attractions are now being reopened by the Department of Arts, Heritage, Gaeltacht and the Islands and Dúchas in line with advice from the technical expert group.
We are arranging through the Bord Fáilte tourism Ireland website, the associated call centres and other websites to ensure that there is regularly updated information available to visitors and the trade about major attractions and events which are open. We are issuing a clear message that Ireland is open for tourism business and that subject to the taking of appropriate precautions, Ireland remains a welcoming destination for international visitors, including visitors from Britain. In his remarks to independent British travel agents at their annual conference in Killarney last Friday, the Taoiseach made it abundantly clear that visitors were welcome and that Ireland was open for business.
In line with the advice from the Department of Agriculture, Food and Rural Development, intending visitors from foot and mouth disease infected countries, who had contact with susceptible animals, or agricultural land, or were in the control area, are discouraged.
We are pressing for an easing of the restrictions on the movement of people within Ireland in line with the advice of technical expert group, particularly to help the accommodation sector. This includes strong advice to the commercial, business and the State sectors not to cancel or postpone seminars, conferences, meetings or training programmes. We are successfully securing the lifting of the ban on angling. Under the new guidelines, angling and sea angling, which does not involve access across certain agricultural land is permitted.
We are appealing to the banks, the financial institutions and the Revenue Commissioners to be as sympathetic as possible towards any tourism business which is experiencing temporary cash flow difficulties arising from the foot and mouth disease crisis. The Irish Bankers Federation, on 30 March, indicated they were committed to giving careful and sympathetic consideration to requests for support from those business customers with financial difficulties. The Department of Finance confirmed that, regarding individual businesses' cash flow problems, the Revenue Commissioners, as part of normal arrangements, will look sympathetically at payment arrangements on a case by case basis.
We are preparing and presenting a major tourism marketing reassurance campaign, the initial phase of which is under way with special media advertising in all key markets and we are preparing trade reassurance measures and promotional visits. Details of it, including the actions envisaged in key markets, are available directly from Bord Fáilte. The campaign has been designed in consultation with the industry. Last week, key representatives of two important groups, the American Society of Travel Agents and the Independent Travel Agents, were here. I have just returned from an intensive week long promotional visit to four US cities, during which I met trade representatives and gave many interviews. Such visits to other key markets in the near future are planned.
These actions are incremental to the largest annual tourism marketing programme for 2001, involving expenditure by the tourism industry and Bord Fáilte of £100 million, of which approximately £35 million is Exchequer funding.
My Department and Bord Fáilte are keeping the situation under review in order to make further appropriate adjustments, in consultation with the industry, to planned marketing and promotional activities as matters evolve. Bord Fáilte is mounting an aggressive marketing campaign in our major markets aimed at maximising advance bookings and confirmation for the coming peak season. Our shared objective is to ensure a good performance throughout 2001 and that no unnecessary medium to long-term damage is done to the tourism industry, which is so economically important.
This industry dealt successfully with past crises, including the fallout from the Gulf War and the Northern Ireland troubles. It is resilient and strong, and with the help of the outlined measures, will overcome this current setback and meet the challenging average annual growth targets set under the national development plan.
(Mayo): Does the Minister not accept that we have lost the PR battle in the United States? Since one million tourists come from the United States, the message sent out that they were not welcome for St. Patrick's Day, that the country was closed, that they should stay at home, is not retrievable. I see from editorials and other newspaper articles that the impression in the United States is that we have something akin to a nuclear holocaust, the birds are falling from the trees, we are locked in our homes, and that the disease affects human beings. It is impossible now to retrieve a most lucrative market, which filled beds, restaurants, pubs, lounges and buses. We have lost the PR battle and this leaves empty beds, lounges, pubs, buses and restaurants. Does he not accept that the figure he gives of a 15% to 18% drop is extremely conservative in view of the reality in the market place?
I disagree. The Deputy should think of what the situation would have been if we had foot and mouth disease. Not only would the agricultural and food industries be wiped out but tourism also. I agree with the restrictions imposed by the Department of Agriculture, Food and Rural Development, and the national effort to contain the disease. We won the battle. There was one case in the Republic and three in the North. We can give ourselves credit for what we achieved.
The cancellation of the St. Patrick's Day festival sent a message across the world, particularly to the United States, that there was something wrong here, but, even with hindsight, the expert group agreed that bringing 1.5 million people on to Dublin's streets was inadvisable. Unfortunately, that was the message sent out.
I returned from there yesterday and the picture is different. There is a greater awareness and understanding of what foot and mouth disease is. It is no longer on the television screens. We had 36 separate interviews in the audio-visual and print media. Numbers will be down in June, July and August but the autumn will be good, and next year will be a bumper one. There were many cancellations but others indicated that they want their deposits to be held until the autumn or next year.
We have the potential estimates of the worst case scenario. A better message was sent to the United States and the losses will not be as high as indicated. I have a better, more confident picture from being in the United States.
(Mayo): Does the Minister accept that there was no threat from the United States?
Absolutely.
(Mayo): There was no threat from that million people because the disease is not there. There was no problem in inviting American tourists here, the majority of whom do not visit farms. There should have been a different marketing approach to the British market, which gives us 3.4 million people, and the United States, which gives us one million. Does the Minister accept that the mixed message led to the situation where – I hope I am wrong – there will be a greater drop in revenue from the United States than he predicts?
Bord Fáilte always had a substantial marketing budget. What is the additional budget to provide the extra dynamism to penetrate the American market and reverse false perceptions? What are the indications from Aer Lingus, the main carrier from the United States, on its market share drop, in March and April, for example? What is its prognosis for market development for the rest of the season?
The horrifying pictures of the pyres on Sky Television and CNN in the United States were a major factor. People from the United States were not ever at risk. I have heard the stories the Deputy mentioned, but we must attempt to recover. For the past month or more we were engaged in a salvage operation. The United States market may not be as bad as was anticipated.
Bord Fáilte and the industry required £10 million extra. We have £8 million, of which £2.7 million will be spent in the USA. Next week, a major television campaign starts fronted by Martin Sheen. Other Irish people have put their backs to the wheel also. Confidence in the USA is growing. The marketing campaign will be monitored and in two months, if required, an additional £2 million will be added, making up the £10 million.
Aer Lingus is under pressure. Some estimates are that business might be down by 20%. I met Aer Lingus officials in the US who indicated they expect their figures will recover. Thankfully, they are offering very attractive flights in the US, some of which are $200 less than the normal cost. I saw advertisements in the newspapers for flights costing $569 from the west coast and for $299 from New York. Therefore, Aer Lingus is battling, and while its current estimate for loss of business is 20%, it hopes to recover that loss by the end of the year.
We cannot have it both ways. We had a fight on our hands in dealing with foot and mouth and have no regrets on how we handled it. There was always a problem regarding the definition of the countryside. To people in the EU, the UK and the US, the countryside meant everywhere outside Dublin. I accept we had a problem getting the message across. It does not mean people cannot go to Letterkenny, Kilkenny, Carlow, Galway or any other such place. Rather we meant that people should not visit farms. Americans make up their own minds and are very health conscious. Many of them travel in the later part of their lives and are therefore more health conscious.
I accept the horrifying pictures caused much damage, but we did our best to assure people we had no pyres here. I hope the message will get across. If the industry comes on board and provides attractive packages, as Aer Lingus is doing, much of the business can be salvaged.
We must be realistic in saying the foot and mouth scare has caused devastation in the tourism industry. Because it is just a blip on the economic horizon in Dublin does not mean it is just a blip in the rest of the country. Figures for my town show a decrease of about 50% in visitor numbers, which translates into a reduction of £150 million this year. If a business in this city lost that amount of money in one year all the stops would be pulled out. I understand some work has been done but we must have a dose of reality and accept that the industry is almost lost for this year.
Regarding the American market, the booking rate of one major American tourism company is down from a normal 1,300 per week to 120 per week. Has the additional marketing money which has been put in place since last March resulted in an up-turn in the American and British markets? If not, what should we do? We must rescue the industry. The Minister opened a major hotel in Killarney last week, and I wonder how the owners will recoup the £4 million they spent from their own pockets. The county could lose about 1,500 jobs. It is very serious and we must treat it as such.
Many proposals have been put to the Minister by the tourism industry and I ask him to treat the issue seriously and advise me of the benefit of the additional marketing funding and if there has been an overturn in cancellations. I think there has been no such overturn.
There was a large conference in Killarney last week and those who attended raved about the area, so I think we have already gone part of the way. We will not see the full result of the money which has been invested in marketing until later in the year. However, I am confident given the new message and the greater awareness in the US, the attractive packages being offered and advertised in newspapers and the additional £2.7 million being invested in the American market. We will take a hit in June, July and August, but I think we can recover towards the latter part of the year.
I have figures from all the different companies, which are down by between 20% and 50%, depending on the sector. The coach touring business has been particularly badly affected. The tourism industry is worth between £3.5 billion and £4 billion to the economy and it is a success story that we have lost only between £200 million and £225 million. The tourism industry was fully behind the restrictions and precautions and fully played its part. It was always conscious there would be a loss. If we can restrict the loss to these figures, and hopefully see an upsurge towards the latter part of the year, we will not be doing too badly.
