I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
–notes the challenges facing the tourism industry in 2002 arising from the aftermath of the tragic events of the 11th September last in the US;
–acknowledges the successful start-up of Tourism Ireland Ltd. and the substantial levels of Exchequer funding being provided this year for the international marketing of the island of Ireland as a tourist destination, with a budget of close to €50 million in 2002, of which €27 million is for programme marketing spend;
–acknowledges also the substantial levels of Exchequer funding being provided this year to Bord Fáilte, which has a budget of over €50 million in 2002, of which some €25 million is being deployed for marketing-related activity; and
–commends the Government for the series of actions proposed in An Agreed Programme for Government which recognises that the tourism industry will continue to be a vital industry in the Irish economy and that it requires sustained support and investment in the coming years."
I wish to share my time with Deputy Cassidy. I congratulate Deputy O'Hanlon on his elevation to the position of Ceann Comhairle and wish him every possible success in that position. I congratulate and wish well Deputies Deenihan and Lynch on their promotion to the position of senior spokespersons in their respective parties in the areas of arts, sport and tourism and look forward to a constructive working relationship with them. Knowing their record in the House, I have no doubt that this will be the case.
I thank the Deputies who contributed to the debate so far. In particular, I wish Deputies O'Dowd, English and Breen, who are all newly elected to this House, every possible success and happiness during their time here. It would be remiss of me if I did not welcome back Cork's Deputy Lynch to the House.
I welcome the opportunity this evening to address the House on the current circumstances in the Irish tourism sector. Coming as I do from Kerry, which is arguably the home of Irish tourism, I believe I have a good appreciation of the importance of the industry to the national and local economy. In my first week in office as Minister for Arts, Sport and Tourism, I took the initiative of meeting the chief executives of the key tourism State agencies to get an initial briefing on the most critical issues facing the sector and the current state of the tourism season. Later this week, I will meet a high level delegation from the Irish Tourist Industry Confederation – the key industry representative group – to hear at first hand its assessment of the situation and to see what the Government can usefully do to help. My intention is to be a listening Minister and to have an open door policy in respect of the industry and the main Opposition spokespersons and Members of this House, building on the partnership approach which was successfully developed by my predecessors.
It is useful to reflect on the scale and success of the development of Irish tourism over the past decade. Up to last year, we had ten successive years of uninterrupted growth in which overseas visitor numbers doubled to over six million and foreign revenue earnings increased threefold to almost €4 billion. International comparisons showed us to be one of the strongest growing European tourist destinations. The industry flourished and investment reached unprecedented heights with the support of Exchequer and EU funding.
Today the industry supports in the region of 145,000 jobs and makes a major contribution to our economy. My objective as Minister, reflecting the Agreed Programme for Government, is to help to ensure that tourism will continue to be a vital industry and that it gets the necessary sustained support and investment in the coming years.
Last year the industry faced its first setback in many years, with the double blow of the foot and mouth crisis in the spring and the aftermath of the tragic events of 11 September in the US. However, although there were varying fortunes within and between sectors and regions, the hard evidence is that we coped well. This was due to a combination of resolute actions at industry and Government levels. While official CSO figures for 2001 show that the number of overseas visitors to Ireland fell by 5% in comparison with 2000, they were still at an extremely healthy level of over six million. Even more remarkable is the fact that despite this first decline in numbers in over ten years, total foreign revenue earnings from all overseas visits in 2001 actually increased by nearly 8% to €3.96 billion. In addition, domestic holiday business remained buoyant last year, with expenditure rising by 16% according to Bord Fáilte figures. Contrast this with the circumstances in Britain, where British Tourist Authority figures indicate that there was a 7% decline in overseas visitor numbers and a drop of 14% in revenue compared to 2000.
While evidence from a CERT employment survey shows there was a marginal reduction in permanent employment in Irish tourism, recruitment of skilled staff remains a continuing challenge for the sector, with evidence of a continuing interest in recruiting labour from third countries. There was little hard evidence of major permanent job losses or closures in 2001, although margins were undoubtedly under pressure in many cases.
As official CSO figures are not yet available for tourism performance in 2002, it is very difficult at this stage to predict the outcome of this year's season. While air and sea passenger movements are up on last year, the indications are that outbound business is more buoyant than inbound business. Recent qualitative industry surveys by Bord Fáilte and CERT show a mixed picture, with equal numbers of respondents indicating higher and lower levels of business than last year.
Tourism Ireland believes that the first part of the year was reasonably good with a good response from the British market, which has been the major focus of its marketing activity. The German market is soft for outward travel generally, but France and the southern continental destinations have produced a good response. The US market continues to be a challenge, with the pace of recovery slower than was hoped. It is of interest that US Airlines is reporting that its peak season is generally slacker than anticipated so that Ireland will not be the only country experiencing continuing difficulties in respect of the US market. It cannot be ruled out that the recent reversal in US psychology, the drop in the value of its currency and its financial markets and the perception of its economic prospects may also impact on US visitor numbers.
There are indications that the very strong performance in the domestic market towards the latter part of 2001 has continued into 2002 and this has been beneficial to many businesses, especially hotels. Tourism operators will have to continue to offer competitive prices and good value if they are to retain this market. It is a matter of concern that recent price surveys indicate a level of price inflation in the hospitality sector which is considerably above the national average.
It may well be that the World Cup will have an impact on travel trends this year, especially in June. It does seem that there has been some softening in the British market in the past three to four weeks and some commentators have linked this to the World Cup. The combination of poor weather and the World Cup may also have had an adverse impact on domestic tourism. It is clear too that all major markets have witnessed a marked shortening of the booking period, which has created an ongoing and understandable sense of anxiety on the part of the industry, and has made it extremely difficult to call the season.
A much shorter booking horizon combined with overall softness in the US market meant that the coach tour business has taken a hit and this is borne out by some general operator surveys emerging from Bord Fáilte and Shannon Development. This may impact, in particular, on destinations such as Killarney, Blarney and Connemara, which have a traditional dependence on coach business. However, it is not clear whether the decline in the escorted coach tour business reflects a short-term reaction to geopolitical uncertainty and economic softness in the US market or represents the acceleration of a fundamental long-term trend towards more independent travel, driven in particular by the Internet. If the latter is the case, then it will be a major challenge for those resorts and businesses which have been traditionally dependent on the coach tour phenomenon to re-orient themselves to deal with possible new market realities.
This year has seen the largest ever budget deployed for the international marketing of the island of Ireland. Tourism Ireland Limited, which was successfully launched towards the end of last year, has a total budget of €50 million this year, of which €27 million represents direct programme spend. This is supplemented by substantial budgets for regional and product marketing by Bord Fáilte of the order of €25 million with special incentives in the areas of sports tourism and a new budget for festivals and cultural events. Tourism Ireland, in close consultation with the tourism industry through the tourism marketing partnership structure, took a strategic decision to front load its marketing spend for 2002. While this means that our international advertising campaigns are now virtually complete, the benefits of our marketing efforts earlier this year are still flowing and general promotional work will continue up to the end of the year.
I am aware that the tourism industry, principally through ITIC, has been pressing for additional State funding for marketing this year. Given the high level of our existing tourism spend relative to comparable destinations and the general pressure on the public finances, my Department has not been convinced to date of the need for incremental marketing funding. However, certain expenditure within the existing tourism budget has already been redeployed. This has allowed the advertising programmes in certain key territories to be extended somewhat. I understand there may be some limited scope for further redeployment of funds to front line marketing activity and I will consider the options in consultation with the State agencies and the industry later this week. Those who argue for more funds for Tourism Ireland must be absolutely clear about how much can be usefully spent and when, where and on what they want to spend it. A clear order of priorities must be set out. There would seem, for instance, to be little sense in spending money now to try to attract additional US peak season business.
While I accept that urgent decisions are required, it is equally important that the decisions taken are the right ones. It is critical to get the best advice from the industry and the State tourism agencies before deciding if such extra activity would be productive and cost effective. Consultation and agreement with the Northern authorities, who have joint responsibility for the operation and financing of Tourism Ireland, would also be desirable. I would also like to explore with the industry the options for its making a direct financial contribution to any additional front line marketing activity this year, as was the case with the recent British advertising campaign. While marketing is a key element of Government policy for the tourism sector, I am convinced that a much broader strategy is required to underpin the medium-term and long-term growth of the sector. As Minister for Arts, Sport and Tourism I will pursue such a policy on the basis of the actions set out in the Agreed Programme for Government. I take the opportunity this evening of outlining the principal actions proposed.
We will broaden our source markets so that we are not over-reliant on any one market and, in particular, seek to increase our share of the continental European market. Tourism Brand Ireland was redeveloped last year at a cost to the Exchequer of some €5 million and is being successfully rolled out this year by Tourism Ireland. Brand presence will be maintained in all key markets. While a strong effort was maintained this year in the US market, bearing in mind the continuing difficulties in that market there will be a particular focus on developing business from the British and mainland European markets.
The Department has been pressing Tourism Ireland and Bord Fáilte for some time about our poor relative performance in terms of attracting holiday visitors from the key continental European markets, particularly Germany and France. The German outbound market – the largest in the world – has been soft in recent years due to general economic difficulties but we must reposition ourselves there and get more business. Tourism Ireland is due to undertake a fundamental reappraisal of all overseas markets over the coming year and I will seek to accelerate this review in light of the commitment in the Programme for Government.
We will foster expansion and competition on air and sea routes. The maintenance of competitive access links by air and sea to Ireland is critical to future success in tourism. We are particularly well served by the levels of investment in recent years in sea access. We have seen the emergence of a high quality and competitive route network across the Irish Sea and to France. My Department will work closely with the new Department of Transport to safeguard as much of the air access route infrastructure as possible so that as traveller confidence is restored and as the recovery comes we will be best placed to avail of it. The extension by Aer Rianta of its incentive scheme for new routes to Dublin, Cork and Shannon airports is encouraging and I welcome the new air services for 2002 which will go some way to compensating for the loss of services arising from the shake-out of the airline sector that has occurred since the events of 11 September.
I also very much support the decision for Aer Rianta to proceed immediately with the provision of a rapid turna-round facility at Dublin Airport to meet the specific needs of carriers operating at the lower-fares end of the market. My colleague, the Minister for Transport, Deputy Brennan, will closely monitor this project to ensure that Aer Rianta provides the facility at the lowest possible cost, taking full account of the needs of the low fares carriers, and has the facility operational at the earliest possible date. I will also ask Tourism Ireland to work closely with the air carriers and with Aer Rianta to ensure greater co-ordination and co-operation in marketing activities.
We will support Tourism Ireland Limited in its work of promoting the whole island of Ireland as a tourist destination. The agreement with our Northern counterparts under the Good Friday Agreement is to sustain an annual programme marketing budget in the order of €27 million for Tourism Ireland. Our immediate priorities are to establish the new company in terms of personnel, operations and overseas office network and to establish its credibility with the industry at home and overseas. The company has a strong, industry-orientated board with which I hope to work closely. The new North-South arrangements have already delivered incremental funding to the marketing effort, with the largest ever all-island destination marketing campaign budget of €27 million for this year financed on a South-North 2:1 basis.
We will complete the task of creating a new national tourism development authority which will complement the work of Tourism Ireland Limited. Following high level consultations with Bord Fáilte and CERT, the previous Government last November approved the creation of a national tourism development authority to promote the development of sustainable tourist facilities and services, including the promotion of training, human resources and marketing skills. In January, my predecessor established an implementation group to report back to him with an implementation plan for the establishment of the new body. The group consulted widely, within the time available, with representatives of the tourism industry, staff representatives in both Bord Fáilte and CERT, the regional tourism authorities and Tourism Ireland Limited and produced its report in April.
The report sets out a clear vision, mission statement and top organisational structure for the new body. It outlines a number of clear steps to be taken so that the new body will be in place for the 2003 tourism season. These include the appointment of an interim board, the early appointment of a chief executive officer-designate, liaison arrangements with staff and links with other bodies. I am making early arrangements for the appointment of an interim board and have asked my Department to move forward with the establishment of the new body as a matter of priority. The draft legislation to give legal effect to the new body is currently with the Office of the Parliamentary Counsel for drafting and I hope to bring it through this House and the Seanad at the earliest possible date.
We will ensure the construction of a state of the art national conference centre and promote Ireland as a venue for international conference business. Much preparatory and planning work has already been carried out on the case for a dedicated national conference centre, including commissioning a major consultancy review last year on maximising Ireland's position in the international conference market. I have asked my Department to examine the options to deliver on the Government's commitment with a view to presenting the position to Government later this year.
We will put the maintenance of standards and services at the top of the tourism agenda. Bord Fáilte's visitor attitude surveys show that Ireland is highly rated by visitors, surpassing the expectations of one third of visitors in 2001 when only 4% expressed disappointment with their holiday experience. However, there are growing indications that standards and service may be slipping and that the quality of the Irish welcome may be under threat.
CERT has initiated a number of programmes, including the Best Practice Programme, Ireland's Best Service Excellence Programme and Award and the RETAIN initiative to assist tourism and hospitality businesses to undergo the process of moving towards best practice and achieving the highest standards of excellence. Earlier today I launched a new national awards scheme for Bord Fáilte which will recognise individual excellence in this area. My intention is to ensure that due regard is given in establishing the National Tourism Development Authority to the maintenance of standards and quality assurance as envisaged in the report of the implementation group.
We will continue to support the bed and breakfast and small accommodation sector through specific marketing initiatives. Bord Fáilte already provides a programme of supports for small and medium sized enterprises, including a special initiative for bed and breakfasts, farmhouses and small hotels. Co-operative marketing opportunities through product marketing groups will be encouraged as the most effective means of accessing overseas markets in a cost effective way.
We will encourage year-round activity-based and special interest tourism. This objective will be pursued principally through the new tourism product development scheme which was launched in January 2002. This includes three principal categories of projects: the development of major attractors and clusters of attractors; the development of special interest pursuits; and tourism environmental management. Independent product management boards have recently been appointed to assess projects under this scheme which have been submitted following an open call for applications earlier this year.
We will ensure that local authorities take account of the needs of the tourism industry in the provision of infrastructure. My Department will use every opportunity available to it to press the case for ensuring that the needs of tourism are taken into account in determining the infrastructural needs and priorities of the local authorities.
We will promote sensitive development of tourism areas and encourage environmental best practice among tourism providers. Projects selected for support under the tourism product development scheme will have to demonstrate that they have taken account of the best practice that emerged from the Operational Programme for Tourism, 1994-1999, pilot initiative on tourism and the environment. In addition, we will ensure that due regard is given in establishing the National Tourism Development Authority to integrating a strong environmental focus with its product development functions, as envisaged in the report of the implementation group.
I have set out my initial assessment of this year's tourism season and have outlined the general policy objectives which will guide my work over the coming years in line with the Agreed Programme for Government. I intend consulting widely with the industry and the tourism State agencies to guide me further in my work.
With regard to the motion, I accept that the current indications are that this is a difficult season. However, I believe from my initial soundings – and this view is shared by the tourism State agencies – that the degree of difficulty varies from region to region and from sector to sector. We will spend close to €110 million in Exchequer funding this year in support of the tourism industry. I will urgently review the situation to see what further steps can be taken to help the industry to meet the unique challenges it faces this year.
I look forward to the debate on this motion and the contributions by the various speakers. I commend the Government amendment to the House.