Jim O'Keeffe
Question:89 Mr. J. O'Keeffe asked the Minister for Arts, Sport and Tourism his views on whether Ireland is now too expensive as a tourist destination; and his proposals in this regard. [19053/02]
Written Answers. - Tourism Industry.
Tom Hayes
Question:92 Mr. Hayes asked the Minister for Arts, Sport and Tourism if, in view of his recent statements regarding the competitiveness of tourism, he plans to put in place initiatives to improve the competitiveness of tourism; and if he will make a statement on the matter. [19130/02]
Tom Hayes
Question:103 Mr. Hayes asked the Minister for Arts, Sport and Tourism his plans to establish a tourism review group similar to the group established to provide a strategy for industry in 1991 under Mr. Culliton, in view of the recent report by ITIC; and if he will make a statement on the matter. [29129/02]
I propose to take Questions Nos. 89, 92 and 103 together.
I welcome the publication last week of the report by the Irish Tourist Industry Confederation, ITIC, on the impact of tourism on the Irish economy. The report is a comprehensive and analytical study of a sector that has enjoyed tremendous success and growth over the last decade but has recently come upon more difficult and challenging times. I look forward to having an early meeting with ITIC to discuss the policy implications of the report.
The report highlights in an authoritative way the importance of the tourism sector to the Irish economy. The sector now generates nearly €4 billion in annual foreign revenue earnings and supports 150,000 jobs. The report also underlines the contribution the sector makes to balanced regional development.
I welcome, in particular, the emphasis in the report on maintaining industry competitiveness and service quality levels. This reflects my recently expressed concerns about the importance of delivering value for money for the Irish tourism product.
There is also evidence from recent visitor attitude surveys conducted by Bord Fáilte that there is a deterioration in perceptions of value for money among visitors to Ireland, particularly from mainland Europe. Visitor concern with price levels here appears to relate to the cost of goods and services consumed by them when they arrive here rather than the price of holiday offers, access or accommodation. There is simply no refuting the fact that inflation rates in the restaurants, hotels and licensed premises sector and in the recreation and culture category are running very considerably ahead of national figures.
While Government and its agencies have a role in supporting the further development of the sector, it is the tourism industry itself that plays the central role in keeping prices in check. In these more challenging times the industry must do all in its power to control costs, improve productivity, better manage its human resources and utilise modern technologies to best advantage.
The Government will continue to play its part in supporting the industry through a range of programmes and measures in the product development, marketing, training and human resource areas. I will look, in particular, to the new National Tourism Development Authority – combining the current functions currently exercised by Bord Fáilte and CERT – to bring forward new thinking to help the tourism sector to confront the new challenges it faces. In this context, the ITIC report offers some useful guidelines which will be taken into account.
The more modest growth rates in the economy anticipated over the next few years should reinforce downward pressure on prices. The Government will continue to pursue appropriate macroeconomic policies that serve to reinforce a favourable business environment. In this regard, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, has recently announced concerted Government action to address insurance costs.
I am aware of the contention of many of those working in the tourism industry that indirect taxation may be putting upward pressure on prices. Having said that, our VAT rates on tourism services and our excise duties are not out of line with those obtaining in northern European countries. The reality is that the southern European sun destinations that charge lower rates are not in direct competition with Ireland as a tourist destination.
Much of the debate in Ireland on tourism prices this year has been emotive and anecdotal. There is no doubt that Ireland continues to offer excellent value for money as a tourism destination when account is taken of service and quality. Ireland is not a low-cost mass tourism destination. However, we must be vigilant in ensuring that our price competitiveness is not eroded to enable the sector to respond vigorously and successfully to the changing dynamic of the market-place.
As I have already mentioned, I welcome the publication of the ITIC report as an important contribution to an informed debate on the future direction of the tourism sector, which I intend to promote. Resolute action on the part of the tourism industry, in partnership with the Government, will do much to safeguard the future prospects of a sector that is so important in economic terms.
I will be visiting the United States this week to support Tourism Ireland's drive to promote Ireland as an attractive and value-driven tourism destination.
Question No. 90 answered with Question No. 83.