Vol. 560 No. 2
1 Mr. Deenihan asked the Minister for Arts, Sport and Tourism when the review group on the tourism industry, which he established, will have its first meeting; the main priorities of the group; when it will present its final report; and if he will make a statement on the matter. [2227/03]
The tourism policy review group, the membership of which has already been publicly announced, had its inaugural meeting on Tuesday last, 28 January 2003. In my address to the group, I indicated that I was pleased that such an eminent group of people had volunteered their services to help chart a new direction for Irish tourism. The group's main priorities will include an assessment of the performance and potential of the tourism sector, and the identification of the key elements of a strategy, both industry-led and Government-led, for the further sustainable development of tourism in Ireland.
The terms of reference for the review have been agreed and if the Deputy so wishes, I can arrange for a copy to be made available to him. As already outlined, in response to Parliamentary Question No. 51 of 20 November 2002, the terms of reference for this project have had to be carefully scoped, given the broad range of external influences on the development of tourism and in light of consultations with tourism industry representatives through the Irish Tourist Industry Confederation.
While my stated preference has been for an early completion date for its final report, I will be guided by the group whose members were appointed because of their broad mix of expertise and experience and who are best placed to decide how long they need to complete their task efficiently and effectively. In any event, I have requested that the group report to me with initial views by the end of April if at all possible.
As there is a major question about the competitiveness of Irish tourism, will the Minister ask the review group to look at this issue. Given the increase in VAT, Ireland now has one of the highest VAT rates on hotel products in Europe. The weakening of the American dollar vis-à-vis the euro by 20% over the past six months makes Ireland an expensive location for American tourists. The increase of 200% in insurance costs in some instances and the increase in local authority rates and charges means that Irish tourism is losing its competitiveness on a daily basis. Will the Minister ask the review group to look at Ireland's competitiveness, which is very important?
One of the issues the review group will examine will be the question of competitiveness. It is true that people purchasing Irish holidays abroad purchase them at rates which are relatively equivalent to other northern European destinations. The difficulty appears to be that when people arrive in this country they find certain items do not offer value for money. The recent Bord Fáilte survey established that many people felt food and drink did not offer value for money. These will be among the items addressed by the review group.
In view of the fact that a number of operators had entered into contractual arrangements prior to the budget and are now being forced to absorb the new VAT rate, will the Minister ask the Minister for Finance to introduce transitional arrangements so that the old VAT rate will apply to pre-contracted business? The weakening of the dollar and the fact that the industry will have to absorb the new VAT rate will put the tourism industry under a great deal of pressure.
I have asked the Minister for Finance to consider the question of transitional arrangements for the tourism sector in light of the fact that many people would have entered into contractual arrangements. On a previous occasion when the VAT rate was increased, transitional arrangements were made. On this occasion, however, the Minister for Finance has indicated that since the increase is relatively marginal at 1%, he could not justify transitional arrangements. I am not optimistic at this stage that he will change his mind. He will publish the Finance Bill soon and I am not optimistic in that regard.
When does the Minister expect the review group to report and will it consult the industry?
The review group, which comprises a wide variety of people from different backgrounds, carries with it a great deal of expertise. I anticipate they will have a great knowledge of the industry. However, the group will liaise with the Irish Tourist Industry Confederation and others involved in the industry and, where relevant, consultancies will be made available to the group.
It is important to point out that Ireland's tourism industry has increased by leaps and bounds in the past ten years. In 2001, for the first time ever, more than six million people visited Ireland. It is a fact that the recorded amount of revenue generated in the past year was of the order of €4 billion in foreign revenue and approximately €1.28 billion in domestic revenue, with 150,000 people involved in the industry. During the period in question there has been an investment between the public and private sector in building up the product of the order of €4.3 billion. In these circumstances the time is now ripe for us to consider where we are going with Irish tourism.
