National Tourism Development Authority Bill 2002 [ Seanad ] : Second Stage.

I move: "That the Bill be now read a Second Time."

I am very pleased to bring this Bill before the Dáil. The Bill was initiated in the Seanad where we had a useful debate. The Bill's sole purpose is to provide a statutory basis for a new national tourism development authority. When the authority is established, Bord Fáilte Éireann and CERT will be dissolved and their functions transferred to the new body. The Bill also provides that certain provisions of the Tourist Traffic Acts will be repealed to take account of the provisions of this Bill.

The Bill is concerned with the establishment of a major tourism development agency. I wish to make it clear at the outset that the Bill is a tightly focused one. It is not about setting new parameters for tourism policy. As the House will be aware, I have launched a comprehensive review of our national tourism policy. The review group, which I appointed to carry out this exercise, has begun its work. It had its inaugural meeting on 28 January last. The review will tackle some of the key issues facing 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 continued development of tourism in Ireland. While I expect to get the group's final report by summer, I have asked the group to report to me, with initial views, by the end of April, if possible.

We have embarked on a major review of tourism policy. With this Bill, we are setting up a major new tourism development agency. We have recently set in place a new structure for international tourism marketing. Why are we doing this? Tourism, which is one of our major economic sectors, has reached a critical point in its development.

Irish tourism has come a long way over the past 15 years. Tourism generates about €4 billion in foreign earnings and about €1.2 billion from domestic tourism. Recent economic studies suggest that it accounts for about 5% of annual GNP. Tourism supports about one in every 12 jobs in the economy. Over the past two years, Irish tourism has had to face a number of serious chal lenges. In 2001, its pattern of unbroken growth was disrupted. Last year, 2002, was a very challenging year but the projected outcome, with a return to modest growth, is encouraging. We certainly did not experience the doomsday scenario predicted by many commentators.

As for 2003, it is very early to make predictions particularly given the late booking pattern, which has been an increasing trend in recent years, and the uncertain situation in the Gulf. Nevertheless, I understand that advance bookings are good, with a healthy trend in the US fuelled by Tourism Ireland's kick-start campaign last December. This situation could change significantly were there to be an outbreak of hostilities.

The crises which we have faced over the past two years have accelerated certain changes which were already happening in the marketplace. They have also thrown into sharper focus some important issues around quality and value for money. The challenges now facing the industry, together with significant institutional changes arising from the Good Friday Agreement, are driving reform of the institutional architecture which the State uses to support tourism development. The Bill before the House is a vital part of that reform package.

Before we have a general look at the contents of the Bill, it might be useful to look at the current national State agencies which are dedicated to supporting tourism. The three agencies are; Tourism Ireland Limited, Bord Fáilte Éireann and CERT.

Tourism Ireland Limited is a publicly-owned, limited company established jointly by Bord Fáilte and the Northern Ireland Tourist Board, commonly known as NITB. It was incorporated in December 2000. Its board is drawn mainly from its founding agencies, Bord Fáilte and NITB, and the tourism industry North and South. Its purpose is to market the island of Ireland as a tourism destination.

Tourism was identified as an area of co-operation under the Good Friday Agreement. Tourism Ireland Limited was established as an expression of that co-operation. It has now completed its first 12 months with full operational responsibility for the international marketing of the island of Ireland. In the North, Tourism Ireland falls under the aegis of the Department of Enterprise, Trade and Investment, while here it falls under the aegis of my Department, the Department of Arts, Sport and Tourism.

Tourism Ireland has taken over a number of the functions previously carried out by Bord Fáilte. It is responsible for the international marketing function. That includes responsibility for the ownership and management of tourism brand Ireland, strategic all-island destination marketing in all markets outside the island of Ireland and responsibility for the entire overseas office network. Tourism Ireland also delivers product-regional marketing programmes on behalf of Bord Fáilte and NITB in international markets. Bord Fáilte and NITB retain responsibility in relation to tourism product development. Tourism Ireland's head office is in Dublin. It has a regional office in Coleraine and it has offices in our major overseas markets, Britain, France, Germany and the USA with an overall staff complement of about 150 people.

Tourism Ireland has established a number of tourism marketing partnerships in the Republic, the North and key markets. These partnerships, which include representatives of the tourism industry, are a valuable mechanism through which the tourism industry itself can directly influence and give feedback on Tourism Ireland's strategies and marketing plans. Tourism Ireland took over operational responsibility for the international marketing of the island of Ireland as a tourism destination less than three months after September 11. It has been a baptism of fire but the projected outturn for 2002 shows that it has done a good job in helping to maintain a high level of business and, indeed, some modest growth in the face of very difficult circumstances.

For Irish people, Bord Fáilte Éireann has, of course, been synonymous with tourism. It has for decades been the State's primary tourism agency. It has 130 employees and its head office is in Dublin. Following the establishment of Tourism Ireland Limited, Bord Fáilte will retain responsibility for product development; marketing of domestic tourism on the island of Ireland; research and strategic planning; niche-specialist product marketing and promotions; regional marketing; implementation of specific initiatives such as the sports tourism initiative; statutory functions for the registration-grading of certain tourist accommodation; co-ordination of activities of the regional tourism authorities; and tourism and the environment.

These functions mainly relate to providing a range of supports to the tourism industry, including those concerned with building business capability, improving the quality of product which the industry offers and enhancing its competitiveness.

In 1994, there was a major review of the operations of Bord Fáilte. The outcome of that review was a decision that the primary focus of Bord Fáilte should be on international marketing. Bord Fáilte was re-focused accordingly. The result was a greater efficacy in our international tourism marketing which has paid handsome dividends.

The 1994 review recommended that matters extraneous to the international marketing function were to receive less attention. However, one consequence of that re-focusing of Bord Fáilte's operations was that a decreasing portion of its staff and resources have been devoted to other areas like, for example, product development and the environment. We need to reverse that trend. We need to focus, once again, on some of those areas in order to help preserve unique elements of the Irish tourism experience. We have shown that we can get the people here but we also need to look again at what happens when they get here.

Because Bord Fáilte has been the premier tourism agency over the past 50 years, the major element of the Tourist Traffic Acts is concerned, in one way or another, with its functions or those of its predecessors. The Acts do not mention the other main agencies, Tourism Ireland and CERT.

C.E.R.T. Limited is the State's national tourism training agency. It was established, as a company limited by guarantee in 1963. CERT's head office is in Dublin, it has some 90 employees and has a number of training centres around the country. At present, CERT provides education, recruitment and training services for the tourism industry. As the industry has evolved, CERT has moved in the direction of a wider business development role. It helps to build industry capability by focusing on human resource management and improving cost competitiveness.

Rapid economic growth and record growth in tourism has created pressure on labour supply for the tourism industry. This has been a major focus for CERT. The focus has been on attracting and retaining school leavers, on adults returning to work and on skills development for workers. These services are delivered through development, provision and design of a range of education and training programmes to meet industry needs.

As far as industry competitiveness is concerned, the focus has been on enhancing productivity and performance, benchmarked against best international practice. The competitiveness of our tourism product has been the object of much discussion of late. The focus on competitiveness has been heightened by the price transparency associated with the euro. It is important, however, to remember that competitiveness is not just about price. It is about value. We are not a cheap destination but we need to ensure that we deliver value.

Any enterprise that is experiencing rising costs and pressure on margins has to take a fresh, hard look at how it is doing its business. It has to see how it can make better and more efficient use of its staff and resources. Business consultants tell us that, in areas like labour, energy and purchasing there can be significant scope for greater efficiencies. CERT has developed a range of experience and programmes to help businesses in this regard and I hope the new authority will work even more closely with businesses to improve efficiency and effectiveness.

In addition to the national tourism agencies, we have also a regional tourism structure. Our six regional tourism authorities continue to operate under the aegis of Bord Fáilte while Shannon Development, which is responsible for tourism in the mid-west, is an independent State agency. Once we have bedded down the National Tourism Development Authority, we will then look at the regional issues. The Bill before the House confines itself to national structures.

Fundamental changes have occurred in the nature of the tourism industry both globally and in Ireland over the past decade and more. In the context of these changes there has, for example, been a growing realisation by the Irish tourism industry that there are other issues which are more important for the industry's future than just visitor numbers.

Yield, regional and seasonal distribution and access are key issues on one side of the equation. On the other side of the equation, we have the quality, range and competitiveness of the facilities and products that the tourism industry in Ireland offers to its ever more discerning customers. Since assuming responsibility for this portfolio, I have spoken of the need for the industry to maintain its competitive edge. If it does not do so, it will fail to reap the due reward for the massive investment of public and private funds in the sector over the past 12 years, an investment that some economists put at more than €4 billion.

Another ingredient, key to the successful development of tourism, is the quality and levels of service that the industry has to offer. It makes little sense to invest millions of euros in building facilities, unless the necessary steps are taken to ensure that the quality and level of service is in accordance with what the customer wants and consistent with what that customer has been led to expect.

If we build high standard physical facilities, we must also deliver appropriately high quality services. If the operational standards do not match the physical quality of facilities, then the market potential of these facilities may not be realised. The future success of Irish tourism is dependent on the industry developing and maintaining quality product and quality service which provides good value for money, supported by effective, consumer-led, marketing programmes and the enhancement of its overall business capability.

About 15 months ago, the Government decided there was a compelling case for streamlining and integrating the delivery, at national level, of the State's activities in supporting and promoting product marketing and development, human resource development and training in the tourism industry. To that end, it approved the creation of a new authority which would take over the range of functions exercised by CERT and those remaining with Bord Fáilte. The authority will have a clear mandate to take whatever actions are appropriate to help industry in its efforts to enhance the quality of its products and services and to do so in a manner designed to help it hold and increase its market share in well defined market areas.

It will be essential that the closest possible links, teamwork and working arrangements are put in place and maintained between the new tourism development agency and Tourism Ireland Limited. Tourism Ireland will focus on getting people here. A major focus of the new authority will be on the experience of visitors when they get here. If we are to ensure that our tourism product evolves in line with international consumer demand, there will have to be an effective partnership between the two organisations. There is already a close working relationship between Bord Fáilte and Tourism Ireland Limited. Exchequer funds flow to Tourism Ireland via Bord Fáilte. These relationships will be maintained and strengthened in the context of establishing the new authority.

The intention behind this Bill is to put in place a strong and well resourced body with a clear mandate to address some of the key issues facing the tourism industry. It is important, at this juncture, to have a tourism development agency that can work with operators in the tourism sector and offer them a better range of streamlined programmes and services to support their future development. We are creating a new organisation out of two existing organisations which have given good service and developed good skills over the years. While the authority will build on existing skills, I hope it will do more than that. We need a new dynamic in tourism development. We need a vision and a new structure to deliver on that.

We will not wait until this Bill is passed to start work. Much work has already been done to lay the groundwork for the new organisation. That work will result in the body being able to hit the ground running and to develop rapidly into a highly effective, highly regarded body for the development of tourism here.

There has been strong support for the principle of integration of CERT and Bord Fáilte. The Irish Tourist Industry Confederation and the staff trade unions have also given their support. Building on this support, I established an interim board on 4 July of last year, which is charged with the task of ensuring that the new authority can be up and running in time for the 2003 tourism season. It has an independent chairman and includes the chairpersons and some existing members of the board of Bord Fáilte and the council of CERT as well as a representative from my Department. I take this opportunity to thank the interim board for its work to date.

I will now give a brief summary of some of the main provisions of the Bill. The Bill contains three Parts. Part 1 contains a series of standard provisions regarding title, interpretation, expenses and the laying of orders made by the Minister before each House of the Oireachtas. Provision is also made for the repeal of some provisions of the Tourist Traffic Acts which relate to the corporate governance of Bord Fáilte. This is necessary because the governance provisions of the Bill will obviously replace the old provisions relating to Bord Fáilte. For clarity, CERT, which is a limited company established at Bord Fáilte's initiative, is not a statutory body. There are, therefore, no provisions in the Tourist Traffic Acts which pertain to the corporate governance of CERT.

Part 2 constitutes the bulk of the Bill and contains those provisions necessary for the authority to come into existence and to carry out the functions ascribed to it.

Section 6 allows me to set, by order, a day for the establishment of the authority. On that date, the authority will come into being and Bord Fáilte and CERT will cease to exist. Their functions will automatically transfer to the authority. While the official name of the authority is the National Tourism Development Authority, section 7 allows the authority to describe itself as Fáilte Ireland for operational purposes.

Section 8 sets out the authority's functions. The over-arching function of the authority will be to encourage, promote and support the development of tourist traffic within and to the State and the development and marketing of tourist facilities and services within the State. Within that overall context, the authority will seek to develop the recruitment, training and education and development of persons to be employed in the tourism sector. The authority will engage in research and planning. It may engage in advertising or publicity, or provide advice, consultancy services, training or support, including financial support. The authority will continue to exercise the powers currently exercised by Bord Fáilte relating to the registration and grading of certain types of tourist accommodation. These powers are spelled out in various provisions of the Tourist Traffic Acts which will remain in place.

It is important to understand that the Tourist Traffic Acts do not prescribe the particular criteria with which a premises has to comply in order to be registered. The Acts merely set out the functions and powers in relation to registration, grading and listing of accommodation. The actual criteria are set out in regulations made from time to time by Bord Fáilte, with ministerial consent. That process has worked satisfactorily in the past and I propose that it continue under the new authority.

I also propose to arrange with the Attorney General for the restatement of the remaining provisions of the Tourist Traffic Acts under the mechanisms provided by the Statute Law (Restatement) Act. That will create a single source of coherent and easily accessible legislation relating to the registration and grading functions transferring to the authority.

Section 9 is standard and allows me to confer additional functions on the authority. Section 10 gives the authority power to set up companies and to acquire interests in companies. Section 11 allows the authority, either at my direction or with my consent, to delegate certain of its functions and describes the types of bodies to which functions can be delegated. One body, which is specifically mentioned in that context, is Tourism Ireland Limited to which I have referred. This is the first recognition of Tourism Ireland Limited in the Tourist Traffic Acts.

Section 12 provides that the authority may contract out certain of its registration, grading and inspection functions under the Tourist Traffic Acts and Schedule 2 lists the relevant provisions. This will allow for the continuation of the current practice whereby Bord Fáilte contracts out some of its inspection and grading functions to private contractors. Section 13 requires the authority to comply with policy directions. It is a standard provision and is found in legislation governing several agencies.

Sections 14 to 22 are standard provisions governing membership and meetings of the authority and conflicts of interest and disclosure of information by members or staff of the authority. The authority will consist of a chairman and 12 members. Section 23 allows the authority to establish committees. These will be useful in helping it to better perform its functions.

Section 24 is a standard provision which puts a cap on the aggregate level of advances which the authority, from moneys provided by the Oireachtas, can make for the purpose of supporting enterprises and projects relating to the development of tourist traffic and the development and marketing of tourist facilities and services. The cap is set at €65 million.

Section 25 allows the authority to provide financial aid in relation to the carrying out of its functions and to administer EU schemes. Throughout the 1990s, the administration of EU tourism development schemes was a major component of the work of both Bord Fáilte and CERT. Even though their significance has diminished in the current round of Structural Funds, Bord Fáilte is still involved with administering such schemes. It is important, therefore, that we ensure that the authority is empowered to undertake such work. The section gives the generic power to grant financial aid. Detailed criteria governing qualification for such aid will be laid down, as is current practice, in the conditions of various schemes and initiatives.

Sections 27 and 28 contain standard provisions in relation to the submission and auditing of audited accounts and annual reports. Section 29 provides for the application of the Freedom of Information Act to the authority. Section 30 is a standard provision allowing the authority to accept gifts on conditions consistent with its functions. Sections 31 to 33 deal with the position of chief executive.

Section 31 provides for the appointment of a chief executive. Under this section, I am empowered to designate a person as first chief executive of the authority upon its establishment. Following the outcome of an open competition, held under the aegis of the interim board of the authority, I recently announced my intention of appointing Mr. Shaun Quinn as the chief executive of the new organisation once it is formally established.

Section 32 deals with the accountability of the chief executive to the Committee of Public Accounts and reflects the rules governing that committee. Section 34 is a standard provision for the appointment and remuneration of staff.

Section 35 provides for the transfer of the existing staff of Bord Fáilte Éireann and CERT to the new authority. Staff will automatically transfer, on the establishment day, on terms and con ditions no less favourable than those to which they were subject immediately beforehand. Any merger will give rise to an understandable anxiety on the part of the staff affected. This provision is a powerful guarantee which delivers a very high level of security to those involved and reflects a promise which I made to union representatives when I met them late last year.

Section 36 is a standard provision governing superannuation. It protects the rights of existing staff and pensioners of both organisations.

Part 3 contains standard transitional provisions concerning a range of items, including the dissolution of Bord Fáilte Éireann and CERT, the vesting of property and the automatic transfer of the rights and liabilities of the two organisations to the authority.

Schedules 1 and 2 list provisions of the Tourist Traffic Acts 1939 to 1998 that have been repealed, or may be contracted out, as a consequence of the provisions included in the Bill.

The purpose of this Bill, when enacted, will be to allow us to establish a new National Tourism Development Authority. Wider issues of tourism policy will be considered in the context of the review, which is now under way, and I expect there will be opportunities for members of the Oireachtas to input to that review, if they so wish, and to debate the outcome of the review in due course. The outcome will, of course, shape the policy environment for the authority.

I commend the Bill to the House and I look forward to hearing the views of Deputies.

I compliment the Minister on bringing forward the Bill so expeditiously. I too welcome the Bill. It will give a certain cohesion to an area that is critical for the future of the tourism industry in Ireland and the merger of Bord Fáilte and CERT will prove very effective. However, I have some reservations. There are employees of both agencies who are concerned about the provisions of the Bill. I shall outline these later. It is right to recognise the work of Bord Fáilte and CERT.

Bord Fáilte has served this country well. Since its establishment in 1955, it has become synonymous with Ireland and Irish tourism. It is really the brand name for Irish tourism. In America in particular it was a major marketing advantage. It is right to recognise the commitment and dedication of those who worked with Bord Fáilte at various levels over the years, from chief executive to the office workers. They worked in co-operation with the operators of business and together they have created the industry and brought it to its present levels.

The Minister outlined a number of statistics which I will repeat. The industry now employs about 140,000 people directly, 8% of the total workforce of this country and more than the figure employed in agriculture. Its net foreign earning exchange value is now in excess of €3 billion per year and it generates over 47 cent in taxes for every euro of foreign tourism spent in the coun try. These are just some of the many statistics used to demonstrate the contribution tourism is making to our economy. The tourism industry is largely made up of indigenous enterprises and is deeply rooted in the fabric of Irish economic life, both urban and rural. With the passing of this Bill and Bord Fáilte, its remarkable contribution must be recognised.

CERT was formed by Bord Fáilte in 1963 and it has made a major contribution to training the foot soldiers who have made such a contribution to the tourism industry. They are the people at the coalface who meet the customers. The chefs, the people serving behind bars, receptionists and the people working in tourism offices are the unsung heroes of our tourism industry. At times they do not get recognition. For a long time they worked for very low wages because prior to the introduction of the minimum wage, the tourism industry was one which could not, in many instances, afford to pay high wages. These people worked in a dedicated fashion to promote the industry, and hotels, bars and restaurants throughout the country became identifiable and made their names through some of these people, whether porters, bar people, receptionists or chefs. Many hotels, restaurants and other tourism enterprises built their reputations on these people. Many of these people were trained by CERT and it is important to recognise that today.

The area of training and education is critical for the future. Some people, however, are concerned that with the merger of CERT and Bord Fáilte, the area of training and education will, in some way, be denigrated, although that may be an extreme word to use. There is a concern that this important aspect of our tourism industry may not be given sufficient emphasis because the focus has been taken off it. Will the Minister respond to that concern in his reply? I was in New York recently and met a chef from England. Apparently, the UK Government is sending its chefs to America to learn about recent advances in cuisine there. I understand that the Americans sent their chefs to France in the past. Such training is not something we should take for granted. To some extent, I share the concern that the emphasis may be taken off training and education in this new merger.

CERT had a close bond with schools. When I taught in Tarbert comprehensive school in the early 1980s, CERT was in constant contact with the career guidance teacher. The organisation built up a good partnership with the teacher but this may not be a great mix for schools. Will the Minister respond to that?

I understand there are some unresolved industrial relations problems in CERT. Some agreements entered into, or promised, have not been delivered. It is only right that whatever problems exist are resolved before the merger. It is important that members of both organisations coming together to face what will be a great challenge do so in a harmonious fashion and without any baggage. I am not aware of any concerns in Bord Fáilte but I am aware of some unresolved industrial relations issues in CERT which need to be resolved. Will the Minister respond to that in his reply?

The new body will face major challenges. Does it have enough power and is it sufficiently representative – I suppose that depends on the board the Minister picks – to meet the challenges we face? Tourism crosses so many Departments and agencies of State and is not confined to one agency. For example, the Department of the Environment and Local Government plays a critical role in tourism. The Department of Justice, Equality and Law Reform also plays a role – for example, in the area of licensing laws – as does the Department of Finance. As well as a National Tourism Development Authority, we also need some kind of interdepartmental group comprising civil servants from each of the Departments. There is a need to co-ordinate the various responses which will be critical to the future of the industry. In that context, I will probably table an amendment on Committee Stage proposing such a structure. The Minister's officials might consider that.

The good thing about such a debate is that it affords us an opportunity to talk about the tourism industry generally. I wish to address some of the concerns in the tourism sector. The first issue relates to competitiveness. When the ITIC report was published in September, the Minister more or less accused the industry of being the reason for the loss of competitiveness, or at least that is how he was reported in the media. In some cases that may be the case but, generally speaking, we have lost our competitiveness as a result of Government actions or, in some cases, maybe inaction. The increase in VAT on most tourism products from 12.5% to 13.5% in recent budget will not be a help. I picked up the Irish Hotels Federation's publication, Insight, and the headline reads, “Budget measures will damage tourism”. It refers to the increase in VAT and to capital allowances write-offs for hotels from seven years to 25 years and states that will virtually end the development of new hotels in Ireland and will be a major disincentive for existing hotels to upgrade their properties. Whether it is true or not, I understand a new hotel, the Four Seasons, is being built in Milan by Irish investors. From what I hear – I cannot confirm this – Irish investors in hotels are looking outside the country. That provision led to the building of new hotels and the refurbishment of others. Both could suffer as a result of that provision.

Our VAT rate on tourism products is the second highest in the Euro zone, with just Germany higher at 16%. I said in the Dáil previously that our VAT rate is almost double that of our main competitors, France, Spain, Portugal and Italy. The rate in France is approximately 5.5% and in Spain and Portugal it is 7%, which puts Irish products at an immediate disadvantage.

The biggest problem currently facing many enterprises is the cost of insurance. Insurance on tourism enterprises from hotels to bars, restaurants and activity centres, is five to six times the European average. There has been a hike in the past year of between 40% and 200%, and many people are only now becoming re-insured. This will put huge pressure on operators. The only way they will survive is to cut back considerably on staff, which will affect the quality of their product and service, or charge more. Some try to balance between different measures. These people will not be able to survive and make a living for themselves and their families if they continue discount charging. Apart from the increase in VAT, the cost of insurance is currently a huge issue.

Electricity costs have increased in the past year by approximately 14% and I understand there will be a further increase of 8% this year. This year local authorities increased substantially waste disposal costs. They increased rates by 5% and water charges will also increase. All these impositions affect the competitiveness of the tourism industry. The level of charges on the industry are considerably more than in competing countries. Since 1996 the consumer price index has increased in the region of 22% while in other EU countries it has increased by just 11%. Apart from Greece, our inflation rate is the highest in the whole of the EU.

I listened recently to someone who is very involved in the tourism industry whom the Minister knows well, Mr. McCarthy of FEXCO. He made the point that Kerry Group, Spectra and FEXCO have created jobs in Kerry, and produced new products in rural areas over the years, but they have not got the services, particularly proper roads. The same could be said of tourism. I will refer shortly to the national spatial strategy. Currently there are some of the worst roads in some of our prime tourism areas. Investment in roads has not followed on from investment in tourism products by private operators. People who have made huge investments have not been rewarded with better roads. The N69 in Kerry, which takes all the traffic off the ferry through North Kerry en route to south and west Kerry, and into Clare, Galway and up the west coast, received approximately €200,000 investment last year. It is one of the worst national secondary roads in the country. People who travel this prime tourist route, which serves the ferry at Tarbert which carries 250,000 cars every summer, are amazed and disgusted. While this is not an issue for the new authority, the state of our roads has a major effect on tourism. This is why some type of inter-agency group should be set up to look at the multiplicity of problems facing the tourism industry.

Another issue that has come up repeatedly is signposting. I have received correspondence about it and the issue has been highlighted in the national media. I welcome the announcement last week that money will be allocated for signposting in three counties, including Kerry. Tourists usually like to travel to scenic areas throughout the west of Ireland, most of which are in remote areas. Very often, however, they cannot reach these areas or, if they do, they get lost. At night time, in particular, people cannot read many of the road signs, which are covered by bushes and are not maintained; some even point in the wrong direction. The signposting on which tourism depends so much, is inadequate. While a start has been made to deal with this, it must be accelerated.

On the issue of street violence and the licensing laws, which have a major effect on tourism, I saw a number of reports in newspapers, including comments by people who have come to Ireland, that they are very concerned about the level of street violence throughout the country. This will damage the image of Ireland abroad. When the Minister liberalised the licensing laws, there was a great deal of pressure on him, and Members on different sides of the House supported him. However, these laws are not working out. People are horrified at the incidents taking place on the streets and in some of our main tourist towns. We are all aware that it is very dangerous to walk through O'Connell Street or Temple Bar at night. Some of our major tourism centres are becoming very dangerous places to visit, particularly when people spill out of the bars and on to the streets at night. I hope there will be a total review of the licensing laws and that they will revert to where they were previously. The case was made at the time that liberalising the licensing laws would facilitate tourists coming here given that one could drink all night in other countries. Our tourism product should not be about drinking. We must consider seriously the licensing laws because the change in pub closing hours has led to an increase in street violence and other forms of violence. It sends out the wrong message to markets we are trying to capture.

It is very important to highlight the whole issue of access. Shannon Airport could currently take in the region of 2.5 million extra passengers. It has been proven that 50% of passengers who disembark at Shannon Airport end up in County Kerry, compared to 22% of those who disembark at Dublin Airport. It stands to reason that Kerry will benefit if more people arrive in Shannon.

I welcome the announcement made by US Airways before Christmas that it will serve Shannon from May. Similarly, the south-west will benefit from the fact that Aer Lingus intends to restore the Baltimore route that it dropped last year. The numbers seem to be approaching their levels before Aer Lingus abandoned some of its routes. Having said that, Shannon Airport's capacity could cope with many more arrivals. The new operator that is trying to resume some of the services once operated by Aeroflot should be given every encouragement and support. Shannon Airport needs investment and focus and must receive the same support as Dublin Airport. I believe that the Minister for Transport will shortly announce the establishment of an independent board to promote Shannon Airport and I would welcome such a move. It is important that Aer Rianta is involved in such a board, as a board without Aer Rianta would be ineffective and might weaken Shannon Airport.

Those of us from County Kerry are fortunate that Kerry Airport has the third longest runway in the country, but unfortunately it is under-utilised. The length of the runway should provide County Kerry with advantages in the future. Deputy O'Donoghue, as Minister for Arts, Sport and Tourism, should encourage more operators to use the airport and should ensure that more people flow through it. Given that Kerry is so far from Dublin, it is important that we use the advantage we have at Farranfore and encourage more people to come to the county.

The House discussed the issue of the international conference centre some time ago, when the Minister did not seem to have much of an opinion on it. I recently read in a newspaper that it has become a priority of the Minister, however, and I am glad he is taking an interest in it. Business worth about €50 million is lost every year due to the lack of a conference centre with capacity for between 2,000 and 5,000 people. Great sums of money are being lost all the time because we do not have a suitable facility in Dublin.

This matter was a major issue when I was Fine Gael's tourism spokesman in the early 1990s. EU money had been allocated and a decision had almost been made, but the project did not proceed. It is time to make a final decision to build a conference centre, perhaps funded by a private public partnership or the National Development Finance Agency. It does not matter whether it is located in Spencer Dock or elsewhere as long as a decision to proceed is taken soon. The conference centre will be a critical part of our tourism infrastructure. Perhaps a case can be made for building a few regional conference centres as well. The National Events Centre in Killarney is often used as a conference centre and could be designated as a regional centre.

The launch of the national spatial strategy before Christmas was a major event. The strategy contained a number of recommendations in relation to the tourism industry. One of the great things about the industry is that tourism enterprises, such as hotels, cannot be relocated somewhere else. Investment in tourism has permanent benefits for the locality. More so than other industries, tourism can be an important vehicle for developing rural areas, eliminating the disparities between regions and distributing wealth throughout the country. This potential was emphasised in the spatial strategy and I hope the National Tourism Development Authority will be mindful of it. It is natural that the first place to be examined by a new agency will be right outside its doors, but it can lead to problems as most State agencies are located in Dublin.

Farming and other indigenous industries have declined, meaning that tourism is increasingly critical for all parts of the country. It is the only hope for many areas. It is important that the NTDA will have a broad focus and that its decisions will take cognisance of the objectives outlined in the national spatial strategy.

The proposal to develop new tourism centres in areas that do not receive many tourists, comparatively speaking, is a good one. Areas with the potential to develop a critical mass of visitor numbers with a strong overseas component are to be developed, with a focus on new visitor attractions. North Kerry is a good example of a place that could benefit if it were designated as a tourism centre. People think tourism is widespread in County Kerry, but that is not the case as the north of the county is not getting the spin-off that it could get if a greater effort was made. The Minister is aware that a proposal has been made to Bord Fáilte for a cluster development, which would comply with the tourism policy we should be pursuing. I will have an opportunity to refer to various sections of the Bill on Committee Stage and I intend to make certain points then.

I welcome the National Tourism Development Authority Bill 2002 on behalf of the Labour Party and I thank the Minister for bringing it forward. I am glad the Minister intends to bring the Bill through the House speedily as it has been discussed in the Seanad. It is essential that the Bill is passed by the House as quickly as possible in the interests of tourism development. The interim committee that has been set up is actively pursuing some of the Bill's aims. Members should facilitate the passing of this Bill in light of tourism's importance and the potential employment in the tourism industry.

As previous speakers have said, Bord Fáilte and CERT deserve to be congratulated for their work over many years. Bord Fáilte did an amazing amount of work to promote tourism in Ireland. CERT has had a major influence with regard to the training of personnel in the tourism industry. In any country, one might run into a person who had received basic training skills from CERT and was proud of that and of the fact that they could represent themselves and Ireland so well abroad and at home.

The new board will have important new functions as set out in section 8, particularly with regard to advertising and publicity. This is a factor that must be developed by the new authority and it is very important in the context of domestic tourism. It has been neglected over the years but will now be addressed by the new committee. The establishment of tourist offices and the publication of lists of registered and unregistered premises involved in the industry is important in advancing tourism to its rightful place as a major component of the national interest and potential development. My main concern in that regard relates to the capping of funding at €65 million. That may not be enough and the Minister should state in his reply how that funding is to be divided and how the Government came up with a figure of €65 million.

With regard to the development of the tourism industry, major difficulties were created by foot and mouth disease and the events of 11 September. There was also a sense of civic duty and patriotism from Irish people at that time when many changed their plans and decided to holiday in Ireland. That was appreciated by the Government, tourism organisations, hotel owners and others involved. I hope that will be encouraged by the new board through advertising and publicity and that there will be a new drive in this regard.

There was a debate on agriculture in the House last week. The new board will link with agriculture to develop the agri-tourism business, something of vital importance to ensuring an alternative for members of the agricultural community across the country. I often wonder why we have not developed or publicised our waterways despite the rivers, canals and lakes being potential goldmines for tourism. In England and on the continent, canals and waterways are developed to their full potential whereas we have not done that. I hope the Minister in drawing up the new Bill will realise that this must be addressed and that there should be major initiatives with regard to waterways and the agri-tourism business as part of the overall package and as part of the work of the new board.

The board will not mean the end of problems for the tourism industry and those involved with the industry know that. There are many problems in the industry and the Minister in recent months has highlighted, as has Deputy Deenihan, the question of its price competitiveness. At a time when there are low price air fares to all parts of the world, it is a major problem to hold people here and to attract people from other countries. As a result of new technology, it is possible to compare prices across the world and, if Ireland is to be high on the list with regard to tourist numbers, competitiveness will be one of the major components required. The Government and those involved in the industry will have to address this as a matter of urgency.

The October report of the Irish Tourism Industry Confederation on the high price levels in Ireland has met with no response from the Government. In a sense, this valuable report contained what many people suspected about Irish tourism which is that the cost of goods and services for tourists has become increasingly expensive in recent years. The introduction of the euro has made it easier for continental tourists to compare prices immediately with those in most EU member states and that may detract from Ireland's attractiveness to tourists from other countries unless competitiveness improves.

It is also important to note the ranking of Ireland in the EUROSTAT table of most expensive countries in recent years. In 1995, Ireland was the eighth most expensive country in Europe but by 1999 that had jumped to fourth place, and it has remained in the top three or four since that. EUROSTAT has identified a particular concentration of high prices with regard to pubs and restaurants, recreation and culture, and alcohol and tobacco. When one considers that, in 2001, 54% of tourists' expenditure went on accommodation, food and drink, and sightseeing and entertainment, these statistics are amplified. With inflation now running at 5%, the ability to control prices becomes more difficult but should not be ignored.

There can be little doubt that high prices in the Irish tourism industry only became an issue since the industry began to experience difficulties in recent years. This is proof that the industry has been taken for granted too often. There is a common assumption that, with agriculture, tourism has a strong base and will continue to supply the Exchequer with a stable and reliable income in the future as it has for many years. It is taken for granted that Ireland is an assured destination for foreign tourists regardless of the cost of getting to or staying here, and despite trends in the international tourism industry.

Sadly, it has taken the setbacks of recent years to challenge these assumptions. We must look at our attractiveness with regard to tourism and the setting up of this authority will help deal with those responsibilities. The authority will have a major input to turning around a position which has been slipping away on us for the past year or so. A mechanism has now been put in place to turn that around. I hope this authority will link with the various sub-boards and regional tourism boards to ensure that maximum publicity and advertising is utilised to make all parts of Ireland attractive.

Deputy Deenihan gives the impression that County Kerry is the only tourism location in the country with attractions and requiring attention. There is not a county in the country that does not have attractions and all require attention. For example, the horse racing industry in County Kildare attracts a specific type of tourist. However, it is not enough because it only operates at certain times of the year. It is important to blend the horse racing season with other attractions to provide an overall tourism package throughout the year. The Minister has visited Punchestown on many occasions and he is aware that its festival will shortly match the events offered at the Cheltenham festival. It has developed over a number of years. Ireland's potential in a number of areas, especially sport, will continue to ensure that the country is an attractive tourism location.

I welcome the Minister's recent comments on the development of a national conference centre. It will be a necessary and major part of the tourism infrastructure and will play a vital role in attracting major conferences to this country. I recently attended an IPU conference in Burkina Faso. The conference centre was built to host the conference and I was surprised that it was poss ible to build it on a greenfield site adjacent to the country's main city.

The arguments for and against the national conference centre, the national stadium and other developments have been too protracted. We must move forward and accept that these projects are to the benefit of the country, especially the tourism industry. A national conference centre would immediately attract international conferences which in themselves ensure many visitors come to the country. Projects such as these also have major spin-offs in terms of their planning and development. I hope we will see advances and that they will not be delayed by bickering. I support the Minister in his drive to secure a national conference centre as soon as possible.

Tourism is of critical importance to the country. In its March 2002 briefing document, the Irish Tourist Industry Confederation estimates that tourism is a €4.8 billion industry and that the Exchequer earned over €2 billion from the industry in 2001. Tourism supports approximately 140,000 jobs, or one in every 12. It is vitally important in sustaining regional economies. Investment by the State in tourism marketing yields an extraordinary 50:1 return. As a source of employment the industry is vital to the country. It supports 145,000 full-time jobs, equivalent in 2000 to 8.7% of the total number of those employed. If that number of jobs were vulnerable in any other industry there would be a public outcry.

We tend to forget the importance of the industry in terms of providing employment opportunities. Hotels provide a source of expertise in terms of management staff, chefs, waiters and so on. In this way they have the potential to become centres of excellence which attract visitors. When hotel guests receive proper service they will tell others, which is an excellent form of advertising for a given area. I have spoken to people who recently visited Cork and stayed in a hotel adjacent to the city. They were delighted with the service and told others. On the strength of that, two other families visited the hotel.

In 2001, the growth in Exchequer earnings from tourism reached a peak. In the five years to 2001 there was a 55% increase in earnings, reaching a total of €4.845 billion in 2001, or 4.2% of GNP. This is beginning to decline and the Government must take steps to arrest such a downward trend.

Tourism plays an important role in regional development. It tends to be concentrated in areas that have little else in terms of indigenous industry and agriculture because of the poor quality of the land. Tourism is the factor that makes a difference, as is the case in the west. In view of this we must consider what can be done to maintain a regional distribution of the benefits of tourism and to advance agri-tourism.

According to the Irish Tourist Industry Confederation, 40% of visitors to Dublin also visit at least one other region. In view of this, it is important that the regional tourism boards are interlinked to ensure that other areas and regions are highlighted to visitors to the larger cities. This will help to ensure regional balance in the industry and that the least well off areas in terms of industry and agriculture will secure the maximum benefit from tourism.

I hope the Minister will take the opportunity provided by this debate to address the concerns of the tourism industry regarding what they consider to be the negative impact of the budget. The Irish Hotels Federation has indicated its disappointment with the reduction in the capital allowance write-off for hotels, from 25 to seven years, and the increase in the lower rate of VAT to 13.5%.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.