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Dáil Éireann debate -
Thursday, 24 Sep 2009

Vol. 690 No. 2

Other Questions.

Tourism Industry.

Joanna Tuffy

Question:

6 Deputy Joanna Tuffy asked the Minister for Arts, Sport and Tourism the policies he has initiated to protect the hotel industry here which is under economic strain; if he has had negotiations with the Department of the Environment, Heritage and Local Government towards providing rate subsides to allow local councils to reduce their rates particularly in areas such as the hotel industry; and if he will make a statement on the matter. [32323/09]

Emmet Stagg

Question:

16 Deputy Emmet Stagg asked the Minister for Arts, Sport and Tourism the percentage decrease in tourism for 2009; the measures he has taken to tackle this issue from a policy level; and if he will make a statement on the matter. [32335/09]

Tom Hayes

Question:

23 Deputy Tom Hayes asked the Minister for Arts, Sport and Tourism his plans to respond to the submission from the Irish Hotels Federation outlining the measures required to deal with the current crisis in the industry; and if he will make a statement on the matter. [32275/09]

Bernard J. Durkan

Question:

25 Deputy Bernard J. Durkan asked the Minister for Arts, Sport and Tourism the extent to which he has reviewed the tourism sector to date in 2009, with particular reference to the negative impact of the economic downturn; the degree to which specific issues have been identified which might have the effect of improving the trading conditions in this sector for the remainder of 2009 and 2010; and if he will make a statement on the matter. [32224/09]

Kathleen Lynch

Question:

34 Deputy Kathleen Lynch asked the Minister for Arts, Sport and Tourism the policies he has brought forward in the area of tourism in view of the decline in international tourism to Ireland; and if he will make a statement on the matter. [32341/09]

I propose to take Questions Nos. 6, 16, 23, 25 and 34 together.

In response to Parliamentary Question No. 3, I outlined the tourism performance so far this year. There is no doubt that the period to date in 2009 has been very difficult for tourism globally which has been reflected in overseas visitor numbers to Ireland. There have been significant declines in GDP, personal spending and consumer confidence across all our major source markets which, combined with unfavourable exchange rate movements, have had a negative impact on the numbers of overseas tourists.

In this context, through regular contact with the key industry representative groups, I am fully aware of the many issues affecting the hotel and catering industry, including the issues of costs and competitiveness. Managing costs will be key for tourism businesses to survive the current downturn and Fáilte Ireland has implemented a range of measures to help the tourism industry to address costs and competitiveness.

In particular, they have refocused their programmes to meet the enterprise support needs of businesses in the tourism sector in the current difficult climate. In 2009 Fáilte Ireland will be investing almost €6 million in the form of direct supports and advice for tourism enterprises. The industry is responding well to the initiatives and the take-up on the programmes is very positive.

I regularly discuss costs and competitiveness issues affecting tourism with my colleagues both at Cabinet and bilaterally. In this regard, my colleague, the Minister for the Environment, Heritage and Local Government, specifically asked local authorities to again exercise restraint in setting any increases in commercial rates and local charges for 2009, in order to support competitiveness in the economy, nationally and locally.

Local authorities responded positively to this request and there was only a marginal average increase in rates across the country of 1.15% in 2009, significantly lower than previous years. A number of local authorities decreased rate levels and some others did not increase them. While I would like to see rates on business drop across the country, I recognise the genuine funding needs of local authorities. In the medium term, the broadening of the revenue base, particularly at local level, presents opportunities to relieve the burden on tourism and other businesses.

I am also glad to see that the changes I called for in Sunday pay rates in the hotel and catering sectors are now taking place. As a result, the cost in those sectors of labour on Sundays nationally will now be at time and a third as agreed through the JLC process. Given the high labour input in the tourism industry these important changes should have a positive impact.

Proposals have been received from the Irish Hotels Federation to alleviate the difficulties being faced by this sector of the tourism industry. The proposals cannot be considered in isolation and will be assessed in the context of policy responses for the industry as a whole as well as the general economy and the forthcoming budget.

In that regard, I am aware that Fáilte Ireland is working very closely with the Irish Hotels Federation on a study on hotel room capacity. This report will clearly have a role to play in presenting new policy options for this important part of the tourism industry.

With regard to working capital, I met representatives of all the banks to impress on them the need for appropriate lines of credit to be available to the tourism and hospitality sector, in particular as we face into the autumn and winter period, which is a very challenging time when working capital is required by many in the tourism sector. To assist the tourism sector through this current difficult period, an extensive range of marketing, product development, festival and sporting events, training and business supports are being rolled out by the tourism State agencies under the tourism services budget of the Department. For example, Tourism Ireland is keeping its marketing programmes for 2009 flexible and responsive. It front-loaded its campaigns across all markets to secure as much business as possible for the peak and shoulder season and has now intensified its tactical and co-operative marketing activity for the second half of the year with an €18 million autumn campaign.

On the domestic front, Fáilte Ireland committed to its largest ever campaign to promote home holidays in 2009, with in excess of €3 million being invested in a year-round marketing programme promoting awareness of, and interest in, taking a home break. As we already discussed, last week the Taoiseach and I launched the autumn initiative which is co-ordinated and implemented by Fáilte Ireland with funding from members of the tourism industry, and is intended to boost business between now and the end of the year.

In response to Priority Question No. 3 I outlined the current state of play on the work of the tourism renewal group whose report I expect shortly. The industry deserves great credit for its commitment to quality and value for money in responding to the current challenging economic conditions through more flexible pricing and offering special value offers and packages. I am confident that, with the support of the agencies, the tourism sector has the capacity to manage the current cyclical slowdown and that, looking further ahead, the renewal group's review will help the sector to return to sustainable growth in the medium term.

I thank the Minister for his very extensive reply. Part of my question specifically related to rates and the Minister addressed it to some extent. I understand there is a balance between the local authority needing the rates and the cost to the hotel sector. At present, the hotel sector is considered to be in debt to the order of approximately €6.7 billion; a phenomenal amount of money, almost at Irish Nationwide levels, and reckoned to be at approximately €110,000 per bed.

The Irish Hotels Federation makes the point that rates are set based on the size of premises and have nothing to do with turnover or employment. This gives a very skewed rate for those trying their best to keep people in employment. I recognise what the Minister stated about local authorities needing to receive the rates but we have to consider what is happening to the hotel industry. Can any realistic approaches be made to the Department of the Environment, Heritage and Local Government to address this? South Dublin County Council was one of the local authorities that reduced its rates. The Minister stated that rates were increased by 1.3% overall. The Irish Hotels Federation believes it should be reduced by approximately 30% for the sector to be viable. Perhaps 30% is an optimistic level of reduction but increasing the rates is making it impossible for many hotels to be viable.

I agree with the Deputy on this point. I introduced a Valuation Bill a number of years ago and I have always believed that rates should be based on current market conditions and real value and income levels and not a notional level based on the size of the property. One could have a very large property with no activity taking place in it. It is open to local authorities to make themselves aware of the real issues for the properties they are dealing with and to work closely with the sector to ensure the rate is fair and reflects current economic value and not a notional square footage value. I am glad to hear some local authorities are doing this and I encourage all of them do so as we come to the end of this year and go into next year. Deputy Upton referred to a reduction of 30% and I do not know how realistic that is. The industry is under pressure and we need flexibility in the public sector to be able to match the timing of real-time changes to current activities.

The Deputy was correct to state that there is overcapacity in the market and some businesses in the tourism sector are more speculative rather than having a tradition of being involved in the sector. Unfortunately, some of these may go by the wayside but that being said we will try to sustain as many as possible of the businesses that exist in the wider tourism and hospitality sector.

On that issue, I spoke to a hotelier in Cork who pays €10,000 a week in rates. It adds up to €500,000 a year, which nobody can sustain. That is not even in Dublin; it is in Cork. The hoteliers are reducing their prices but their inputs must come down. That means local authority inputs must come down.

My question is related and the Minister was about to touch on it. Many of the hotels established in recent years are developer hotels and not hotelier hotels and many have gone into examinership. They are trading in a little cocoon and are protected from all normal commitments they might have. They have a holiday from payments, which are obligations for hotels that are not in examinership. A problem of unfair competition arises between hotels in examinership and those struggling but not yet in trouble. Those hotels are reducing their prices but hotels in examinership are slashing their prices just to bring in some cash. The examiner will want to bring in some cash to minimise the losses and to make some contribution to overheads. In the short term, that is very good for the consumer but in the long-term, it is not much good if it drives all the original hoteliers out of business.

The issue of examinership will have to be addressed. It is very obvious in the hotel industry but it will happen in many other businesses. Has the Minister had the opportunity to talk to the Minister for Finance or the Tánaiste? Who would deal with an issue such as this? Obviously, the use of examinership has increased hugely and it is causing problems for legitimate businesses which are struggling and just about keeping their heads above water.

I am aware of the problem. I have had some interaction with the Irish Hotels Federation on this issue and it has made that point clear to me. I do not believe it is widespread but the Deputy was right that there are instances where hotels are literally sustaining themselves. They are turning money but are not profitable and are not even covering their costs because of certain protections that exist. That is a concern in regard to the legitimate end of the industry, so to speak, which is struggling to survive, albeit at heavily discounted rates. Such hotels are certainly not making much profit but are hoping to make enough to keep the doors open.

It raises a wider issue of which I am aware in the context of the National Asset Management Agency. A situation cannot arise which would allow unfair competitive practices simply to sustain one block to the destruction of the other. That is an issue I have already voiced and to which I am very alert. We must be very careful in that regard.

Given that set of circumstances and what one might call NAMA hotels, or hotels at risk of being put into the NAMA system, has the Minister considered asking the Minister for Finance if he will appoint somebody with a knowledge of the tourism or hotel industry to NAMA? The debt is €6.7 billion, which is a substantial amount of money. Somebody with a specific knowledge of, and interest in, the tourism industry or hotel industry should be appointed to NAMA.

It needs somebody with a very particular level of skills given the complexity of this area. I am anxious that the quality of that board is unassailable in terms of the depth and breadth of its knowledge, as is the Minister for Finance. I believe the Minister for Finance has said to the Deputies' party leaders that if they have particular people in mind, they should talk to him. I am in the same position and I will do so.

I do not want to simply put a hotelier on the board. The person must have a very high level of financial skills. If I could find somebody with that high level of financial skills who has some track record and understanding of the broad tourism sector, that would be a win-win situation.

It is important it is not somebody with a vested interest. That will be the problem with NAMA. There will be clear conflict of interest for the banks which will manage both loans. It will be a real issue.

The National Asset Management Agency has traction. There are issues to be resolved and the Minister for Finance is open to that on Committee Stage. Our discussion demonstrates the complexity and the pitfalls for various sectors. I am glad we are all alert to them and are working to try to ensure we do not create even more problems for ourselves. There will be good people on the National Asset Management Agency who will be able to sustain us in terms of their skills.

Film Industry Development.

Liz McManus

Question:

7 Deputy Liz McManus asked the Minister for Arts, Sport and Tourism the economic benefit of the film industry to Ireland in each year since 2000; his views on recommendations to close or merge the Irish Film Board; and if he will make a statement on the matter. [32326/09]

I refer the Deputy to my reply to Priority Question No. 1 of today.

Departmental Funding.

Seán Barrett

Question:

8 Deputy Seán Barrett asked the Minister for Arts, Sport and Tourism if he has received confirmation from the Department of Finance regarding the availability of national development plan funding for projects falling under the remit of his Department; and if he will make a statement on the matter. [32229/09]

Within the remit of the Department, the National Development Plan 2007-13 makes provision for allocations to the culture sub-programme, the sports sub-programme and the tourism programme.

The Department's role in the culture sub-programme relates to the development of Ireland's cultural infrastructure. The aim is to protect and showcase our cultural heritage, to support the Government's policy on universal access to arts and cultural facilities and to assist the tourism industry in product development in this area. In the three years of operation of the current national development plan, the Government has allocated almost €170 million for these purposes.

Similarly, the sports sub-programme seeks to develop our sports infrastructure by providing grants for a range of sports bodies at the local and regional level, including swimming pool facilities, and by providing supports and facilities that will allow Irish athletes to compete on an equal footing with their international competitors.

The sub-programme also seeks to develop national-level sports facilities, such as the new stadium at Lansdowne Road as well as the continued development of the horse and greyhound industries. We saw also Thomond Park open this year. Up to 2009, more than €420 million has been allocated for these purposes, which represents by any standard an impressive contribution to the sports and recreational infrastructure of this country.

The tourism programme seeks to invest in international marketing, in the development of tourism product and infrastructure, and in training and human resources. To date, the tourism programme has benefited under the NDP to the tune of almost €239 million.

As part of its ongoing work to take measures to stabilise the public finances, the Government has been examining all current and capital expenditure, including that planned in future years as part of the national development plan.

As is the case every year, NDP funds are provided through the annual Estimates process for the Department. The Estimates process in respect of 2010 is currently in train and the outcome will be announced in the forthcoming budget.

The question was a little broader than I intended. I was trying to focus on the tourism capital investment programme and I am sorry that was not in the question. Perhaps the Minister will clarify that.

The €50 million, which was supposed to be in the national development plan for tourism investment——

Is the Deputy referring to the product development fund?

Yes. It was €50 million support planned for the upgrading of and presentation to the best international standard of approximately 20 of our most strategically important existing visitor attractions, heritage and so on. I know a large number of people are not investing currently but some are. Will this scheme go ahead? These people believe they are limbo? They had prepared applications for funding and now find they do not know whether it will go ahead.

I realise there will be less money for everything and that the national development plan is a bit of a myth at this stage. If there is not be the kind of money we thought there would be for investment, perhaps it is a reason to try to refocus efforts on and repackage what we have.

Earlier I spoke about Fáilte Ireland and Tourism Ireland. I am not undermining their marketing. The Minister said they put great effort into marketing and I do not deny that but perhaps they need to change what they have been doing. I refer to products such as the gardens of Ireland which are not marketed. It is a huge growth industry but there is no way to market them. The garden owners are gardeners and are not able to put together clusters of gardens and sell them as a tour. They do not have that kind of expertise. That is where Fáilte Ireland should step in and use what money we have, although I accept we will not have the capital money we had in the past, to try to promote and help individuals.

The Minister mentioned surfing, for which Ireland is famous. However, there is nothing in terms of marketing. When people go to tour operators in Frankfurt or elsewhere, they are sold Irish hotels. It is not based on what one does when one gets to the hotel, that is, a package of activities which is what people want, but on where we have good hotels. There are good hotels everywhere in the world. We must have something unique.

I saw a fantastic television programme on TG4 recently, more by accident than design, on surfing in the west. It is extraordinary that some of the big names in world surfing have only now discovered the west.

They have to change on the beach, however, because there are no changing facilities for them.

That did not seem to bother them. These were high-end surfers and they were blown away by the quality of waves.

Recently, I opened Woodstock Gardens and Arboretum in Inistioge, County Kilkenny. They reminded me of the Mount Congreve Gardens, Kilmeaden, County Waterford, which are world famous, but there is no coherence in marketing their tourism potential. Many bodies working in similar areas attend the Department but each of their marketing budgets are too small to have any impact. We need to have coherence between them all in marketing. If we pool the sum of all the parts we might get a much bigger bang for our buck in the international market. I have said to many of the bodies that the Department will work with them to put a coherent approach in place and ensure their marketing moneys are best used. The Department is examining how some tourism products are delivered. For example, a hotel promoting in conjunction with a garden on a regional basis would bring some coherence and a more effective marketing cost.

The national development plan set out ambitious targets for the tourism sector. Expenditure for tourism was to reach €800 million and for sports was to reach €991 million. I accept delivery of these targets will not happen due to the current economic circumstances. Will the plan ever be implemented? How significant will the cuts be? Were these ambitious targets just a promise from a time when collecting votes was more important? The cuts in sport have been significant for rural and urban communities which were looking forward to small capital investment in local sporting facilities. How optimistic can we be that the national development plan targets will be reached in the future?

A substantial amount of funding has already been spent under the national development plan. Clearly, the economic circumstances that have not just hit Ireland but the rest of the world have been beyond anyone's expectations. The national development plan will still be in place. However, the economic downturn and the lack of resources will change the timeframe to deliver some of these projects. There was a strong commitment made when the framework for tourism and sport was drawn up. We need to work through its key elements with existing resources until we get back to economic growth in the next several years and deliver the balance but in a longer timeframe.

During the summer I visited Birr Castle Gardens which were renovated over the past ten years. They informed me, however, that their visitor numbers are down to what they were in the mid 1990s. Another summer with such figures and the gardens will have to close. It is a fragmented industry that needs to be given some coherence.

I have had several discussions with the family at Birr Castle. I am aware of what they have achieved. The Office of Public Works has been effective in assisting in some of their efforts. The Deputy is correct that we cannot allow that investment to die away. For the next year, we will try to find the resources to sustain, even at a minimal level, many of these facilities and not allow them fall by the wayside.

National History Museum.

Joe Carey

Question:

9 Deputy Joe Carey asked the Minister for Arts, Sport and Tourism when the Natural History Museum will re-open; and if he will make a statement on the matter. [32239/09]

Jan O'Sullivan

Question:

42 Deputy Jan O’Sullivan asked the Minister for Arts, Sport and Tourism when the Natural History Museum will re-open; the cost of reinstatement works in the building; if the refurbishment works will be adequate to ensure the museum does not need further refurbishment works in several years; and if he will make a statement on the matter. [32334/09]

I propose to take Questions Nos. 9 and 42 together.

A programme of works for the Natural History Museum, agreed between the National Museum of Ireland, the Office of Public Works and my Department, is under way. It is designed to facilitate the reopening of the museum in as short a timeframe as possible, having regard to the need to meet key health and safety concerns.

The programme includes work to facilitate appropriate fire evacuation procedures, the reinstatement of the stone staircase, the installation of safety netting under the glass ceiling, the introduction of a ramp to the front door to facilitate disabled access and works of a minor nature relating to decoration and presentation. The total cost is estimated at approximately €265,000.

As this programme of works and the tasks the museum will have to undertake in preparation for re-opening will take longer to complete than originally anticipated, the re-opening date has been deferred to early 2010.

In the meantime, an exhibition of artefacts from the Natural History Museum is showing in the riding school at the National Museum, Collins Barracks . This exhibition showcases key items from the Natural History Museum’s collection, thereby allowing the public access to some of the collection in advance of the re-opening of the Natural History Museum in Merrion Street. This exhibition has proved very popular among visitors.

With regard to the need for further works at the Natural History Museum, the position, as I stated in my reply on 28 January 2009 to Parliamentary Questions Nos. 102 and 110, is that an extensive refurbishment-redevelopment plan has been drawn up for the museum but this major project is outside the scope and capacity of current budgets.

Given that originally very extensive work on the museum was planned, it now sounds as if a few nails and a ball of string are being put into operation. Stories about nets to catch falling glass from the dome and that the upper floors have had to be closed for health and safety reasons turn one's blood cold. Is the Minister sure this will work? Will the museum staff be given the assurances on health and safety they are seeking?

One of the objectives of these renovation works, apart from increasing the size of the exhibition areas, was to provide accessible toilets for disabled museum visitors. How much of the building will be accessible as it seems it will have less space when re-opened? What is the position on the additional storage sites that were to be located in Swords?

The type of refurbishment the staff and others wanted is going ahead and should be completed in another month. Ironically, the exhibition in Collins Barracks has been successful with many school tours booked in for this exhibition. As a result, the museum does not want to move before Christmas. It is believed the best time to move was February. Visitor numbers are up for the museum because of the exhibition's accessibility and imaginative content. I congratulate all involved, in particular the museum's director, Mr. Pat Wallace. The disability issues are being dealt with. There will be access and I presume also access to bathroom facilities.

What about the storage?

The storage was sourced in Swords. I believe that has been done. The access to that storage is important and I have no note to suggest that it will not go ahead. I can check up on that for the Deputy.

There has been a substantial drop. A total of €15 million was set aside originally and I think the Minister mentioned a figure of €265,000. That is a huge cut compared with what might have been available.

He might have answered the second part of my question about the number of visitors. Did he say it has gone up relative to the number that used to visit, which I think was 150,000 a year?

Strange as it might as it might seem — or maybe it is not strange, maybe I am using the wrong language — the numbers are very healthy and stronger——

My question is would some of those visitors have been visiting Collins Barracks anyhow? That would have been a separate cohort of visitors. I presume the Minister is including the total number of visitors. There would have been visitors to Collins Barracks and to the Natural History Museum.

I hope I am giving the figures based on the tours that are specifically booked in. There may well be some numbers based on the fact that Collins Barracks houses much more than the Natural History Museum. I understand, although I stand to be corrected, that the consistent booking of school tours etc. is very high and that they like the way the exhibition has become much more accessible in Collins Barracks.

Deputy Upton is right that there was a major capital programme which would have transformed the Natural History Museum after which it would have borne no resemblance to what it is now. All those involved in running the Natural History Museum, the Office of Public Works and the National Museum want to secure the existing museum in its present location, covering the points that Deputy Mitchell raised to make it safe. We probably all agree that we were very lucky in what happened because there could have been a very different outcome. The work is being done and will be completed soon. It will deliver a good quality project. The achievement of the Natural History Museum in the UK, which is a most beautiful building, apart from its contents, demonstrates that a large volume of tourists and cultural visitors from around the country have a great interest in natural history. I would like to see that project carried out in the fullness of time, if it is not achievable in the short term. I would like to see it come back into the frame ultimately.

If we ever reinstate the national development plan the National Museum and the Natural History Museum must be priorities for investment.

I agree with the Deputy. I see two essential projects, about which the Deputies might agree with me, the Natural History Museum, and the National Library, which is also adjacent to this House. It is a priority. I have recently been through the library, from its bowels to the work being done. To be kind, it is unsatisfactory.

It is frightening.

The value of the artefacts and historical items stored is immeasurable.

I have been telling the Minister that for years.

When I was in the Office of Public Works I was involved in some of the earlier work undertaken there. We need that project and the storage facilities for some of the artefacts.

Written Answers follow Adjournment Debate.

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