I am happy to welcome representatives of three of the regions, the South East Regional Tourism Authority Limited, the Midlands East Regional Tourism Authority Limited and the tourism arm of Shannon Development. I remind the representatives that the privilege members enjoy does not extend to witnesses, but that will probably not be an issue. We are currently looking at the issue of tourism in the regions, particularly in terms of the current year, and the issues outstanding for the bodies concerned. Many reports have been done and many recommendations have been made. Perhaps the representatives could comment on how they see the industry developing in the foreseeable future. I will ask each group to make a presentation and then I will open the discussion to members. I ask Mr. Pat Crotty from the South East Regional Tourism Authority Limited to make his presentation.
Tourism Industry: Presentations.
Mr. Pat Crotty
I will be brief. The last time we were here I made the presentation and Mr. Joe Palmer answered most of the questions. We might reverse the roles this time and Joe can outline how South East Regional Tourism Authority Limited is doing as a company. I will cover a couple of issues on the structure and dynamics of our industry.
There has been restructuring at national level and beyond that when one considers that Tourism Ireland covers both Northern Ireland and the Republic of Ireland. We are now down to restructuring at regional level. We consider this to be an important process both for the regions and for the counties. Within Irish and domestic tourism, the identity of counties, particularly in the south east, and the branding of same is important.
While we are restructuring — which takes time — the marketplace is changing dramatically. We must deal with the concept of later booking trends and the way that people seem to go anywhere at any time. One of the ways to do that through our structures is through the use of the web. It is one of the key points I made to our annual general meeting for the benefit of Fáilte Ireland and Tourism Ireland. I am not happy that the representatives of our industry are as good or as professional at using the web as individual players in the industry. That is not good enough because they are the first points of call for many people, particularly foreign visitors. It should be possible for people to use the home page of either of those agencies to get the best offers in Ireland today, wherever they want to go. That would create confidence in the marketplace as people would revisit those sites to get the best available offers. That might encourage more people to take more breaks.
As an operator in the industry, there are many things from which we suffer, but one of them is the perception of rip-off Ireland. It is hard to argue against that, but there is a rational explanation for it. While we live in a low income tax regime, the corollary is that we live in a high spend disposable tax regime. VAT and other costs are substantial. The difficulty we have vis-à-vis other countries is that people in other countries live in high income tax, but low spend tax regimes. As a result, foreigners, particularly Europeans who come to Ireland, are taxed heavily on their income at home and when they come to Ireland they are heavily taxed on their disposable spend. Irish people, on the other hand, who go to Europe on their holidays are used to a low income tax regime, but then they experience the low spend tax regimes where there is low VAT on food, drink and accommodation and no excise duty on drink because many of these countries produce wine. As a result, Irish people come home with the attitude that they are being ripped off here. However, that is not the case. Our cost bases are different.
If we are serious about supporting the tourism industry, we must redress the imbalance that has occurred in recent years whereby Ireland produces more income from inward tourism than it allows out of the country through outward tourism. The only way we can fix that is to make the product more attractive in Ireland both to foreigners and to Irish holidaymakers.
The other element of our costs, which is untenable, is that we are being advised all the time to be competitive and to maintain a competitive edge. All the costs we must bear and which we pay on day one of every year before a single customer comes in our door are being increased dramatically above inflation. I am talking about the costs levied by local authorities. When the rates are struck in every county, they are payable at the beginning of the year and they do not take account of inflation. The only community paying the costs is the business community. The tourism industry is paying more than its share because a hotel, for example, occupies a huge amount of ground space so the rates are high. Waste charges and other costs are also high. I will not outline them in detail because I am sure the committee has heard them in other presentations. There will come a point where they will become untenable.
As regards the future of the industry, which I am sure other speakers will mention, while there is some degree of buoyancy in urban centres in terms of the amount of business being done, I have grave concerns about profitability, which is the lifeblood of the industry. If there is no profit, there will not be any business and our offer will diminish as well as the number of Irish people holidaying in Ireland and of visitors coming into the country.
Mr. Joe Palmer
Mr. Crotty has covered many of the policy issues high on our agenda. I will give a quick profile of tourism in the south east. All the indicators are that tourism in the south east in recent times has performed well up to national standards and in some instances above the national average. These are independent measurements over and above the CSO figures.
Of all the tourism regions, we are the most dependent on domestic tourism. We are not the largest earner of revenue from domestic tourism, but we have the greatest degree of dependency. Therefore, it is very important for us that the promotion of domestic tourism continues on an all year round basis. As far as overseas tourism is concerned, Britain is our number one market, driven largely by ferry travellers coming in at the port of Rosslare. In recent times we have seen a significant decline in the volume of that business and have lost share to low-cost air carriers. While we are well positioned in terms of access from Shannon, Cork and Dublin, we only have a regional airport at Waterford. It is important that we see the expansion of air services into Waterford as the regional air hub.
The industry is fickle. Take, for example, the developments over the weekend where, on a prime holiday weekend, we had disruption of ferry services into Rosslare. Earlier we had other disruptions in that service from the port of Cherbourg. We are very vulnerable to this type of third-party activity. It is important we see an early resolution of that matter, particularly in this first week of June.
With regard to the PricewaterhouseCoopers report to which the committee Chairman referred, our board and industry regard it as very important that the region continues to have an up-front and active role in the promotion of the south east region. The focus should not shift entirely to other tourism regions, which, as we acknowledge, have experienced very difficult times. We do not want to see a shift in the business from east to west. We want to see it grow for everybody.
In my considerable experience in regional tourism I have not encountered a season where the industry has been so nervous about the prospects for the year ahead as in the current year.
Thank you. We will move on to Midlands East Regional Tourism. I take this opportunity to acknowledge that one of its former chairpersons, Mr. Seán Doherty, died this week. I am sure he is a big loss to the region as much as to politics.
Mr. Tom Malone
Unfortunately, Mr. Seán Doherty has passed on. We will certainly miss him. I hope his family will be comforted in the knowledge that he has performed well in life.
I concur with almost everything my colleague, Mr. Crotty, has said. I only recently took up my position and as such I am learning the trade. Our region surrounds Dublin and is a unique region of eight counties, or seven and a half to be precise. The region is so diverse that within it there is almost an east and west divide. We find ourselves, particularly now, rather nervous about the future, given that we do not seem to get the dispersal and regional spread appropriate to us. Hence our acceptance, in principle, of the PricewaterhouseCoopers report, which indicates a regional spread would be wise. It also indicates that this would be cost effective in reducing overheads and bringing about a more coherent, product-marketing approach, as opposed to an area or segment-marketing approach. We suggest that from here on, the approach should be the visitor knows no boundaries. Our products are second to none, not alone in our region but throughout the country.
Unfortunately, as we go forward, we must respect the fact that we have a high cost base. Rightly or wrongly, I cannot concur with what my colleague Mr. Crotty said on that. This is one of our dilemmas. The reality is that this is the perception being offered to the public by the media etc. We would say we are not a high-cost but a value-for-money base. We have an excellent and varied product second to none.
We are one of the spectacular areas for the future as we are the Ryder Cup region. That event is the third largest media product in the world and we will host it next year. Our product range in golf is second to none. We host significant events, the Irish Open, the Nissan Open, and the European Open and next year we will have the Ryder Cup. That is an excellent capacity in one area. We have a significant increase in accommodation for a range of other activities. This has been aided by a number of tax advantages, in terms of investment, which we encourage. As a result we offer a wider and greater volume of product to visitors.
I will hand over now to my CEO as I would prefer him to give the details on the region. I thank the committee for this opportunity.
Mr. Norman Black
As Mr. Malone has said, the east coast and midlands region is a diverse area and the largest tourism region in the country. Traditionally it would not be regarded as a prime tourist destination. That said, tourism remains an important industry in the region and just over 20,000 jobs are dependent on tourism or the hospitality industry. Tourism is significant from that point of view.
The region has particular strengths in heritage, golf, equestrian activities, angling and cruising. During the 1990s our performance was good and the region was one of the best performing in the country, but since 2000 it has been more of a mixed bag. Since 2000, from 2000 to 2003, the number of overseas visitors to the region declined by 9%, but at the same time, the number of domestic holiday makers increased by 30%. This is a substantial increase.
In common with other parts of the country, but particularly in the east coast and midlands region, there has been enormous increase in hotel capacity of in excess of 50%. Much of this hotel development has been in the larger centres and this has implications for how we promote the region. The region has a strong special interest product base but this has been in decline for a number of years and has had a significant impact, particularly on our major market, the United Kingdom. More than 55% of our business is from the United Kingdom, which generates 50% of our income. The domestic market has shown strong growth in recent years and accounts for more than half the visitor numbers to the region and almost 25% of the revenue.
In addressing the issues our focus is on short holiday breaks to 12 of the larger centres in the region, particularly because of the increased hotel capacity, but also because there has been a significant increase in quality restaurants and other recreational facilities in these towns. Most of these hotels also have state of the art recreation and leisure facilities. Conference business is increasingly important also. This is the major focus of our activity this year and for the immediate future.
In addition, we are concentrating on a revival of special interest activities. Mr. Malone mentioned golf. We have more than 90 golf courses in the region, ranging from some of the best in the world to more affordable golf courses. We are concentrating on promoting all forms of golf. Affordable golf has a particular attraction for the UK market and we are working closely with a number of golf tour operators there. We get a substantial amount of short break, mid-week or weekend business from the United Kingdom and it is spread throughout the region.
The Internet plays an increasingly important part in tourism promotion. We are linking our website more closely with Fáilte Ireland. I take on board what Mr. Crotty said in this regard. We are currently conducting a series of seminars with the trade throughout the region to encourage more special and other offers on the website. The potential is enormous. Almost every night one sees advertisements on television that show a person just needs to make one click to get the holiday or break he or she wants. This is the way we should promote ourselves. In essence, we are also targeting tour operators in our main markets, basically the UK and certain markets in mainland Europe to encourage the tour operators to extend their coverage of various amenities and facilities in the region. We also will go to about 50 trade shows and consumer events in our main markets. Overall it has been a mixed bag. While our overseas visitor numbers have been dropping, they have increased slightly in the past two years. However, they are still not back to the 2000 levels. We see huge potential in the domestic market and many of our resources will be focused on further increasing that market. We will spend approximately €400,000 this year on our marketing activities, focused on areas where we believe we will get the best returns.
I have circulated a selection of our promotional brochures and members will see that all our counties and special interest activities are highlighted. It is our policy to give as much coverage as we can to each county in the region. These brochures are widely distributed in our main market areas. We also produce the most important ones in the languages of our main markets. In essence that is where we are coming from. As Mr. Palmer said the season to date has been poor. We have probably received the most negative view from the trade of any recent years. The only good news is that domestic business is holding up quite well. However, overseas business is certainly down and we would highlight the UK, which is our most important market. Many operators say it is unlikely they will be able to recover regardless of what happens for the rest of the season and numbers will not match last year's.
We now move to representatives of Shannon Development.
Mr. John King
Tá an-áthas orainn a bheith anseo inniu. Tá súil agam go mbainfidh sibh tairbhe as an taispeántas. We have circulated a report containing considerable detail. While my presentation will be based on this report I will not read every word. We are delighted to have the opportunity to present to the joint committee the prospect for tourism in the Shannon region and the west of Ireland. Mr. John Leonard, our regional tourism manager accompanies me. While Shannon Development is the tourism authority for the Shannon region it is also a semi-State company responsible for regional economic development. In that context we are probably structured somewhat differently from the other regional tourism authorities. Mr. Leonard and I are broadly equivalent to the chairmen and chief executives of the other regional tourism authorities.
Our role in the economic development of tourism started in 1959. It initially focused on helping Shannon Airport to develop its business at the start of the jet era. Many different challenges exist today. The company's brief is to develop industry, tourism and rural development in the wider Shannon region. Within Shannon Development our tourism role is to establish the region as a quality tourism destination, to increase the numbers employed in sustainable tourism and tourism induced jobs broadly across the region. While I will not go into the detail of the objectives of our tourism development section, these are listed on page 2 of the report.
In terms of our tourism profile, our region is on the western seaboard and has a strong tradition of tourism. Examples include the Cliffs of Moher, the music of Clare, the medieval banquets and folk parks of Bunratty, King John's Castle in Limerick city, the Burren and Lough Derg on the periphery of the region around north Tipperary, south Galway and east Clare, to name but a few. In 2004 we had just over 1 million overseas visitors to the region spending approximately 4 million bed nights. Approximately one-third of these came from the UK, one-third from the US and Canada and one-third from the rest including mainland Europe and further away. They spent just under €300 million in the area directly, which probably means close to €1 billion worth of induced spend across the region last year. Domestic tourism is also very important. Approximately 750,000 domestic visitors came to our region spending just over €100 million last year. Overall it is a very important sector for the development of the regional economy.
We reviewed the transcripts of the previous meetings of this committee and noted that substantial detailed information had been supplied. We propose to highlight some issues that we see as important for our prospects for this year. We can then take any questions afterwards. The areas on which we want to focus are: regionality and the performance of the region's tourism; access and how people get to our region; product development and innovation; marketing what we have; and the Internet. I will ask our regional tourism manager, Mr. John Leonard to give a short comment on each of those five areas after which we will take questions.
Mr. John Leonard
In the handout we have given the committee, we have broken the items down into the issue, the challenge and the possible response required. While I will not go through each point, members may review them. The biggest issue is that of regionality. Ireland tends to lead with top-line tourism statistics, including revenue growth and visitor numbers growth. Those figures are and can be impressive. However, further issues lie deeper and continuing to focus on those figures can mask a multitude. I will set the Shannon region in the context of the west of Ireland. While the 2004 figures have just been published, I will compare 2003 with 1999. We have 3 million fewer holidaymaker bed nights across the three regions, north west, west and Shannon, than we had five years previously. This figure would be 4 million if we include the area from Donegal to Cork. Clearly deep issues exist. Rather than be negative about the matter, we want to present this as the challenge to which the industry must respond. Tourism Ireland, Fáilte Ireland and we as regions all need to respond.
Even within those figures we can see the organisation of Irish tourism. Within some of those regions urban centres are performing reasonably well which means that the rural areas are deeply impacted. Further to the point made by Mr. Crotty, even with 4 million fewer holidaymaker bed nights, offers have had to be put into the marketplace which impacts deeply on yields. We all need to respond to these real issues, which have come about as a result of increased competition. As we have modernised, we do not have the compelling reasons to visit that we might have had in years past, which is an issue. Once we define the issues the solutions should nearly be self-evident. If we do not have compelling reasons for visitors to be attracted to the western regions, we need more compelling reasons. Perceptions exist that we are expensive and not family orientated. We are perceived to be male orientated in offering pubs, golf and not much of the rest of what we offer is visible. Among overseas visitors, for the most part the female chooses the holiday.
Ireland is not sufficiently different. People in the UK do not consider that they are going abroad when they come here. They prefer to go to mainland Europe where there is more sunshine. We need to respond to the many issues by clearly defining the problems, such as mobility, and suggesting responses. People stay in Ireland for a comparatively short period. They confine their travel to areas which are in close proximity to the gateways. If they are here for just two or three days, they will visit the icons, so to speak, and they will not see much else. There is a lack of dispersal.
We need to promote a multifaceted response if we are to overcome the barriers to the take-up of Ireland's tourism product. There has been a deterioration in many aspects of that product. We are not sufficiently innovative. When one attends meetings, one notices that people highlight an individual product in County Kerry, for example. One notes the lack of innovation when the reference to that product is repeated at every meeting one attends. We need more creative packaging and a major shift from traditional marketing. We should engage in new forms of electronic marketing rather than continuing to market Ireland in the way we have traditionally done. We should support those who are trying to open access to this country. We are seeing some positive developments in that regard.
The various tourism regions need to be given special supports. It is clear that action is needed in response to the reduction of 4 million in the number of occupied bed nights. Special initiatives are also needed in Dublin which has experienced a very high level of growth. I acknowledge that some issues need to be addressed in respect of Dublin which offers a different tourism product. Those of us who refer to the regions should not be seen as anti-Dublin. Some things need to happen in the regions, however.
As a representative of Shannon Development, I often complain at meetings like this about a lack of progress and balance. I have often pointed out that the pattern of access is weighted in favour of the east coast. There have been some positive developments in that regard for the first time. There has been an unprecedented level of growth in access to the west of Ireland from the UK and Europe. Some 1.8 million inbound seats are available this year. We will need to ensure that such services are sustained. The progress made has been hugely positive. It is incredible that there are 112 flights from London to the western regions — I refer to airports between Shannon and Derry — each week. Some 925,000 inbound seats are available on such flights each year.
There have been similar improvements in the level of access to the west of Ireland from Europe and North America. American Airlines is flying to the west of Ireland for the first time. While the impact of such progress has not yet been noticed throughout the region this year, there is anecdotal evidence of improvements within the industry. Many of the new routes, such as those operated by Ryanair and American Airlines, commenced on 3 May last. It is critically important to sustain the improvements in access. There has been a great deal of discussion about access from North America, which will continue to be critical. I am sure that matter will be raised by members of the committee.
We need to recognise the opportunities which are presented by the co-operation between the three regions in which there are four airports. In that regard, a fund of €1 million has been made available to be spent primarily in the UK. I will speak about that matter later in my contribution. I have referred to the issues of product development and innovation, so I will not speak about them in any great detail at this point. I have highlighted the need for innovation. Ireland's tourism marketing is not creative. It offers nothing new. There is a tendency to think it is enough to offer golf, angling and equestrian activities. We could promote the Irish tourism product in many other ways, for example on the Internet.
Those involved in the marketing of Ireland should provide compelling reasons to visit. We need to target broad groupings, such as couples, as well as niche markets. It should be borne in mind that 50% of those who visit Ireland come here as part of a couple. We do not consider them as couples, however. We need to target families too. There is a perception that Ireland has little to offer families, but that is not supported by analysis. We need to determine whether our problem is that we do not have a product to offer or that we are not communicating our message in the correct manner.
I reiterate that the Internet is the major marketing issue to be addressed. I accept that progress has been made with the regions' websites following co-operation between Fáilte Ireland and the regions. That process needs to be accelerated, however. Better synergies are needed when Ireland is marketed overseas by Tourism Ireland. I have highlighted some of the measures being taken by the three regions and in the four airports. We have developed a new website that links us all together so that people in the overseas markets can access information at a single Internet address. I am also interested in the print collateral, the e-marketing initiatives which are taking place overseas and the media schedule, particularly in the UK. Full-page advertisements for the western regions have been placed in UK publications to target all the UK markets. Such advertisements highlight ease of access and particular offers.
Members of the committee can see in the documentation we have supplied the logos of all the organisations involved in Tourism Ireland and Fáilte Ireland. The model that has been put in place offers potential for further investment. We should try to make progress in that way.
I thank those who made presentations. I applaud Mr. Leonard for concluding by highlighting the co-operation that is taking place. There is often a perception that local tourism bodies fight with county tourism bodies, which fight with regional tourism bodies, which fight among themselves, and Fáilte Ireland is fighting with everyone else. We are sometimes unsure where Tourism Ireland is. Such unfair perceptions can be overcome by showing that all the organisations are working together. There is no point in competing to sell the merits of counties Kerry and Donegal, for example, when people do not know where Ireland is. It is easy to forget that a person in Japan, for example, might not know that Ireland is a European country. He or she might think it is a suburb of London. It is time to see the bigger picture and to work together.
I would like to raise two brief matters before I allow Deputy Deenihan to contribute. I was interested in the point made about the website of Tourism Ireland. When we were in Argentina, we were informed that when one seeks information about Ireland on the Internet, one gets information about Italy. We were asked by travel agents how they can sell Ireland when people who look for information about it are referred to a website about Italy. We said we would work with the ambassador and the industry to try to bring about change in that regard.
I agree with Mr. Leonard's emphasis on the Internet, especially as we are spending a fortune on marketing. It is important to highlight the best offers on a website and to keep it updated. It sounds like a sensible way to proceed. Representatives of Fáilte Ireland and Tourism Ireland will be invited to address the committee. Many regional tourism representatives have attended meetings of the committee. Who is responsible for ensuring that tourism packaging takes place? How can we ensure that people staying in a bed and breakfast know that the equestrian centre down the road caters for children? I do not mean to be sexist, but it is important that men know about golf facilities and women know about shopping. Who is domestically responsible for packaging such aspects of tourism to the 4 million tourists we are losing to overseas markets? Are we close to ensuring that everybody is working together? Is it still the case that everyone thinks they own the same hat? Are matters still falling between stools? Are tourists deciding not to come here because they are not getting the right information?
Are we making enough progress in product development? I was interested to hear Mr. Leonard say we are not innovative. The lack of innovation relates to the Internet issue. Do those who are in charge of product development have a level of knowledge of new technologies that allows them to be innovative? Are they stale? Perhaps it is controversial to ask people involved in the industry to state whether their colleagues are stale. How can we ensure that the right type of support is available to deliver the products which are important?
The tourism product advertised by some regions has a strong emphasis on cultural matters. One expects to hear music in pubs in certain parts of the country. One does not even have to think about it. In some instances, the cultural element of the tourism product does not have to be marketed because it sells itself. Is there a reason for the strength of the cultural aspect of tourism in such regions? Do the tourism marketing bodies focus on the arts? Do they consider that the arts are integral to tourism or does it happen by accident?
I will allow Deputy Deenihan to speak before calling Deputy O'Shea, Senator Kieran Phelan and Senator Ó Murchú.
I thank the Chairman. We met the delegation to get an overview of what is happening in the regions. It came across that the State as a whole is performing well but the regions are suffering because there is a lack of spatial distribution of tourists. Many products have been developed in the past 15 years throughout the three regions but unless the numbers go to them and support them, they cannot be sustained.
There is grave concern that we are not getting the numbers at the moment, although we hope the season will improve. While the domestic market is improving, some products are designed to attract foreign tourists rather than domestic and many of the domestic tourists are not interested in seeing what they have seen in their own areas. They do not have the same curiosity about the products. There should be a brief overview of the breakdown of visitors to attractions on a domestic and overseas basis.
Dublin has become vibrant. In the 1990s taxi drivers might not have seen any tourists in the middle of June. Now there are tourists here all year round, with as many tourists at Christmas as in August. The pattern of tourism has totally changed as a result. There are more flights into Dublin so more people stay there. Tourists coming into Dublin stay in Dublin while those who come into Shannon spread around the regions. From a western regional point of view, Shannon Airport continues to be very important. If there is a change in the bilateral agreement between the EU and the US, there must be something to replace it. The other regions would also benefit from that.
The south east, east coast and midlands have an advantage in the British market. The south east region has a ferry port and a historical connection with Norman areas of Britain. Much of the architecture is similar to that in Wales and the south of England. The British market has a great deal of potential for the south east, with Kilkenny, Wexford, Waterford, Clonmel and Cashel all being strong centres with great potential for tourism growth. Senator Ó Murchú has built up an important centre next to the Rock of Cashel and last year 225,000 tourists came through there. Kilkenny and other south eastern centres offer a viable and vibrant product. The future will be good in that area.
The east coast and midlands areas are near Dublin but a person must travel quite a distance from the city to escape its congestion. The Pale is extending further all the time and where the population is there also a great deal of traffic. Is any effort made to get people out of Dublin and into the regions?
I agree with Pat Crotty about the taxation system. Once we had low indirect taxation and high personal taxation. That has been turned around and last year Irish tourists spent €110 million more leaving the country than those coming in because they are going to lower indirect tax regimes. It is easy to see how that works in favour of those going abroad for their holidays. No one wants to increase taxation but we must strike a balance.
My dealings with Shannon Development through the regional authority with responsibility for north Kerry were positive and I regretted the change. I recognised, however, it was difficult to market Kerry separately and that posed a problem. However, there should have been a transitional period, as I said to the Minister last week. This season has been lost and north Kerry will lose out because it is in limbo now. There should have been a one year transition period and Cork Kerry Tourism would have been ready to take over in January.
In the PricewaterhouseCoopers report, there was a recommendation that other authorities should be like Shannon Development, which since 1959 has been effective in developing the natural heritage of the area. Rather than creating concepts, it has worked on the indigenous product, be it the heritage of the area, the Cliffs of Moher or fishing in the Shannon. A group of products has been moulded together in that area that has boosted tourism in the whole region.
How many tourists went to north Kerry last year? I recognise what was done in Tralee. The "Come North" package had started when the change took place but Tralee did well, with the aquadome and the museum being marketed well by Ogie Moran and others. The campaign was starting to break out of Tralee towards Listowel and Ballybunion but it did not get that far.
Shannon Development has a good track record and has been effective and professional. The other regions, as the report suggested, should look at the operation and learn from it.
We all fully embrace the PricewaterhouseCoopers report and recognise that integration is important. The roles of the regional tourism authorities must be expanded to connect with Fáilte Ireland and Tourism Ireland. That synergy is necessary but does not seem to exist. Certain places operate as independent republics but the country is too small for that to happen. I agree with the Chairman that there are multiple agencies between which there should be more integration and co-ordination.
I agree too with Mr. Leonard that cluster products are important. The last tourism operational programme was too bureaucratic. There were several good projects but they needed someone to underwrite them in order to be approved. Local authorities were reluctant to underwrite projects after the Jeanie Johnston debacle; they all said they did not want another Jeanie Johnston in their regions. Does Mr. Leonard agree that future product clusters should have a more sympathetic bureaucratic regime and that the process of underwriting projects should be reviewed? Maybe there should be another approach to winning support for those trying to provide cluster products.
Some of the visitors may be aware of Francis Brennan's new spa in the Park Hotel in Kenmare. I organised a tourism conference recently and invited Francis Brennan to attend. He showed how he had utterly transformed his hotel and business by building a futuristic spa for €4 million. It was expensive but it has boosted his hotel and has already attracted tourists during the shoulder season. He is booked out for Christmas. That is an example of how innovation and quality products can change a business. If people are looking for ideas they should look at what Francis Brennan has achieved in Kenmare.
I welcome the chairpersons and chief executives of the regional tourism authorities and thank them for their stimulating submissions. The Minister for Arts, Sport and Tourism attended a recent meeting of this committee where he spoke of a 1% drop in the number of British tourists coming to Ireland last year. While that followed a couple of years of growth it is not good. Is there a breakdown of those figures, for example, is that an even drop across different types of tourist such as motorists or people coming for short visits? In the past the British tourist was seen as a good spender and formed the core of the market.
A couple of speakers mentioned the increased access to Dublin as a result of which many visitors stay in the area. Conversely, there is more rapid development of tourism in the BMW region. Are we growing the business or are we spreading it around? The delegates here today feel we need to move the tourists out of Dublin and into the regions, especially the west and the BMW region. Mr. Leonard observed that our product lacks initiative and that we are not growing it.
Deputy Deenihan mentioned the great success of Brú Ború in Cashel. Are we doing enough in terms of festival or cultural tourism? The Chairman also mentioned this. I was pleased to hear the Minister speak in relatively positive terms about a new theatre in Wexford which would link with the Wexford Festival Opera. Although that is not my constituency I wish it luck.
A theatre in Waterford also needs investment. We are not realising the full potential of this type of tourism but what are we doing about that? As a former chairman of Waterford Airport Company I was delighted to hear Mr. Palmer speak about the airport but I would have preferred him to be more positive because we need more carriers into the region. While Shannon Airport is in a strong position, Dublin Airport has a monopoly on the incoming traffic and one looks to Government to develop more access to the regions.
I did not know that tourism in the south east depended so much on the domestic market, which is growing. Mr. Leonard's comment that it is usually the woman in a couple who decides on the holiday destination is also new to me. It is probably logical because women decide just about everything else. In general I am concerned about the drop in visitors from Britain, albeit only 1%. What suggestions do our visitors have to win back British tourists, particularly the motoring tourist? One does not see as many British cars here as one did in the past.
Other submissions have mentioned the drop in activity in the bed and breakfast and guesthouse sector. It may be that when the older proprietors retire their families do not continue in the business. This type of accommodation was a good product. After the closure of the mines in Wales, particularly in the Rhonda Valley, when money was spent on tourism development it proved difficult to persuade Welsh women to run bed and breakfast establishments. The developers visited Waterford and asked us for suggestions. It requires significant investment and the hotel sector has grown but it is not healthy that there is a decline in this type of accommodation. In many cases the houses are located in remote places and bring business into areas the hotels do not reach.
I welcome the visitors and thank them for their extensive briefing. I have served with most of them at different levels over recent years. I acknowledge the presence of the chief executive officer of the Midlands East Regional Tourism Authority, Mr. Norman Black, who has served for 38 years and will retire on Friday week. I am delighted to have the opportunity to thank Mr. Black for the outstanding job he has done in the region. Deputy Deenihan commented on the effect on the regions of the PricewaterhouseCoopers report. In the mid-east region, there has been a large increase in hotel beds. How have the regional tourism authorities responded to this?
Cuirim céad míle fáilte roimh na toscaireachtaí a tháinig chugainn inniu agus gabhaim buíochas go mórmhór as ucht an eolais a chuir siad ar fáil dúinn. Tuigeann siad go maith na dúshláin atá romhainn. Ag an am gcéanna, thug mé faoi deara go raibh an-mhuinín acu asainn. Molaim iad go hard mar gheall ar sin.
I welcome the delegations and it is evident they realise the challenges facing the tourism industry. However, I note an expression of confidence which is particularly important. I am partial to the regional tourism authorities. From my experience, they have done a fantastic job. It must be borne in mind that challenges have not come every 30 years but every five years, particularly in the context of the North of Ireland. Just when we thought everything was ready to move, an event occurs setting back the whole marketing plan. We have all found this from travelling abroad and the difficult times connected with the North of Ireland.
We always responded quickly whether it was to foot and mouth disease or another event. We must take a lesson from this. This time it is a less tangible challenge on which we must focus. The only way we can respond urgently and effectively is to be clear in our minds as to the challenges. Looking at the profile of tourists, some 30 years ago we were benefitting from the Irish diaspora with people returning to their own areas. It was part of an emotional attraction for them. However, visitor profiles must be re-examined. Some 20 years ago, the most comprehensive survey on tourism was conducted, costing the then sizeable amount of £750,000, to find out exactly what visitors did in Ireland. It found 67% visited the national monuments. The second most popular activity was culture while other high points were high class evening entertainment and genealogy research. While many other surveys have been conducted recently, are we asking the right questions? Is there a need for a more focused and comprehensive survey to bring these scattered pieces together?
Affluence has harmed the tourism industry in terms of those who serve it. Deputy O'Shea touched on this with regard to bed and breakfasts. The attitude we have to visitors has changed. In the past, we loved what we were doing, seeing the advantages of the industry. At the time there were not many other job opportunities. Now this has all changed. In most restaurants, it is not Irish people serving but people from outside the country. While they are more than welcome, it will change the character of the tourism industry. How do we win back that enthusiasm which existed for the industry in the past against the challenges of other job opportunities? If we ignore this, the quality of the industry may be damaged. However, I do not believe the quality has suffered too much.
I do not agree with the outcry over prices. It reminds me of the foot and mouth crisis when there was a hiccup in the system of European subsidies. We started roaring until the world media picked up on the issue. We discovered subsequently that the same hiccups existed in the British system but they stayed quiet about it. I do not see any public relations value in shouting from the rooftops about our prices without comparing like with like. I have often noted visitors going to an upmarket restaurant in which they are asked to pay a reasonable price. They then claim they can do much better where they come from. When asked what kind of premises or services they are talking about, they could be comparing a five star hotel with a McDonald's outlet. We are doing harm to ourselves by that type of approach. We are selling ourselves short. What are the delegations' views on this? These are matters that can be resolved by us as a people. We should not just blame the people in charge of the industry.
On the issue of Dublin's tourism industry, I know the delegations are being diplomatic by claiming it is not a question of Dublin versus the rest of the country. However, there is a degree of that. There has been a sea change in the movement of tourists within the country. I sympathise with the Midlands East Regional Tourism Authority and some of the difficulties it has encountered. When Dublin Tourism attended this committee, I was loud in my praise of what it had achieved. We also had a delegation which was concerned about the national conference centre. The debate must not begin on the question of whether the national conference centre should be located in Dublin. More than likely it should, but it cannot be taken for granted.
Dublin Tourism has a certain aversion to the PricewaterhouseCoopers report. However, the other regional authorities do not have the same aversion. There is a message in that and it should be analysed. It is not accidental that Dublin's tourism industry is doing better. It is very good at looking after itself by pressing the right buttons and using influence. Those of us from the regions must argue for the regions.
The tourism industry requires major investment. I agree with Mr. Leonard from Shannon Development that some products only stay fresh for so long. One wonders why a product so successful in the past is not that successful 20 years later. It is wrong to wait until the freshness leaves a product. We must build one on top of the other. While one is going strong, the next should be prepared. It will not happen without investment. Both State and private investment is required because it is one of the best industries we have.
The investment must go to the regions rather than to Dublin. It is already saturated and will have its own problems in five years' time. It will not be as attractive as it was in the past. When visitors get caught up in traffic jams and cannot get bookings in restaurants, they will become critical of Dublin. Visitors are already becoming critical and one wonders what it will be like in five years' time. Dublin has the major share of the tourism industry cake. If that is reduced because Dublin is no longer attractive, it will not necessarily go to the regions. Major State investment, which would attract private investment, must be directed to the regions. Dublin already benefits from State infrastructure.
I thank Deputies Deenihan and O'Shea for referring to Brú Ború centre in Cashel, County Tipperary. This project largely grew from the community. An investor is interested in the dividend on his or her investment. It comes back to what I said earlier. There is some little thing missing, but it has a greater chance of success if it grows from the community, providing it is professional and in tune with what tourists need, which should be part of our comprehensive survey. If there is to be finance or help down the road, as other speakers have said, we should perhaps consider the activities which have a community base but which are also professional and geared to the needs of tourism, rather than always thinking of those who want a 25% return on their investments.
I welcome the delegation and thank its members for the presentation. Are we promoting tourism sufficiently abroad? As the chairman noted, we learned in Buenos Aires that when a tourism operator e-mailed Tourism Ireland with a query, he got no response for six months.
Whether we like it or not, we are still known as rip-off Ireland. No matter what the witnesses may say, that is the reality. This year we had a very prestigious event in Ennis, the world dance championships. I talked to people there from the UK and from all over the world. They left Ennis with a very sour taste in their mouths because of being ripped off. Will the witnesses investigate why the delegates felt like this when leaving Ennis? On their return to their own countries, people who feel like that advise others not to visit Ireland because they will be ripped off there. We cannot allow that image of our country to be promulgated.
I accompanied the Chairman on a delegation where a book produced by Tourism Ireland mentioned a place of which I never heard, Londonderry. I wonder where it is? Is it in the south or the north? I never heard of it. Could someone tell me where it is? Is there such a place in Ireland? If there is, I would love to know where it is because I would like to visit it.
The Deputy might get an opportunity afterwards.
That city's existence depends on whether the Deputy is reading a green or orange tourism book.
I am glad we have privilege here.
I welcome the representatives from the south east tourism region, from Shannon Development and in particular those from the midlands east region, because I am from there. I have nothing against the others. They are all right, but I have a soft spot for the midlands east region for numerous reasons. One is that I enjoyed my time as a former member of the Midlands East Regional Tourism Authority. I had one big holiday there. We had a great time and were well looked after. We saw the best of Ireland. If the tourists get the same treatment we got they must be as happy as Larry.
I pay tribute to Mr. Harry Lynch, a former chief executive of the Midlands East Regional Tourism Authority for many years. I welcome too Mr. Norman Black, whom I have known for many years, and wish him well. He will retire next Friday week and a function will be held at the Bloomfield Hotel in Mullingar.
Mr. Black
We need the bed night.
In case Norman does not see me there on the night, I intend to go, because he is a constituent of mine. Norman has given great service over 38 years, a great record. He did his best, and tourism in the midlands area improved under his stewardship and that of Harry Lynch.
I am also delighted that Senator Kieran Phelan is here. He is a former chairman of the Midlands East Regional Tourism Authority, a very hospitable man and a good advertisement for enjoying oneself in tourism.
That is what tourism is for.
That is what it is all about. My late father, Joe Kelly, served on the same tourism authority for 29 years, so we have a long connection there. I also offer my sympathies to the family of Seán Doherty, a former chairman of the authority. May the Lord have mercy on his soul. Micheál Ó Ceallacháin, deceased for some years, was the previous chairman.
I would like to see a bigger percentage of the money devoted to promoting tourism spent on marketing. I do not want to see, but probably will see, more tourism brochures, magazines or other such material — I have plenty of it here — because the product is good. I know it is so in the midlands. Though the area is not a recognised tourist destination, all those who visit it return. The secret lies in getting people there in the first place. Those visitors I meet are greatly impressed. It may be the hospitality of the people, or the relaxing nature of the area, but people want to return.
My family and I, along with many of my friends, holiday in Ireland, and I have always got the best value, once one takes everything into consideration, including the quality of service, accommodation and product. I can say without fear of contradiction that I have not got anything better anywhere in the world. I have been in countries where certain products were cheap and others expensive but overall there is nowhere better for a holiday than Ireland. That is proven beyond doubt.
No doubt everyone has read McCarthy’s Bar, a fantastic advertisement for Ireland, a true story of a man who came on holidays to Ireland from Manchester, and the way he was treated and looked after. It is amazing that a man can arrive from Manchester, with no Irish connections, and find in Ireland the best restaurants, pubs and bed and breakfast accommodation in the world. They are here, yet some of us seem unable to find them.
If tourism details of the region cannot be accessed on the Internet, one might as well give up. The joking is over. People book everything, particularly travel, through the Internet. Even if people are looking for a pair of socks they will use the Internet. There is no reason we should not have the most modern tourism websites in the world. It was Mr. Pat Crotty who mentioned Internet usage. I hope and expect that the three tourism organisations represented here today have the best and most successful websites in the world. No doubt they have.
Each county tourism organisation in Ireland should have a certain amount of direct funding, because despite offering good service, many of them are struggling, I know the representatives are doing their best and have their hearts and souls in their work. If everyone had their outlook, tourism in this country would be booming. The question is how we get people to visit Ireland. A suggestion I made some time ago was partially followed up. I suggested that those involved in tourism should organise a national weekend of twinning, and give a grant to each club in the country to help it twin with a similar club or organisation, be it social, sporting, cultural or business-related.
The idea was that a modest sum of money would be given to all the chambers of commerce, the regional vintners' associations and to the local soccer, Gaelic, rugby, cricket and hockey clubs so that they would twin with a counterpart, either in the Six counties — which will soon be in the 32 counties — the British Isles or some nearby place from which people would come. We would then try to bring as many of the twinned organisations as possible to Ireland and encourage them to come on the same weekend if they wished. People would then think that Ireland was the place to be and to visit. However, that campaign did not proceed. John Wilson was the Minister responsible for tourism at the time and he opted for the letter and postcard campaign instead.
While we have different facilities in Ireland, people are our main asset, even though some groups specialise in golf and similar activities. Visitors come for a change that one does not get in other parts of the world. They like to come for the craic, to have a chat and a laugh. We do not exaggerate the fact that people are still friendly in rural Ireland. Visitors cannot believe it when, on pulling up in a car to ask for directions, the person then offers to sit in with them.
That was the Deputy's wife.
It has not happened to my wife recently although there are times when I wish it would.
I wish the delegations well. The message is clear that these people know the product is good. However, I cannot believe that the numbers are down and that tourists are not coming. Where are they going? They should come because this is definitely the place to be.
I welcome the delegations and thank them for a good presentation. It is interesting to see the figures, because sometimes we do not pay much heed to them. I come from Boyle in County Roscommon and am chairperson of the Lough Key Forest Park action group. We were part of the lakelands region many years ago and I want to thank them for all they did for us at the time. As an aside, we felt much closer to the lakelands area than to Ireland West. Market forces lead tourism and sometimes we got a better hearing from the lakelands authority, although I am not complaining about Ireland West. I must ensure that Deputy Kelly buys two tickets in advance, in case he does not turn up as he promised.
That is what is being done. One must pay in advance.
I also wish to be associated with the message of condolence to the Doherty family. Seán Doherty was my next-door neighbour and he certainly did everything he could to promote tourism in our area. I pay tribute to all the tourism providers, because undoubtedly, had we stood still, our tourism industry would be stagnant. However, we have come up with some innovative ideas. In Lough Key Forest Park, we received €6 million from the ERDF and it has been designated as a major cluster area. This is welcome because if one does not have investment in certain areas, the tourism sector will be unable to compete.
The joint committee has discussed "rip-off Ireland", which can be a double-edged sword. However, I am in business and am sometimes critical of rip-off Ireland. I have a newsagent's shop and had a bar and restaurant. Highlighting rip-off Ireland has a downside, whereby people think that it is too expensive. However, it has stopped hoteliers, publicans and shopkeepers like me from taking the easy option. There has been a trend in Ireland where overheads such as VAT, the minimum wage — which I welcome — and insurance have increased. For too long over the past five or six years, businesses took the easy option and added the increased costs on top of their margins. Now however, as we have seen with the insurance industry, these are coming down. Indirectly, the idea has helped us to examine ourselves, and the product we promote. It is an excellent product, but we must control costs ourselves.
It was correctly stated that the bed and breakfast sector, which had been welcome in rural areas, is under pressure. Now however, hotels offer a better range of facilities and better value. More than four weeks ago, I asked the Minister if he could examine the possibility of introducing some kind of tax incentive or other scheme, so that the sector might be able to compete. At present, the sector is in serious decline and I do not know what can be done about it. Market forces will sort it out. Perhaps the delegations can examine the issue.
I am worried about the special interest holidays sector, including walking, hiking, angling, gardens and golf. The chart displayed to the joint committee is both remarkable and depressing. Was much investment made in this sector? What exactly is happening? In four weeks' time I go to Slovenia on a walking holiday. I go walking in Ireland as well, but although this market appears to be growing overall, the special interest tourism sector here is not. What is happening and what can be done about it? The funding has been put in and many grants were drawn down. What is happening?
Senator Ó Murchú correctly pointed out that the tourists' profile has changed over the years. Perhaps this is an issue that should be examined. Many overseas workers from Poland, Latvia and other places have come into the country. Perhaps it is time to conduct a marketing campaign to remind such workers that Ireland is a good place to visit and to encourage them to bring their families to stay in Ireland for four or five days. They may not stay in five star hotels but they would at least be tourists. The situation would be similar to that which obtains in respect of Irish people who return here on holiday from the UK and who are counted as tourists but who do not stay in hotels.
The population is increasing and many people are returning from the UK. The Irish diaspora is returning to live in Ireland and uses many facilities. For example, if one goes to Lough Key Forest Park in February, 90% of the visitors are from the UK and live in Ireland, having come "home". Such people appear to be more aware of our tourist facilities and amenities than local people. Perhaps this issue is worth examining. Many such people live in Ireland and perhaps we could run a campaign to bring more of their families to come over to stay. It happens, but perhaps we could make more use of this opportunity.
Infrastructure is another issue. When I go on holiday, I do not wish to hire a car, but will if I must. The cost of car hire has fallen and has become competitive. While it is good to see Dublin doing so well, it affects the areas outside it. Thankfully, extra infrastructure, such as trains, is being put in place. Hence, for example, one has five or six faster trains that enable people to live in Mullingar, take a train to Dublin first thing in the morning and come home last thing at night. For the east coast, the midlands and the south east, this situation should be explored and would certainly help the tourism industry. Dublin will become overcrowded and there is an opportunity for people to stay in the provincial towns and go to Dublin for the day.
How much are the marketing budgets of the South East Regional Tourism Authority Limited, the Midlands East Regional Tourism Authority Limited and the tourism arm of Shannon Development, and have they increased over the years? If they have, is this increase substantial?
There will always be rows over the opening hours of tourist offices, people will want the offices in their areas to be open for longer and every town will want the same tourist office as the other. The woman in the tourist office in Boyle provides a magnificent service. She will talk to whoever comes into the tourist office, come up with ideas and tell him or her to go to Carrick-on-Shannon, Sligo or wherever. We need people at that point of contact who are able to sell the product and keep people busy during the day. If I go away, I am nearly a victim. I expect people to tell me where to go. We sometimes do not pay enough heed to who we employ in tourist offices. One person should be at the point of contact nearly all year round because people will call to get things like booklets. The person at the point of contact sells the product and sells it very well.
I think we have done a considerable amount over the years. We have a very good product and are competing with many other areas outside Ireland. Tourism may not be the serious generator of finance that it used to be and that we wish it was. The reason for this could be that we are not as hungry as we used to be. However, we have come on in leaps and bounds in providing a very good tourist infrastructure. I congratulate the tourism bodies present and wish Mr. Black well in his retirement.
I thank my committee colleagues. There has been a significant amount of comment and a number of questions posed so I will let participants pick up on salient points and we will go back through the three regions.
Mr. Crotty
I was hoping that the Chairman would begin at the beginning because she raised the point with regard to the Internet and the packaging of products for it as the first point. The committee will have to ask Tourism Ireland and Fáilte Ireland to explain their positions on this issue. Tourism Ireland is responsible for promoting the island of Ireland abroad while Fáilte Ireland is responsible for promoting the Republic of Ireland, but it does not go as far afield as Tourism Ireland. Individual operators, counties and regions or clusters of products can piggyback on the regions, Fáilte Ireland or Tourism Ireland in regard to how far they want and can afford to pitch their message.
One of the easiest ways to afford it is to have a very cost effective Internet facility. It should be possible for people to make their own packages. If we were to try to make packages for every potential permutation of what a customer might one day want to buy, one would have such a website that one would never get it launched because there would be so much building to do. The website should be built in such a way that it is easy for a customer to buy anything, in the same way that it is easy for a customer to go on to the website of any of the superstores, for example, Tesco, and buy anything they want. They do not need a deep knowledge of computers and buying to do so.
People who operate groups of hotels per se or even groups of bed and breakfast establishments who operate together can decide on the Monday of any given week that the weekend is going to be quiet or they have very little trade so they can pitch a price on the Monday which will attract people to buy that weekend and fill a slack time through being advertised on the Internet. This, for the most part, is not happening through Fáilte Ireland and Tourism Ireland. It is too cumbersome to put up-to-date prices on their websites or to keep them up to date.
It should not be like that. If a single hotel group or a bed and breakfast group can do it, everyone can do it. It should be possible to reach the place one wishes to book for one's accommodation by going to that day's offers. The level of categorisation in websites should deal with a customer looking for a good value establishment for this evening and willing to pay €50 for it. This level of categorisation provides such a customer with the opportunity to view products from throughout the country. He or she does not even have to buy from a particular region at that stage. The customer can simply enter the level of categorisation. This is the level that we must reach.
Other people have asked why more people do not come to Ireland or why certain groups do not visit Ireland anymore. We are now competing with at least 200 other countries who are getting their act together. I can buy a holiday anywhere in the world at home tonight. We had a presentation in the south east by Tourism Ireland and I carried out that research myself. I put myself in the shoes of an English or American person and asked myself what information he or she would enter on a website if he or she wanted to come to Ireland. He or she might just enter "Ireland vacation" or "Ireland". One must use his or her language. If he or she entered "tourism Ireland", even if he or she hit it by accident per se, Tourism Ireland would not the first website that would come up on the Internet, which is a problem. Tourism Ireland and Fáilte Ireland must be the first hits and the first doorways to Ireland for people searching on the Internet and they must be easy to buy from. That is what both these organisations must do and that is what we in the industry are asking them to do.
I will not go through all the points but I will address Deputy Deenihan's comments. He, and several other members, spoke about Dublin. While the city has always had a quality product in terms of a beautiful ambience and considerable facilities, both in terms of culture and built heritage, it is the advent of cheap and convenient access through Ryanair and the other airlines, such as EasyJet, which followed it into Dublin Airport that fuelled the growth in visitor numbers to Dublin. In saying that, I mean no disrespect to Dublin Tourism. This was echoed in terms of what is happening in Shannon this year. There is no doubt that it is the convenient and reasonably priced access by air that is making it happen.
I can also vouch for that in the sense that for the two winters after the events of 11 September 2001, there was an enormous growth in the number of Irish people going to shop in the US in October and November. In my premises, I always ask people who look unusual about their reasons for visiting Ireland, such as how they got here and why they are visiting Kilkenny at odd times of the year. Young wealthy Americans come to Ireland at such times because they avail of the cheap return journey. Many more of them would visit Ireland if we increased capacity because many more Irish people want to go to the US, whether for winter breaks or shopping.
I do not care what people's reasons for visiting the US are as long as we fill the returning aeroplanes with Americans who are big spenders when they visit Ireland and who, when they return home, tell all their friends about their experience in Ireland and how good it was. This can be done and price is the driver out of season. Customers will get matching value in accommodation and all the other products that are available for them at that time of year. That is what the trade needs to be able to sustain its staffing and everything else that goes with it through the winter season.
Deputy Deenihan mentioned the proximity of the south east to the UK and how that should help us. The greatest difficulty we have with regard to the UK market, and the UK was even more significant to us than it is now, is that there is a huge decline in the ferry trade. Ferry travel is becoming very unattractive by comparison with air corridors because of the time factor. For someone living in Cardiff, it is nearly a day's travelling to get somewhere in Ireland by the time he or she gets to the port on time, makes the ferry crossing and drives on to his or her destination. It is the same going home. If people's propensity is for shorter breaks, they will use up the bulk of their break just by getting to their destination by ferry. This is a major problem.
An idea that we floated at our annual general meeting involved restoring some form of duty-free facility to cross-channel ferries. It would make a difference because there is no fall off in duty-free trade. Possibly it is illegal in terms of EU law but we have found ways around many problems before. This is certainly the case in other industries. There is huge growth in the number of UK travellers travelling to France for duty-free shopping. While France is still expensive, UK travellers can buy their wine duty free. The restoration of duty-free sales on cross-channel ferries would certainly improve the attraction of ferry travel.
Senator Phelan and other members of the committee asked about our thoughts on the PricewaterhouseCoopers report. This gives security to the regional tourism companies. Since I began my time as a member of the board of South East Tourism in the early 1990s, we have had a hand to mouth existence in maintaining and sustaining tourist offices or in having a marketing fund to improve our capacity to market better in the future, to link better with Fáilte Ireland and Tourism Ireland and to have an input into how they market the regions. That is all built into the new process. Senator Kieran Phelan might agree with me when I say as chairman of the Midlands East Region Tourism Authority that we had a forum of the chief executives and chairmen of the six regions that was a cul-de-sac. Only by request could we get the consensus from that group brought to the attention of Bord Fáilte, as it was then, or to see the Minister. There was no link to the Department or the agencies. It was a "by your leave" situation, so to speak.
The link between the new regional partnerships to the national council is directly built into the process. Unless the structure feeds into policy and into the operations of Fáilte Ireland and Tourism Ireland, its existence has no point. This is the great difference. The situation is not one of Fáilte Ireland deciding how it will represent us, what it will do and how much money it will throw at us to give us a small flag to wave. We have become a part of the entire process. While there are no boards, industry and local authority inputs are still present. The linkages are important. While operators in the tourism industry may think they own the industry, the counties are owned by their citizens. The local authorities are the bodies that hold the counties in trust and are responsible for their images, brands and so on. As I said in my initial contribution, that image and branding is important in domestic tourism which remains a significant part of our business.
Senator Ó Murchú is a former member of the board of South East Tourism. As others have pinned their credits on the wall, we should give him his. I agree with the Senator that affluence has affected our industry. Many Irish people are now able to make a good living. Tourism was considered a good earner for people and arguably still is. The people who work the hours and make careers out of the tourism, catering and hospitality industries, such as hotel and bar managers who have served their time, have good jobs. However, their jobs are unsociable. Many people who have the intelligence to progress that far also have the wit to realise they can now make as much money in another industry where they will work 9 a.m. to 5 p.m. for five days a week and have a good quality of life.
This is a problem that cannot be addressed simply by paying people more to make their jobs worth their while. As Senator Kieran Phelan mentioned and as I said earlier, the difficulty now is that we are reaching a profitability crisis. Volume is holding but yields are down. In other words, rooms are being sold for less, price increases are not being made and costs are being absorbed. There comes a point in cost absorption where one's profit is entirely absorbed. A great deal happens before one reaches that point, such as dips in quality, service, training and community involvement. One's capacity to continue supporting the worthy causes in one's town or county, be they charities, clubs etc. takes a dip. If we do not arrive at some understanding of the fact that all our competitor countries charge VAT on food at 5% or 7% while we charge it at 13.5%, what will happen will be of serious concern. Other countries charge the same levels on their drink and accommodation whereas we charge 21%.
Something must give somewhere. Were this the only difference, perhaps we could accommodate it somehow. However, all our charges are out of kilter. Other countries with minimum wages have the rate set somewhere between €2 and €4. Ours is set at €7.65 as of 1 June 2005. Other charges, such as those made by local authorities, are also out of line. This situation cannot last. Local authorities say they must charge because they have services to provide. Members of the business community, therefore, are the only ones paying for this. The State tells the authorities to provide the services and at what standards to do so. The State should fund this through some other form of taxation or out of the general fund. Only one community is picking up the tab at present.
Mr. Black
On the matter of the location of the east coast and midlands near Dublin, this should be an advantage in theory but is a two-edged sword in many ways. The chairman of South East Tourism referred to the car ferry business. While the increasing number of flights are welcome, the car ferry business is suffering as a result. Coming to Ireland by ferry or hiring a car for a short break is probably more expensive than travelling here by air. The net result is that, of the increasing number of people who arrive in Dublin by air, few will hire cars and there is little opportunity to get them to come out to the east coast, midlands or further afield. We must continue to place more emphasis on supporting the car ferry business in marketing activities and so forth as doing so will benefit all the regions and not just the east coast and midlands.
The developing motorway network is welcome but will mean in a few years that it will almost be possible to drive from Dublin to Cork or Dublin to Galway without passing through any towns or villages, which will be a serious disadvantage to the midlands and the eastern half of the country. We would welcome a relaxation of the National Road Authority's signposting regulations without opening the floodgates that would lead to a plethora of signs. Many tourist attractions and business premises are losing considerable amounts of business as people do not know about them or cannot find them when they are bypassed. We must examine this issue.
The bed and breakfast business has declined by approximately 20% in the east coast and midlands regions. For many years, this business was the backbone of the tourism industry and we must worker harder to support it. Many of these bed and breakfast facilities are in the more out of the way locations, which is an increasing disadvantage due to restrictions on drink driving and so on. When I first started in this job it was an advantage to be out in the country. Now, the nearer one is to a town or a centre with facilities, the more attractive it is. We must move bed and breakfast accommodation into clusters, which we are trying to do, and encourage those involved to link in with other recreational and amenity facilities in their localities. A bed and breakfast providing accommodation and perhaps not even offering meals is no longer adequate. I know that various Ministers have rejected this option over the years but there is a case to revisit the idea of some form of registration for all forms of accommodation as it would be helpful.
I agree there is an issue regarding pricing but it can be exaggerated. Our accommodation, particularly in hotels, is very good value in comparison with the UK and mainland Europe. As Senator Ó Murchú or someone else mentioned, the press in the UK has picked up on the excessive publicity our tourism industry received in 2004 and 2003. This has been very unhelpful. There is probably no easy solution and I am not suggesting that we try to muzzle the press in any shape or form but it is one of the factors that has damaged our industry by creating a bad image of Ireland in the UK. That is something we must recognise, irrespective of whether we can do something about it.
Special interest activity has been referred to. There has been a decline in this area and the people from Shannon Development mentioned the need to upgrade our special interest facilities. Some form of modest grant will be needed. We need to provide what the market requires. While there is a role for long-distance walking, looped walks of three to four hours are in demand rather than a week of walking. We need to provide funding for a range of these to be developed and for long-distance walks to be upgraded. There are problems regarding accessibility in many areas but I do not want to get into that.
There has been a drop-off in angling numbers in the UK. It is a declining sport although there are some indications that more young people are beginning to come back into this leisure activity. Coarse angling has been very important for many parts of the midlands, the Shannon basement and the Erne basement. There is a need for facilities to be upgraded. Funding was allocated ten years ago but many of the access stands and stiles have now become quite dangerous and funding must be made available for refurbishment. We need to be more innovative, not necessarily by bringing in new products but by repackaging in innovative and imaginative ways. Much can be done and things are starting to happen. In my region we are bringing together clusters of people in seven special interest categories to assist smaller operators to get their product to the market in a cost-effective manner.
I refer to hotel development which has been particularly beneficial for the east coast and midlands. Senator Kieran Phelan referred to the British market, the growth in which has benefited Dublin. There has been a drop in numbers coming to the rest of the country. Visitors have been coming to Dublin for short breaks. In many of our larger towns we now have facilities such as good accommodation and cultural and festival activities. We can build on this although there is a long way to go. The grant scheme introduced some years ago in this area has been enormously helpful in this respect. We plead that this be increased further as it has enabled local communities to put on quality cultural events that enable us to market urban and rural areas. I would like to see that put forward as a suggestion from the east coast and midlands regions.
We have spoken about the negative aspects but there is much that is positive. The product is very strong, better than it has ever been. The area was not considered a prime tourist destination for a long time but with quality facilities, such as accommodation, we can match the best in Ireland or the world. We should not talk ourselves down, as we are inclined to do. Faraway hills are not always greener and we have much of which to be proud. The PricewaterhouseCoopers report recognised the need for more co-ordination and not just between the RTAs, Tourism Ireland and Fáilte Ireland, but between county tourism and other groups. This will be a big step along the way and will enable the regions to have more input into what is needed to deliver better regional activity in tourism.
Mr. King
I thank Deputy Deenihan and the other members for their kind comments on Shannon Development. Deputy Deenihan asked about the 2004 figures for north Kerry but we received the topline figures for 2004 in the last week or so and do not yet have a breakdown of regions. We will forward the information to the Deputy over the next few weeks. He also referred to the focus on domestic business. We see more of the major operators doing this. An example is the Bunratty folk park in mid-Clare. A lot of work is done on Christmas events, Santa Claus, Easter, harvest days and Halloween. They are bringing in several thousand domestic visitors to that folk park who would not have gone there as tourists. This is something we need to do more of.
On grant support, the trend we are seeing will result in the scheme being phased out, or very little money being available in 2006-12. If there is to be spatial development and incentives for that we may have to consider tax-driven schemes so that investment for tourism development can be encouraged across the country. That will require more discussion. The PricewaterhouseCoopers report felt that Shannon Development's operations in tourism were something to work towards. We welcome the idea of taking a strategic, co-ordinated view of tourism, to put in additional resources into the regions to develop the trade. I expect there is more to be done on negotiating the implementation of the PricewaterhouseCoopers report. I wish Mr. Norman Black good luck and endorse his comments. We recently went to Brú Ború with Senator ÓMurchú and some of his people. We received excellent hospitality and I recommend it to anyone who has not been there.
Mr. Leonard
I have strong views on the Internet and on what needs to be done. I also recognise the positive aspects and the vision that exists. Across the regions seven content editors will contribute to websites that feed into a national database and this will be reflected through the website www.ireland.ie. We each have the power of taking an individual product and distributing it to the Irish marketplace. There is a gap in getting it to the international marketplace but there will be an alignment between Tourism Ireland, Fáilte Ireland and the regions in 2006. When we populate our websites the content receives an airing across the world. We have opened a massive distribution channel and I am confident this will happen. At the moment every trade can include an offer on the www.ireland.ie website and it is automatically reflected to the regional website. This process is a little cumbersome but it is being refined. We are achieving our goals but at a slower pace than I would wish.
There is no doubt the change at Shannon will happen. The timing must be decided but we are convinced a transition is needed. This will change the pattern of travel. North American business is very important to western regions, Ireland west, Cork area and the Shannon region, as it filters through Shannon. It is very important as they get more through the Shannon gateway than through the Dublin gateway.
If one considers the figures for the British market that is where the real hit has been taken. Of the 3 million bed nights lost, over 2 million have been lost from the western market. Ireland benefitted from low cost access such as the Ryanair model coming into Ireland. From the UK that opportunity now exists to many more destinations so we are operating in a more competitive market. The findings of the very good research undertaken by Tourism Ireland are frightening. Ireland does not appeal to families with younger children and is viewed as male-dominated. The research is critical as it suggests the answers. We must provide compelling reasons for tourists to visit and we must package and communicate them more effectively in the same way as we have improved access from that market.
I will make one final point on surveys carried out to research the needs of tourists. The new air services into Shannon bring a new type of visitor who has no previous exposure to Ireland. We are undertaking some preliminary research to identify what their expectations were before arriving and the gaps they found between those and the reality. We will look at expanding that research programme, depending on its outcome. It will give us consumer feedback that might inform potential investors.
Mr. Palmer
I do not wish to respond to any point but on behalf of all of us appreciate the extended length of time the committee has given to hear us. We are all impressed with the depth of questioning and the committee members' awareness of tourism and its problems.
I have one question.
If the Deputy wishes to speak to the delegation, he may do so after the meeting.
I waited long enough and wish to ask one question. How much must each group spend on marketing?
They may not have the information with them and may forward it to the committee.
They probably have it with them.
Mr. Palmer
The marketing spend in the south-east region this year will be less than last year by approximately €100,000 because we are penalised for our success in relative terms. I do not wish to be parochial.
To return to my final point, at the outset the Chairman spoke on the regions fighting with each other. We are in competition but speak with a common voice. The way forward for us all and for Irish tourism is through the PricewaterhouseCoopers report. If we all move in that direction and put our energies and resources together, we can do the job for Irish tourism.
We find it an important exercise to invite each region and we are glad that most of them speak with one voice because it makes it easier to find positive solutions. We ask many questions and I appreciate that individual questions can get lost, but the exchange is important. Much information is contained in the presentation given to the committee and we appreciate the time the delegation took to prepare it.
I agree with Mr. Palmer that the committee concentrates on negative aspects of issues, but it does so because its role is to find ways of making improvements. That said, I know each region has tourism success stories. We can go from strength to strength but it is better to do so together. I guarantee that the information given to us today will yield questions for us for Tourism Ireland and Fáilte Ireland and we will forward the comments made by the delegation to the Minister who is ultimately responsible for decisions taken on the PricewaterhouseCoopers report.
The joint committee adjourned at 6.25 p.m. sine die.