JOINT COMMITTEE ON ARTS, SPORT, TOURISM, COMMUNITY, RURAL AND GAELTACHT AFFAIRS debate -
Wednesday, 8 Oct 2008

Role and Functions: Discussion with Fáilte Ireland.

Chairman

Ba mhaith liom ar dtús báire fáilte a chuir roimh an toscaireacht ata anseo inniu thar cionn Fáilte Ireland — an phríomh-fheidhmeannach, Mr. Shaun Quinn, agus Mr. John Concannon agus Mr. Brian Maher atá ina theannta. Gabhaim buíochas leo as ucht teacht anseo tráthnóna chun muid a chuir ar an eolas maidir le ról agus feidhm Fáilte Ireland. Ar dtús, beidh deis ag Mr. Quinn cur i láthair a dhéanamh. Ina dhiadh sin, beidh deis ag na comhaltaí éagsúla ceisteanna a chur ar na feidhmeannaigh.

I welcome the Fáilte Ireland delegation led by Mr. Shaun Quinn, chief executive officer, who is accompanied by Mr. John Concannon and Mr. Brian Maher. I thank them for coming before the committee to share their thoughts on the role and functions of Fáilte Ireland. Mr. Quinn will make an initial presentation after which the members may ask questions which will be grouped, taking approximately three members at a time.

Mr. Shaun Quinn

I thank the members of the committee for the opportunity to discuss our work in the context of the development of tourism in Ireland. I have prepared a short opening statement which may guide the context for any discussion. Members will be aware that Fáilte Ireland was established under the National Tourism Development Authority Act 2003 to guide and promote the strategic development of tourism as a significant driver of the Irish economy. In practical terms, this involved a merger of the former Bord Fáilte and the then tourism training agency, CERT. In 2006, we were involved in a further merging of five of the former regional tourism authorities, RTAs, providing additional resources at regional level as well as a stronger local voice at national level.

Over that time, the organisation has undergone considerable change in terms of the range of services and supports its offers to industry. In essence, our work falls under five broad headings as follows. We support tourism enterprises through management and executive development, training for employees and new entrants, providing consultancy and advisory supports, and promoting quality and standards. In other words, we work with companies. We stimulate and support product development, from providing capital investment support — grants if one likes, market intelligence and project feasibility analysis, through to attracting, promoting and co-funding cultural and sporting events with tourism potential. Although it is not terribly easy, we work hard to improve the spatial spread of tourism across all regions through our development of the home holiday market, our funding of targeted regional-specific marketing programmes overseas, and more recently through our implementation of regional tourism strategies as agreed by our regional boards.

As a prescribed body under the Planning and Development Acts, we have a particular focus on the sensitive development of the natural and built environment, which we take very seriously. In this respect, we issue guidance and advice to local and regional authorities as well as stating opinion on specific developments that may impact on tourist amenities. Our final area of activity relates to our role in attempting to influence aspects of public policy that could impact on the development of tourism and its position as a leading indigenous component of the economy. Tourism sustains approximately 250,000 jobs and brings in €6.5 billion in revenues accounting for 4% of GNP. It is not an insignificant component, as I know members of the committee are aware.

Until this season, the tourism story of this decade had been one of sustained growth, both internationally and domestically. Annual targets for overall visitor numbers as outlined in the report of the tourism policy review group have been attained and in some cases exceeded. Revenue growth was more modest by comparison, reflecting the growing international trend to shorter breaks resulting in less time to spend money. A further significant impact of this international trend has been the growth in urban tourism at the expense of rural and more regionally based tourism. This is a worldwide trend. Consequently, despite the growth of tourism at a national level, the spatial distribution of that growth remains a key challenge. Therefore, not all regions have benefited to the same extent. Similarly, not all sectors have benefited with hotels generally doing well and other sectors like traditional bed and breakfasts doing less well.

Over this period, our strategy to boost the fortunes of regional tourism has been to invest heavily in the domestic market, which accounts for two in every three hotel rooms booked and has grown by nearly 40% in the past five years. Our promotions have been strengthened by partnership programmes featuring individual counties, hub towns and events. That strategy has paid off pretty well. In addition, we have provided ring-fenced funding for regional-specific marketing in key overseas markets. We have also invested heavily in funding many cultural — almost 400 — and sporting events across virtually every county. More recently, we have invested approximately €26 million in improving tourism-related infrastructure across 27 local authority areas under the NDP in an attempt to fix parts of the tourism product that were probably neglected in previous programmes in the areas of angling, walking, cycling, beach management, environmental management etc.

This year, the significant shocks in the international economy have resulted in a much softer tourism performance since mid-year. I am speaking at a time when we do not have official statistics to provide this data authoritatively. However, we know this from our surveys, CSO data to the mid-year and industry sentiment. The euro exchange rates with the US dollar and sterling have adversely affected our competitive position in two of our key markets, the United States and Britain. This negative outcome has been reinforced by weaker consumer confidence, about which we hear every morning, in both Britain and the US. However, the mainland Europe market and the domestic market appear to be holding up well. We reckon this weakening kicked in from the middle of the year. The first half of the year was reasonable — better than some of us expected. We have seen a significant weakening in volume terms in June and July.

At the same time, competition within the industry has intensified further as capacity continues to increase. I am focusing particularly on the hotel sector where we estimate that bedroom supply has grown by 10% this year and that actual room numbers at 60,000 are twice the level they were in 1998. The combination of weaker markets and increased supply at home has generated an associated pressure on prices. The other key feature we notice this year is the parallel sharp increases in costs. Most people within the industry with whom we engage point to the issue of costs and not to what is happening in the marketplace which, they recognise, is outside the control of the industry and the Government. Sharp increases in wage costs, energy costs, food costs and particularly local authority charges have further squeezed profitability. These economic circumstances have necessitated a shift in our activity. We have expanded our range of practical business supports. We are focusing on cost reduction, business efficiency, e-business and improving customer service. Over the last two or three years, most of the people in the trade were looking for marketing support. Now they are trying to contain costs in the current difficult situation.

We are investing more in marketing our golf product, our conference and incentive travel and a range of other areas of special interest pursuits. In light of the difficulties overseas, we need to sustain our investment in the home market, which offers a ray of hope for the coming year. We do not expect the domestic market to enjoy the double-digit growth it has seen in previous years. It is an area of potential for 2009. We cannot take our eye off the longer term. Fáilte Ireland was established with a focus on the long-term development of the industry. Our analysis indicates that while there is sufficient bedroom capacity in Ireland, there is a need to invest strategically in new and existing visitor attractions and activities. Under the national development plan, our goal is to make grant aid available to facilitate the development of a small number of iconic attractions of international appeal, while trying to upgrade this country's top 20 or 30 existing attractions. This work is commencing. We are also working to attract a small number of large international events with a strong tourism appeal, building on the success of the Ryder Cup. For the second time, a round of the World Rally Championship will be held in Ireland in the new year. The rally will again be organised on a cross-Border basis. The event is particularly significant for a part of the country that does not tend to benefit as much as other regions from tourism. There is a political dimension to the event too. It is very good from the point of view of cross-Border co-operation. The Round the World Yacht Race, which involves international media exposure, will come to Galway next May.

In addition to increasing Ireland's profile in the international media, much of our effort remains focused on meeting the development needs of small tourism businesses. That is our bread and butter. Successful tourism business networks are operating in virtually every county. We are working closely with sectors which are experiencing particular difficulties and market challenges. This includes the bed and breakfast sector, with which we are finalising an action plan. As expected, 2008 has proven to be a difficult tourism season. It seems that 2009 will be as difficult, given what we know about the economies of our key source markets. However, we can take solace from the inherent resilience of the industry, which has been through a number of shocks over the last ten years. The sound investments which have been made by the industry in recent years augur well for it to be in a position to take advantage of the upturn when it comes. I hope these comments have been useful in framing our discussion. My colleagues and I will be pleased to explore these and other issues with the committee.

Chairman

I thank the chief executive for his overview. I invite the members of the committee, starting with the Opposition spokespersons, to ask questions. I ask Deputy Olivia Costello to begin.

Deputy Olivia Mitchell

Who is she?

Senator Jerry Buttimer

That was a Freudian slip.

Chairman

I meant to say Deputy Olivia Mitchell, of course.

Deputy Olivia Mitchell

Who is Olivia Costello?

Chairman

I will tell the Deputy another time.

Deputy Olivia Mitchell

I am not sure I want to know.

I welcome Mr. Quinn and his colleagues from Fáilte Ireland. I thank them for their presentation. They are right to point to the importance of tourism for the Irish economy. As the tourism industry accounts for 4% of Ireland's gross national product, it is bigger than the agricultural industry. I appreciate that those who represent farming constituencies will not admit that is the case. Like farming, tourism is of great importance to this country's regions. The economic growth of the future will come in the services sector, rather than in the manufacturing or farming sectors.

Tourism is an important service. I am conscious that it is going through a difficult time. I think it will get much worse. We need to change our approach to the tourism industry. I am pleased to observe that a focus is being placed on specific activities such as walking and cycling. I have noticed this approach in my local area. Coillte lands are being used. Such a strategy will help to attract people in the future. It is certain that few people will come here for the Irish weather. We have to try to target people who are not necessarily susceptible to declines in personal discretionary income. When American families look at the price of the dollar and the cost of living here, they will decide not to come here. It may be possible to get people to come here to play golf or attend business conferences. There will have to be a huge change.

As someone who is relatively new to the tourism portfolio, I have examined the industry over recent times. I am concerned that so many bodies are charged with delivering the tourism product in Ireland. I refer to bodies like Fáilte Ireland, Tourism Ireland, Dublin Tourism, the regional tourism bodies, the tourism wing of Shannon Development and the many local authority bodies which are involved in this sector. While the regional tourism bodies are part of Fáilte Ireland, in theory, they operate largely autonomously.

Do the representatives of Fáilte Ireland believe that the organisation of tourism marketing and provision is organised in a way that offers the best possible value for money? I appreciate that may be a difficult question to answer, as it is hard for someone who is part of the status quo to be objective. Could the tourism product be delivered better in any way? There seems to be a great deal of overlap between the various bodies. Is the current approach producing the best possible outcome? I do not mean to seem critical of any of the tourism bodies. Is there an overlap between CERT and FÁS? Is it possible that the work being done by CERT could be done by FÁS? I know this is not the question the members of the delegation want to hear. It is a question that has to be asked of everybody in the current climate. Value for money will be absolutely crucial in the years to come. If we can deliver a better outcome for tourism in Ireland by arranging things in a different way, we should do so. I accept that it is an unfair question, but it has to be asked.

Senator Alan Kelly

I welcome my former colleagues to today's meeting. I spent almost nine years working for Bord Fáilte and Fáilte Ireland before I took early retirement for certain reasons. I think I was the youngest person in the history of the State to take voluntary redundancy. Rather than going through a narrative, I will save time by asking some questions. I expect that the witnesses will not be able to answer all my questions. This committee has received delegations from the GAA and other organisations in the past. When people are unable to answer questions at committee meetings, they usually submit specific answers to the committee within a week. I do not expect those present to be able to answer every question that is asked today.

As the Labour Party's spokesman on tourism, I am aware that tourism is an essential part of the economy. I have argued for a long time that its impact is underestimated. The impact of tourism in Ireland is colossal. Significant ancillary benefits are gained from tourism, especially in rural areas. Tourism contributes substantially to the economies of such areas. Many sectors of the service industry depend on it. We need to ensure that we continue to promote it, particularly in the current economic climate. It is important for this committee to bear in mind that the strength of the tourism budget needs to be maintained. Tourism will be of even more significance in rural areas in the future.

The promotion of domestic tourism by Fáilte Ireland has been a shining light. I have been impressed by the change of style in that regard. I disagree with some of the focus of certain campaigns, however. Emphasis has been placed on the south east and other areas. We need to address the problem of the "hole in the doughnut", a phrase with which our guests will be familiar. In this case, it refers to the fact that tourism in the midlands does not get a bang for its buck. Innovative product development and marketing will be needed to tackle the problem.

I commend Fáilte Ireland on the fantastic research and statistics it provided and on which Mr. Maher has been working for years. Several people have raised questions about certain shareholdings held by Fáilte Ireland, including in golf clubs. Will our guests provide a list of shareholdings or interests Fáilte Ireland holds in other organisations or businesses? It is appropriate that the joint committee examine whether it is appropriate for a State agency to engage in supplementing certain products. The questions raised about Fáilte Ireland's role in this may not be justified but greater transparency would be helpful.

While I do not propose to dwell on the controversy surrounding Killarney Golf Club, which is the subject of legal proceedings, the matter must be brought to a conclusion in a satisfactory manner as it has been ongoing for some time. Will our guests indicate what shareholding Fáilte Ireland has in the golf club? I understand it holds a specific type of shares. Progress must be made in finding a resolution to this problem.

We have heard considerable comment on the Irish Open golf tournament, in which Fáilte Ireland invested €350,000 last year. Doubts have been expressed about whether the competition will take place in the next year. What is the current position? Will it proceed and will Fáilte Ireland need to increase its contribution to the event?

I understand the sponsorship of Padraig Harrington to promote Irish tourism worked out at about €75,000 or €80,000 per annum, which must be considered a financially sound investment. In an example of brilliant timing, however, the contract lapsed just before he won the British Open and US PGA tournaments. Why was this decision made and will it be reviewed? Was it taken on purely financial grounds or were other factors involved? Deputy Upton will comment further on this issue.

As previous speakers noted, questions have arisen about the overlap between the roles and functions of Fáilte Ireland and those of Tourism Ireland. I was a member of the group involved in merging the Northern Ireland Tourist Board and Bord Fáilte into a single North-South body. In a typical Irish solution when we merged two organisations we produced three new organisations. This will have consequences in terms of overlap. For example, there is some duplication in the area of business tourism and product marketing and, by necessity, in administration. I accept, however, that this is a two-way street in the sense that Tourism Ireland and Fáilte Ireland both dip into the other's remit. I note, for example, that Tourism Ireland has announced research findings and held symposia and industry facing events. The joint committee will need to investigate the overlap between the two organisations.

Questions have arisen about internal matters in another State organisation. In referring to this, I am not suggesting anything untoward has occurred in the case of Fáilte Ireland. Has performance management been successfully rolled out throughout the organisation? Is it implemented in a top down or bottom up manner? In the current economic climate it is vital that this work is done properly.

Fáilte Ireland has a small but significant art collection which, I understand, includes pieces by le Brocquy and Scott. Who owns these art works? If Fáilte Ireland, rather than the State, owns them, does it intend to retain them? I understand the collection is worth a significant amount and art works held by other organisations were sold recently.

Fáilte Ireland has two offices in Dublin, one in Amiens Street and the other in Baggot Street. How many people work in the Baggot Street office, which has been vacated? Will the office remain open and, if so, for how long? How will the taxpayer get bang for buck if it is decided not to keep the office open and the long-term lease is sold? I understand the rent on the building is nominal by modern standards because it was bought for the State by Irish Life when it was a State body. Clearly, the building has a substantial value, although that may not appear to be the case on the books of the current owners. What is the position regarding the building on Pembroke Row? For how long was rent paid after the building was vacated in 2007? Have rent payments ceased?

What is the relationship between Dublin Tourism and Fáilte Ireland? Are regular executive meetings held between senior managers of both organisations? Dublin Tourism and Shannon Development are different from their counterparts in other regions and questions arise in this regard.

What progress has been made on decentralising Fáilte Ireland to Mallow? Has a site been found and is a working group in place? When does Fáilte Ireland expect to move?

I compliment Fáilte Ireland on its decision to involve itself in the area of planning, in which is has a statutory role under the Planning Acts. It should avail of its right to intervene in planning matter more often. Those who work in this area are performing a valuable function.

I oppose the decision to deregulate the self-catering sector. I made my opposition to this move clear when I was employed by Fáilte Ireland and continue to believe the decision was wrong. Self-catering is the main contributor to the accommodation bank in rural areas. Despite the arguments made at the time, the sector is not presented in the same manner as other accommodation.

Chairman

I ask Senator Kelly to focus on asking questions.

Senator Alan Kelly

Why was funding allocated recently for heritage projects administered on the basis of council areas? As a result, towns such as Killaloe and Roscrea were overlooked? Has progress been made on promotion of food as a product? This area has not received the attention it deserves. Reports on the development of a number of attractions were to have been ready by the summer. What is the position in this regard?

I encourage Fáilte Ireland not to confine promotional activity to tier one and tier two festivals. Smaller festivals — tier three, four and five — are vital for the promotion of rural areas. We cannot concentrate on the top 30 or 40 festivals. I thank the Chairman for indulging me.

Deputy Cyprian Brady

I welcome Mr. Quinn and his colleagues and thank him for his presentation. My experience in the constituency of Dublin Central is with CERT and the contribution that has made locally and nationally to the standards of service and management in hotels. I congratulate those involved because in recent years it has contributed significantly to the industry.

I accept recent years have been especially traumatic for staff and management within the organisation. Will Mr. Quinn indicate whether the merger has worked and if it is effective? To follow on from Deputy Mitchell's point on where we can go from here, is there further scope to absorb other bodies?

In recent years there has been a significant increase in the number of beds available around the city. Reference was made in the opening remarks to the fact that the competition for business has put pressure on prices. Anecdotally, it appears that some of the larger hotels around the city tend to over-price, and that overcharging has occurred especially when major events take place. Will Mr. Quinn comment on that?

Significant efforts have been made to increase the potential of specialty tourism such as angling and golf holidays. Those pursuits are weather dependent. Where do we go from here? Angling is a major sport around the world. Are we doing enough to attract our fair share of that market?

Tourism Ireland has concentrated recently on the Middle East and the Far East to attract tourism from those areas. What role does Fáilte Ireland see itself as having in that regard. There is a large market in the Far East for example.

In recent years we have had suggestions about casinos and at one stage a version of Disneyland was to be located in north County Dublin. What does Fáilte Ireland have in mind in terms of a major attraction that would attract people from all over the world?

I congratulate Fáilte Ireland. As Mr. Quinn stated, the tourism industry is relatively stable because of the effort put into its management and it is to be commended on that.

Chairman

I will hand back to the representatives from Fáilte Ireland. I would prefer that no reference is made to issues with legal implications. Mr. Quinn may be unable to answer some questions. No group could have the answers to the specific questions asked by Senator Kelly who worked in Fáilte Ireland and who understands more of the detail than other members. Mr. Quinn should feel free to come back to the committee at a later stage with replies.

Mr. Shaun Quinn

I am happy to respond to as many of the issues as possible. Deputy Mitchell inquired about structures in the organisation. It is not an easy question to answer when one is on the inside looking out. As an organisation we are not afraid of change, we have been through a great deal of it in the past five or six years. The CERT component of the organisation, which operates in conjunction with FÁS to which she referred, is changing from what it was doing in the past three or four years as those activities were put in place at a time of high unemployment. At that time one could train people from the live register and put them into jobs but that has changed. What we find now is that there is an acute need to go out into the industry and train people who are already in jobs. Last year we began to send our instructors into the industry and that programme will be accelerated next year. That is an example of the need for us to change with the times.

Tourism is one of the industries that seeps into every parish in the country. It is not possible to have one or two bodies looking after it. I find, increasingly, that it is important to get better co-ordination across the spectrum. For example, we work intensively at the moment with local authorities, which I consider to be right and proper as that is how government is organised at a local level. Historically, there was not a great relationship between national agencies and local government, which was wrong, especially in the tourism context. We set up the regional boards and county councillors and county managers sit on them. We influence each other's plans. I would not rule out any structural change whatsoever. All I can assure the committee of is that we are changing but not for the sake of it, we are changing in response to the needs in the industry as they arise.

As to whether we would start today with a blank page with what one has, perhaps not, but that is what we have and we must make the best of it. I do not have a lifetime's experience in the tourism industry but since the 1960s there has been a gradual streamlining of all the support services in tourism and I imagine that will continue. One does not tend to get the fragmentation that existed previously.

Deputy Olivia Mitchell

I appreciate it is difficult for Mr. Quinn to answer the question but making the best of what we have is not really maximising the value of what we spend. Mr. Quinn said he had to make the best of it and I appreciate that is what he has to do from his perspective but from the perspective of Government we must have the structures that give the best bang for our buck. I appreciate the origin of Tourism Ireland and that it is a North-South body but things have moved on. There must be huge overlap even in terms of administration alone. I do not expect to get Mr. Quinn to recommend amalgamation.

I appreciate that working with local authorities is absolutely essential but then there are regional bodies such as Dublin Tourism and Shannon Tourism. I am sure they all do great work but it does increase administration and the need to co-ordinate. A great deal of time must be spent talking to each other.

Mr. Shaun Quinn

Where we had the remit to change things we have changed them. We incorporated all the regional bodies in keeping with national policy. We succeeded in integrating five of them. Dublin Tourism wanted to stay separate. Effectively, it is a subsidiary of ours but it operates as an independent company. Shannon Tourism has its own set-up for whatever reasons. Where we have introduced the new structures in the regions they work amazingly well both at board level and in terms of streamlining because we do not have five or six sets of administrative departments any longer, we have one. Our accounts department is decentralised across six locations.

Deputy Olivia Mitchell

Then Fáilte Ireland's remit is more streamlined than it was.

Mr. Shaun Quinn

Taking up Senator Kelly's point on Tourism Ireland. I assure the committee that there is no duplication of effort. I could not stand over that. The roles and remits of the two organisations are different but I fully understand why people on the outside might think they overlap. We are not engaged in promoting the island of Ireland overseas. That is the key responsibility of Tourism Ireland. We are increasingly involved in the supply side of the industry. We make sure the right product is in place, that people are trained and that the natural environment is up to scratch. It is important that whatever bodies continue to exist co-ordinate as effectively as possible.

The festivals initiative has been very successful. I am very pleased with it. Since our organisation was established, we have invested approximately €25 million in 400 events, attracting 7 million visitors. It is certainly not a measure that we would be delisting. There are only three levels of festivals. How much we will invest from year to year will depend on the budget. I will know the figure this time next week but I do not know it today.

Food tourism is becoming increasingly important. We are about to collaborate with Bord Bia to form a food tourism strategy and we will link in with the relevant representative bodies. Such co-operation between State bodies is the way it should be.

The Pembroke Row building is leased to a third party and the Baggot Street building is on long-term lease. It is the board's intention to consolidate all functions in one property. It has always been our intention but this is probably not the right environment to be playing the property market. Whatever art was inherited from Bord Fáilte is listed in the assets register, which is the responsibility of the audit committee in the organisation.

To the best of my knowledge, everybody in the organisation must have a performance appraisal. This is standard practice in nearly every organisation and ours is no exception.

On the Irish Open, we are normally approached, under our sports and tourism initiative, by the European tour, which outlines its intentions for the following year. The event has been held in Adare for the past two years and had been scheduled to be held there a third year. I notice that, in announcing the calendar for next year, the organisers have not confirmed a location. We will await discussion with the European Tour. It is its event and it approaches us with a proposal, but this has not yet happened in respect of next year.

The question of shareholdings presents no difficulty and in this regard Killarney Golf Club comes to mind.

We have a decentralisation plan in place. The contract of everybody joining the organisation has a decentralisation clause, regardless of recent announcements about where a project may or may not be going. We do not have a site identified. There was an announcement recently that there should be no procurement of property or premises in the current economic climate and therefore we will wait. As far as we are aware, we are fully compliant with the requests of the decentralisation implementation group.

Dublin Tourism is an independent joint venture. It is technically a subsidiary of Fáilte Ireland but operates as an independent company and has its own board. We put three or four industry nominees on that board and we have a regular discussion with them, particularly at board level. At executive level, one would meet one's opposite numbers.

We extended the contract with Padraig Harrington when it expired and then pulled out of it. My opinion on it is that we were not getting good value for money. Circumstances change and Mr. Harrington has obviously done quite well since we pulled out. Tourism Ireland may be taking up this issue in due course but I cannot speak for it.

Deputy Cyprian Brady asked whether the merger worked. I can say after five years that it has although the interim period was not easy. Change is not easy for anybody, no matter how long one is in an organisation. The development has bedded down well and we have a very good team in place.

We come up against the overpricing of hotels in Dublin during events from time to time. It is not just a phenomenon in Dublin as it also features in other large urban centres, such as Galway during the races. It is a supply and demand issue and the market dictates the price. The hotels set a maximum price with us each year and they cannot exceed it. It they do, we have recourse. In general, the setting of rates is based on supply and demand. Overpricing featured when the industry was doing very well, but there has been a slackening since then.

The development of markets, including the sizeable markets in the Far East and the Middle East, will involve a slow burn. Over the next three to five years, the bulk of our business will still derive from the Untied States, Great Britain and mainland Europe. Our role will be to ensure we have a product that is attractive to the developing markets, which are totally new to us.

On iconic attractions, we cannot say we have anything specific in mind. I refer to attractions that could attract at least 100,000 visitors per year. Such attractions would have strong international appeal and our preference is that they would be rooted in the culture of the country. Deputy Cyprian Brady referred to the theme park planned for north County Dublin some time ago, which could be anywhere or in any country. If the majority of people who come to Ireland do so because of some aspect of our culture or heritage, we should try to build on this. We would prefer to do this than develop an attraction in respect of which we did not have a track record. We are not ruling anything in or out and are looking for good proposals.

Mr. Brian Maher will respond to the question on angling, which pertains to the British market.

Mr. Brian Maher

The angling market has been in decline for quite a number of years and there are a number of problems associated with the product. The problem arose many years ago with the rod licence dispute and continued because of issues associated with stocks. There is a social change occurring in the angling market. While it is still one of the most popular activities, an increasingly smaller number of people are willing to travel for fishing because of other counter-attractions. The most important point is that we should maintain a very strong angling product. There is a core angling market and our strategy is to ensure we have a product that appeals to it. The market is diminishing in terms of its potential to generate significant revenue. The task is to protect the revenue base we have in the face of competition from new destinations.

Deputy Olivia Mitchell

No fish.

Mr. Brian Maher

Yes.

Deputy Cyprian Brady

The salmon.

Chairman

The drift-netters were blamed for years and perhaps Fáilte Ireland should recommend returning to drift-netting.

Deputy John O’Mahony

I thank the delegates for their presentation. Reference was made to the necessity of promoting tourism in the regions and of the world rally championships in the north west. Mayo is hoping to get a slice of the action, if not now certainly in the near future. I thank Fáilte Ireland for its support in this regard.

In 2002, €6.5 million was invested by Fáilte Ireland to promote and develop an Irish festival and cultural events product as a means of promoting tourism beyond Dublin. Is there a question mark over the funding of smaller festivals around the country?

Mr. Quinn referred to the sales potential of Irish culture. Coming from the west, I realise the beauty of the countryside, in addition to the culture, is a major selling point. It is important that the west and north west receive a greater proportion of the money accruing from events such as the rally championships because of the necessity to invest in these regions and the difficult times we face.

Deputy Mary Alexandra White

I welcome the delegation. As the Green Party spokesperson on tourism, I was very interested to hear the presentation. My questions will be very targeted and focused and I hope the delegates will be able to answer them. What research has been done on developing eco-tourism? What feedback is Fáilte Ireland getting from product providers? In Leitrim there is a network of bed and breakfasts involved in green tourism. Is this replicated in other areas?

Ireland is renowned for its walking facilities but difficult access issues which have hit the headlines have put many European walkers off coming to Ireland. This is a pity as walking is more or less free for people, allowing them to take in the beauty of our hills and mountains. All one needs are a good pair of boots and a rucksack with a nice place to stay and have supper at in the evening. The access issue, however, is the elephant in the room that needs to be addressed.

From writing a walking guide to the Blackstairs Mountains I know the bed and breakfast providers in the area have all gone out of business. I am glad Fáilte Ireland intends to have a remedial action plan for the sector. What will it entail, apart from advertising? What is happening with the grading system for the sector? I held a seminar recently in counties Carlow and Kilkenny for the bed and breakfast providers in the area. The sector is hurting and it needs support. It has done great work for tourism in the past.

Ireland is in danger of losing its renowned friendliness of service, whether in the bars, restaurants or hotels. We need to pay great attention to the Ireland of the welcomes, the céad mile fáilte. It was one of our wonderful attributes which gave tourism a great head-start over many other countries. I have lived in many countries in Europe but I still believe our welcome to our guests is the best. We cannot take it for granted anymore. Whether it is more in-depth training for the new Irish or the indigenous Irish who have got tired in the sector, it needs to be addressed. As a former retailer I am conscious of how people treat each other.

Cooking holidays and fungi tours are becoming more popular. I know of people visiting abroad to take up tours involving mushroom collecting and identification. We should be tapping into this worthwhile area.

I have not seen much activity on developing mountain-biking tourism. Coillte has a recreational policy of establishing mountain-biking areas in its forests. This could be attractive to young people, particularly with our funny climate. Riding in the forests would be an attractive tourist activity. Areas need to be dedicated to this activity.

There is considerable concern over the use of quads and other off-road vehicles in commonage areas that are destroying the natural habitat. I hope Fáilte Ireland will dovetail with the Department of the Environment, Heritage and Local Government to protect these commonage areas. These are farmers' fields from which they get their incomes. We must protect our wonderful landscape for the long term. We cannot be thinking of short-term enjoyment. We are looking at a policy and a product not just for our era but for future generations.

Deputy Mary Upton

One question that comes up constantly concerns the costs of services in Ireland, particularly food prices. Can Fáilte Ireland address this to ensure tourists get value for money? A second issue is the lack of sign-posting for many sites. I have been a victim of it myself numerous times when I travel the country. It can be very irritating for domestic and foreign tourists. Can Fáilte Ireland address this issue?

Mr. Quinn spoke about sports tourism, particularly golfing. Fáilte Ireland no longer sponsors Padraig Harrington, claiming it was not value for money. What was the cost of this investment by Fáilte Ireland? In the context of wider expenditures, it might be value for money. I know we could not anticipate Padraig Harrington's golfing success but how did Fáilte Ireland rate it as not value for money?

I have come across tourist offices closed for lunch which is not great for tourists. I understand a number of staff took up the recent voluntary redundancy package in Fáilte Ireland. Why was this put in place? Was the one third replacement rate adhered to?

There is much confusion about the two organisations Fáilte Ireland and Tourism Ireland. There is a case to be made to re-examine the separate roles of the organisations. One problem we as parliamentarians come up against is that when we put down a parliamentary question, we do not get a reply when the issue is dealt with by an organisation like Fáilte Ireland. From that point of view, there is a case to be made for looking at the co-ordination of some of these agencies.

There is a regional tourism board and the Shannon Development board. Is Shannon not part of a regional outfit? Is there a need for two separate boards to deal with regional aspects? What are the various interactions between these boards? What is the need for them all? Separate administrative structures were needed to be established to deal with these boards at significant cost.

Is Mr. Quinn satisfied with the outcomes of Fáilte Ireland's internal and external audits in recent years? Is it getting value for money and everything in order?

Mr. Brian Maher

We have had a very active environmental planning unit operating for the past four years. In the past 18 months since we created the policy unit, we have incorporated environmental planning, along with economic and social planning, with a view to making the maximum use of the research we generate. This is used to develop policy positions on issues that affect the development of tourism and public policy. We have been very active in eco-tourism in vetting planning applications and working closely with local authorities. We have also commissioned some individual research on issues relating to eco-tourism and the environment.

Recently, we produced position papers on water quality and signage. We are working with the NRA to develop signage for major roads and the local authorities to develop specific tourism signage on the secondary roads. This is a major project which has been going on for several months and will continue. We are establishing a systematic and well-established signage range based on best practice to provide much better access to tourism facilities and at national level. It must be accepted that in terms of the criticisms we receive through our visitor surveys, signage and issues around signposting are always high on the list. It is an issue of which we are very aware. Considerable work is being done so I would expect something very positive to emerge within the next six months.

To turn to eco-tourism, we have considered the issue of wind farms and issues around litter. The Deputy referred to bed and breakfast establishments in Leitrim. This would be the green box concept which has been very well developed in the Sligo-Leitrim area. I am not aware of plans to roll this out in other areas but it has been very successful and we have been very supportive of what is being done as it is setting a benchmark for the industry. Many of the ideas that are emerging from the green box are being incorporated into many of our performance measurements. Any work we are doing on performance measurement for any of the accommodation sectors, be it self-catering, bed and breakfast establishments and so on, would always incorporate a significant element of trying to improve their eco-friendliness.

Much work is going on in this area and there is clearly much more to do. It is becoming increasingly important that the whole environmental issue is addressed, including considering Ireland's carbon footprint and its impact on the development of tourism.

To move on to the issue raised by Deputy White with regard to friendliness, it is a most interesting concept. There are many countries which sell friendliness as one of their major attributes and we do it is as much as anyone else. One of the most enduring points emerging from our research is that whereas anyone can claim to be friendly, in the Irish context it is the most powerful post-visit reaction of our visitors. As a nation rather than as a tourism board, we do not realise at times how potent this is or realise the impact the friendliness of the ordinary people of Ireland has on our visitors. It really does create an extraordinarily unique experience which we possibly take for granted. It is incredibly strong and enduring and is probably the single factor which is most likely to generate satisfaction among our visitors.

I am talking about this in the very general sense of the experience of the holiday, which means the interaction with people at every level, but there is a specific issue with regard to the hospitality sector, especially given the changes taking place in that sector. We are very conscious of the need to maintain a uniquely Irish friendliness in the way we interact with our customers and tourists, and this would be the same whether the tourist is an indigenous Irish person or someone of another nationality. We are also conscious that the quality of the Irish welcome needs to continue to be embedded in our hospitality sector.

At present, it is certainly not diminishing. Our research shows it continues to rank very highly as a factor in terms of people's satisfaction and their choice of Ireland as a destination. It would be considered a very important factor with between 80% and 90% of our visitors. This is consistent and does not show any significant sign of diminution. The only area where perhaps occasionally friendliness might be losing potency is as a result of the changing nature of tourism to Ireland. As stays become shorter and more urban-based, the opportunity to interact with people in a significant way is somewhat diminished, which means that friendliness as an experience may become slightly less important. For those who are investing in it, however, the reaction remains very positive. It is definitely something that cannot be taken for granted and we are very aware of the need to continue to foster it.

We have been very conscious of the issue of the cost of services and food and we monitor value for money perceptions continually through our consumer research. Over the years and particularly in the past five to seven years, we have seen that the most critical element in the perception of value for money and the issue that is most likely to cause a problem for us is the cost of eating out and drink. Being aware of this, we have initiated a project which examines the fundamental cost of putting a plate of food on the table — a standard meal in a restaurant, whether a stand-alone restaurant or a hotel restaurant.

We are doing this because tourism involves small and medium enterprises which in many cases do not have the facility or resources to carry out research. We consider that we are a research and development facility for the industry and we hope to examine critically and forensically for the first time what it costs to put a plate of food on the table. We can identify those elements which contribute to cost and to the perception of poor value, and ascertain which factors we can influence. We are doing this with a view to trying to help restaurateurs and others responsible for providing the food service to be more profitable and to provide better value. In a sense, we hope that by considering every aspect, such as legislation and the costs of food, raw material and energy, we will examine the issue in such a way that we can help to improve quality and value for money in this critical area.

Mr. John Concannon

With regard to the tourism offices, following the merger of the regional tourism authorities in July 2006, Fáilte Ireland took responsibility for all 67 tourist offices, which, until that point, were managed through the regional structures. The first job of the organisation was to reference the tourist offices with the national spatial strategy. The outcome of this was that we identified a tiered approach with eight gateway offices, 14 hub or node offices and the remainder being partnership offices with the community.

The focus was to put the primary resources into the gateway offices in the main locations of Donegal, Sligo, Galway, Killarney, Cork, Kilkenny, Waterford and Mullingar. Within that, resources were focused so the gateway offices would be open all year round, six or seven days a week, fully staffed and with a full range of services. Stepping back from that, the 14 hub offices would be in the main tourist areas, for example, Westport, the Aran Islands or Dingle, and would be open most of the year. The result was that in the smaller, seasonal offices, we were able to concentrate our resources on the high season during the main summer period and, therefore, provide a service throughout the country that was more focused around the hubs and gateways.

That said, since the integration, we now have a national policy governing all the operating procedures, staffing and operation of the tourist offices. It would be the exception if an office is closed at lunchtime during the season, although this would certainly have been the case in the past because of varied staffing arrangements. The arrangements now in place mean that if offices are open, they are open for the full day.

Mr. Shaun Quinn

The bed and breakfast sector is a hugely important component of the industry. This may not be always illustrated by its size but it gives something unique to the tourism product, especially in the in-house experience and the warm welcome, which is not immediately apparent in other parts of the tourism industry. The operating environment for bed and breakfasts has changed enormously. I spoke about the near explosion in hotel bedroom numbers, which has also been mirrored in self-catering apartments throughout the country. There are an extra 30,000 hotel bedrooms and if this is multiplied by the 365 days in a year, there are almost 11 million extra bed nights available in hotels per year.

This creates huge pressure. In the past five years, the number of approved bed and breakfast establishments has, from what we can gather, dropped from 3,500 to 2,500. There are a number of reasons for the decline. One is obviously competition from other accommodation sectors such as hotels but, equally, there are people retiring from the sector who have no one in the family coming along behind to take their place. It is obviously an issue that concerns us because, given their importance, particularly for the US and continental European markets, we need to nurture and develop a core number of bed and breakfasts.

At present, we are working with a group from the sector comprising operators from throughout the country to put together some kind of an action plan to try to consolidate their position and hopefully grow it. Part of the difficulty is that bed and breakfasts need to differentiate themselves in the eyes of the customer from other forms of accommodation, and we need to work with them on this. This is not something that will be achieved simply by having a star system, although such a system is part of the current discussions in terms of trying to raise quality in the bed and breakfast establishments.

Increasingly however, if one marries oneself with a product, such as angling in the midlands, whereby one offers drying rooms, prepares packed lunches and what not, one can differentiate oneself as a special type of bed and breakfast. Such sectors are growing. Members of that sector who are taking such measures are getting on and performing.

Another area of great opportunity is for the sector to become more adept in the world of the Internet. It constitutes the road map to an increasing extent and in the eyes of many tourists coming to Ireland, those who are not on that map do not exist. Consequently we are devoting considerable time and resources to working with the bed and breakfast sector in particular to improve its capability and capacity to operate on the Internet and through e-mail, as that is how it will get business. Bed and breakfast establishments that are not on it will lose business. While there is no quick fix, a number of measures can be taken and we intend to support bed and breakfast operators in respect of them all because this is an important sector, regardless of its size. It is of fundamental importance and we are renowned for it.

As for the point on mountain biking, Coillte is our partner in many projects. I have visited the mountain bike trails, some of which have been exceptionally well done. Some fantastic work has been done and we have plans to work with Coillte in future, under the NDP, on more such trails, as well as perhaps on other types of walking pursuits.

I will turn to Deputy O'Mahony's remarks regarding the festivals. We inherited a great initiative that was introduced in 2002 and had it not been introduced then, we would be obliged to do so now. Its local achievements for festivals large and small have been phenomenal. As I noted earlier, over the past five or six years we invested approximately €25 million in 400 events that attract approximately 7 million tourists. There is no question mark over the future of this initiative. While we continually tweak it and try to get better value for money, I can assure the Deputy, even in advance of the budget next week, that we will be running that programme again next year. Its local success has been phenomenal.

Deputy Upton raised a number of issues in respect of agencies and structures and mentioned Shannon Development in particular. Shannon Development originated quite some time ago, long before we were established. It has responsibility for Limerick, Clare, north Tipperary and south Offaly. When Fáilte Ireland incorporated the other five regional tourism boards within itself three years ago, we put in place a system whereby we would have local representation in order that there would be a locally-represented tourism board in each region. I understand that Shannon Development has followed suit and is moving in a similar direction. However, it is separate and has specific responsibility for both tourism and enterprise development generally.

As for issues pertaining to co-ordination and structures, at a national level I take the Deputy's point. I will repeat my earlier comment that ultimately, we will work within whatever framework is provided. As for existing issues in respect of our daily work, at the time when the tourism policy review group was put together in 2002, 33 separate agencies were putting money into tourism around the country at a sub-national level. Our issue is at sub-national and regional level and co-ordinating that effort would give a much better bang for our buck. This is what we are trying to achieve through our own new regional structures and by getting our partnership arrangements in place.

In respect of the Harrington fee, I am loath to provide a figure. While I could do so, I am unsure whether it is correct because this is something we inherited on our establishment. I believe it was approximately €400,000.

Senator Jerry Buttimer

Was that per annum or over the duration of the contract?

Mr. Shaun Quinn

I would prefer to reply formally to the question.

Chairman

Mr. Quinn can come back to us.

Mr. Shaun Quinn

I have no difficulty in so doing. The figure I provided should be regarded as being tentative. Perhaps I should not have given a figure because it was a Bord Fáilte contract. The awarding of such a contract now would be a decision for our board, which has not considered the matter. While that is not to say it would not consider such a contract for that or any other individual, responsibility for it would lie with the board, rather than with the executive.

The question regarding internal audit should be put to our authority and to the audit committee. My impression is that they are happy enough with the way the function is working in respect of keeping the executive on its toes. However, that is an issue for the audit committee and the board. Deputy Upton also queried the reason for the introduction of a voluntary early retirement scheme. It was introduced at the request of the union as part of a deal at the Labour Relations Commission and has been fully implemented. Our established staff complement is monitored very closely by the Department of Arts, Sport and Tourism. As far as I am aware, it is on a monthly, if not a quarterly basis. As that complement has been reduced by whatever came out of the early retirement scheme, the position is crystal clear. I believe that covers everything.

Chairman

I am conscious of the time and draw that to the attention of members and the deputation.

Senator Labhrás Ó Murchú

I dtosach, is mian liom fáilte a chur roimh an toscaireacht agus tréaslú leo. I ndáiríre, tá sár-jab á dhéanamh ag Fáilte Ireland, fiú mar a bhí déanta ag Bord Fáilte le blianta fada anuas. In particular, I wish to compliment the chief executive officer on his no-frills presentation, which is exactly what is desired by a committee such as this, as it enables members to get to the kernel of the items they wish to discuss. On the one hand, he showed clearly the success of the industry, which is phenomenal by any standards. I congratulate the industry, the success of which has continued through the years. On the other hand, he has put down a marker that, as the last few weeks have shown everyone, we live in completely different times financially. This is the case globally, as well as in Ireland, and this will have an impact on tourism. There will be less movement of people and those people who will travel will go to where the best bargains are to be found.

Approximately 20 years ago, a major survey was conducted on tourism that identified six highlights for visitors to Ireland. If my recollection is correct, the survey cost nearly £200,000 to carry out. It identified six areas, the first being national monuments, which were at the very top. Irish traditional music and high-class evening entertainment in any form came second and third, respectively, and were followed by genealogy and other areas. In the meantime, however, the industry experienced a metamorphosis. A decision was made somewhere to go after a different profile of tourist. To some extent, there was a focus on young people who had money and who sought city, or urban life. Perhaps that also was presented as part of the tourism industry's marketing package.

I visited the New York offices of Tourism Ireland last March and had a chat there with Mr. Joe Byrne, as I often did when he was based in Ireland. One often gets a different feel for people's focus or requirements when outside the country than might be the case at home. If I picked him up correctly, his point was that we were reverting to basics to an extent by revisiting that which made us distinctive, exclusive and authentic. Intentionally or otherwise, Mr. Quinn conveyed to some extent this feeling concerning our culture and other aspects that have an international attraction. If this is the case, I am glad from a commercial point of view. We have products that are exclusive to ourselves, namely, our culture, scenery, people and friendship. They are precisely what is required in a competitive market. Even if we are priced higher than some other destinations, discerning tourists will be prepared to spend that bit more to get here.

I will beat my own drum, just as others will do, although they might not mention what their drums are. I am connected with Comhaltas Ceoltóirí Éireann. Some 250,000 people attended Fleadh Cheoil na hÉireann in Tullamore this year, a large number of whom identifiably came from outside the State. It generated close to €30 million for the area, but the provinces host 45 other fleadh cheoil every year. Considering Senator Kelly's remarks on festivals, could they be grouped under a parent body to ensure that they develop as a network?

The application process is difficult and convoluted and it is almost impossible to live up to some of the conditions attached to the marketing aspect of a grant. I do not blame our guests — they must monitor public money — but people with a good community festival in a small area often do not benefit because the process is so difficult. Will our guests consider this matter? There should be no drop-off in the support given to community festivals.

In terms of a spatial spread, it is agreed that rural Ireland has a problem because of short-term visits. Continentals use London as a gateway to Dublin for weekends, but we in the country are suffering. The tourism industry has been eroded because of a different type of short-visit tourist. Community festivals in small areas should be helped because they do not have marketing managers, director generals and so on. They will have something that is warm and special. For example, 100 people from outside the State could be on trips around the country to find festival after festival and may spend two weeks here. I recommend that our guests revisit the issue.

I have raised the matter of bed and breakfasts at least four times, even when the situation was not seen as challenging. At our last meeting on tourism, I predicted that it would not be long before 50% of bed and breakfasts go out of business. My area is heading in that direction. If such a sad event occurs, it will pose a considerable problem. One generation is prepared to run bed and breakfasts because they enjoy it. I know many of them. They like meeting visitors. A younger generation will not take the business up at a later stage. If it is eroded, we will not be able to re-institute it. Will our guests consider making the playing pitch fair for everyone?

When hotels are under pressure, they lower their prices. In and of itself, this is good. One need only read newspapers every day to see the bargains. However, the lower they set their prices, the closer they get to bed and breakfast prices. Hotels have liquor licences, but bed and breakfasts do not. We should have a radical approach to developing some form of drinks licence for bed and breakfasts. It would be easily monitored and controlled, as 100 people would not enter a bed and breakfast to abuse it. A restaurant can have a wine licence for €250 per year with little or no bureaucracy, but I am going beyond this. We should find a way to allow bed and breakfasts such a licence to cater for their five, six or seven guests. I ask that our guests consider making this suggestion.

It is important to distinguish Tourism Ireland's role, as Mr. Quinn is correct in that there is a distinction. In terms of the North, we know the political sensitivities attached to establishing Tourism Ireland. Until that time, visitors to Ireland came to two islands, the North and the South. We do not want to return to that. We should not rattle the Unionist tradition's cage. Tourism Ireland works smoothly, conveys a significant political message and removes much of the confusion surrounding marketing.

The hospitality industry is being serviced by non-nationals predominantly, which changes the industry's character. Would it be possible to set up a training course for non-nationals to induct them into some of the characteristics expected by tourists? Non-nationals are exceptionally good and have adapted well in the short term. Attitudes have changed and they are almost using Irish humour. However, a training course would be helpful, but the situation will continue for a long time.

Regarding traditional entertainment, it is vital that there be a good body of entertainers when and where they are wanted. If we advertise this type of Ireland and people do not find it when they arrive, it will be like Daniel Corkery's The Hidden Ireland. I might make a quiet suggestion to our guests after the meeting. FÁS and Fáilte Ireland could run training modules to ensure a ready group of people with stage experience. I do not want to take away from pub music, but discerning tourists want authentic music rather than background noise. They want to be able to appreciate it. We should respond quickly because the market is large.

I compliment and congratulate our guests on what they have done. They are well positioned to bear up under whatever challenges present during the coming years.

Senator Jerry Buttimer

I will not give a Second Stage speech.

Chairman

It is questions and I will ask the deputation to answer them.

Senator Jerry Buttimer

Given the time, I will be brief and put specific questions. Mr. Quinn's remarks alarmed me. His impression is that everything about the auditing was fine. He is the chief executive and I would expect him to have a definitive answer, not a glib response. Can we revisit the question? Are we getting value for money and is everything alright? FÁS appeared before a different committee last week. I do not mean to be antagonistic, but we need accountability, which the country has lost.

Mr. Quinn stated that capacity in the hotel sector is continuing to increase. Given that 11 million bed nights must be filled annually, is there the potential of a banking implosion? Have we reached saturation point, are hotels lying idle and are there any white elephants, for example, hotels that have been given tax incentives? There is a new explosion of boutique hotels.

The remarks on tourism training and the deployment of staff are of concern. I am familiar with the excellent work being done by Fáilte Ireland's people in Cork in terms of bar skills, chefing, hotel management and so on. Why is there a change in direction? As Senator Ó Murchú suggested, immigrants should be trained at, for example, Albert Road in Cork, where they could undergo a 16-week course on-site before entering the workplace.

Do I take it from the delegation's remarks that we will see a reduction in the service, classes and programmes of the organisation in the training centre in Cork? I am from Cork and want to deal with that issue. An excellent group of people work there and provide a range of educational programmes. I know past pupils contacting me for references value that. Perhaps this could be examined.

Regarding the plethora of agencies, such as Fáilte Ireland, Tourism Ireland, a Dublin tourism agency and a Shannon tourism agency, is there a better way of doing business or do we need all these agencies? I do not know if the integrated Cork Kerry tourism has worked. I have a major interest in tourism and am not sure it worked in the way suggested today. I am concerned that there is no real marketing beyond the Pale. Figures can be thrown out but we must examine the area beyond Dublin. I am interested in comments on regional training.

Deputy Dinny McGinley

Go raibh maith agat. Ba mhaith liom fáilte a chur roimh na h-ionadaithe ó Fáilte Ireland atá anseo againn inniú. We all realise the importance of the tourism industry to our economy. It generates approximately €7 billion for the Exchequer as well as providing hundreds of the thousands of full-time and part-time jobs. Regarding the inflow of tourists, I was surprised to read some report on the checks and balances of the inflow and outflow and I do not know whether there is a net inflow. I refer to the number of people who leave Ireland and the amount of money involved is almost equivalent to what we earn from tourists coming in. There must be room for improvement. Are there plans to address that and keep some people at home? One cannot force people to stay at home but there should be incentives. We spend €6 billion to €7 billion abroad and we are just breaking even as far as tourism is concerned.

Coming from Donegal, I would like to see a good geographic spread of these 6 million to 7 million people who come here each year. I am sure the Chairman agrees that there was a downturn in Donegal this year. I listened with interest to the comments of an Seanadóir Ó Murchú and others on cultural tourism. In Donegal language-based tourism exists. In my area, the Chairman and Senator Doherty are aware that the vast majority of tourists were connected with language. Children are in Irish colleges and fathers, mothers, uncles, aunts and grandparents come to visit. Perhaps Fáilte Ireland could examine that.

Deputy White referred to walking, which we could do more to develop. It is an increasingly popular activity. I was in Scotland these last few years and noticed that Scotland is addressing walking in a more successful way than we are. It is an activity that is increasing there but in Ireland there are a number of obstacles that we have not properly addressed or solved. There is great potential.

Scotland is the same size, and has the same population and terrain as us. How do the two countries compare in terms of tourism? Going through small towns in Scotland, I was struck by the facilities provided, the cleanliness, the tourism offices and public conveniences. Scotland may not be as successful as us or may not generate the same amount of income but certainly it does things very well and we could learn from it.

With regard to music, one can go through towns in Ireland in the middle of the summer and the doors are open and one hears mid-Atlantic pop. We have something that is unique and great effort should be made to promote it and provide it to those who come to Ireland. It is great to go into a pub, sit down and have an impromptu session whereby people go up and do their own thing instead of the situation I described, which we are inclined to get sometimes in the west of Ireland. I pay tribute to Comhaltas Ceoltóirí Éireann for its efforts in promoting this and providing it for our people. It is great to go into a place and hear a song. The more often one hears a song, the more one likes it. I always like to hear songs I know. This is an area we could examine.

I refer to small festivals. The Chairman, Senator Doherty and I spent the entire summer going from festival to festival. We all compliment the festival committees and their work. Some years ago, a fund was set up to promote culture, music and festivals of that kind. The festival committees are mostly voluntary and may not have expertise but they have commitment. It would be a pity if funding was withdrawn from level 3, 4 and 5 festivals that are so much a part of the summer season in Ireland. Tá lúchair orm deis a bheith agam na cúpla focal sin a rá.

Senator Pearse Doherty

Go raibh maith agat, a Chathaoirligh. Tá mé iontach buíoch go bhfuil tú in ann mé a ghlacadh ag an bpointe seo. I welcome the delegation, which made an interesting contribution. I apologise because I must leave after this contribution. The education debate is taking place in the Seanad and I am the spokesperson on that. I will look at the Official Report to see the answers to questions.

I will focus on matters in the north west. I agree with most of what Seanadóir Ó Murchú says but the proposal for an induction course for foreign nationals is not one with which I agree. It is a dangerous proposal and I do not know the concept behind it. Will we ask them to dye their hair red and wear Aran sweaters? People are coming to this country for the people who are here. Many of the foreign nationals working in the industry have been more accommodating than those who have lived here all their lives. Stereotyping this group of people is very dangerous.

The witnesses addressed the issue of the north west in the contribution. There is no regional balance in tourism. The 2006 fact sheet refers to tourism in Leitrim, which accounts for 0.3% of overall tourism revenue, and Roscommon, 0.6%. Tourism in Clare, Mayo, Roscommon, Leitrim, Sligo and Donegal combined amount to 9.2% of tourism revenue. As CEO, what does Mr. Quinn see as the three obstacles to increasing tourism in the north west and that area of Connacht that has low revenue? Connacht is quite low except for Galway which has 9.2% of tourism revenue.

Regarding the islands, which are a major tourist attraction, I am doing a report for this committee and have travelled all ten counties along the west and visited the islands over the summer. It is fantastic to see ferries going in and out to Arran and Inishclare. When one considers the islands in Donegal it is not the same. What is the problem there? Tourists coming off ferries refer to the lack of public toilets on the islands. If we are building a tourism product we need to provide basic facilities like toilets. If tourists go to Tory Island in the morning and do not come back until the evening the hotel on the island may be closed. Where will they go to the toilet? It is common sense, in this day and age. Is there a way we can promote the islands on a regional basis?

Deputy McGinley mentioned language and culture. A study in 2004 showed that of 6.4 million tourists, 2 million said that culture and heritage was their reason for visiting this island. We have not exploited that market enough. On the issue of language, which is part of culture, in the Gaeltacht region of the north west, we do not see large numbers of tourists, mainly because of access difficulties. One of the facilities particular to Gaeltacht regions are the student language colleges, to which people come from all over the country to learn Irish over three week courses. If one speaks to people who come to my area, Deputy McGinley's area, the Chairman's area or any other Gaeltacht area and are staying in bed and breakfast accommodation or hotels, most will say they were in the area learning Irish when they were younger or their son or daughter was learning Irish in the area and they came to visit. Having seen the area first hand, they return. We have not built on that at all. The language colleges have a complete database of all the people who will undertake courses next year. There is no reason we cannot try to encourage their families to come for more than a one-day visit. We could give them incentives to come for three days or more and show them what is available in the Gaeltacht regions.

Festivals were mentioned many times and I echo what has been said already in that regard. The representatives have said that the fund for the festivals will continue. I note that the fund, since its establishment, has decreased significantly — by nearly 30%, compared with what it was in 2002. Will the funding of level 3 festivals by Fáilte Ireland end? Is it proposed that they be funded through the Leader programme in future?

Deputy McGinley referred to musicians. I had the opportunity to visit Canada while doing some work for my party during the summer. While there, I met the president of Music Nova Scotia, who is from County Tyrone. He spoke to me about the concept of that organisation, which uses musicians for tourism purposes. The organisation is hugely successful. He spoke about the fact that musicians should not be seen as "the wee add-on", the "diddly eye" in the corner of the pub, money under the table and so forth. Music is a tourist attraction and should be used, both internationally and domestically. That is not being done at present. Is there any programme that will professionalise the music industry and make it central to our tourism strategy?

Access into the regions is one of the major barriers to tourism development. What role does Fáilte Ireland play in transport policy? I know that the Western Development Commission has proposed in the past that Fáilte Ireland be given a role in that regard. Given that tourism is so important to the economy of the regions, access difficulties must be resolved. People in Donegal, perhaps more than other counties, know only too well the problems of access. On that subject, the Cork to Swansea ferry was discontinued this year and the estimated cost of that discontinuation is €35 million. Between 100,000 and 140,000 people used that service every year. What can be done about that?

I refer to signage. We have built on what we have. I come from Gaoth Dobhair, the most beautiful area on the planet. We have beautiful islands, rivers and mountains, as well as the sea and yet we do not get the tourists. It is not being promoted as much as it should be. I had the opportunity to take my family up to Grianán Ailigh in Inishowen recently. It was the first time I ever visited there and it is absolutely gorgeous. I really enjoyed the trip but the way the place is promoted is appalling. It has been there for thousands of years but nobody has done anything to promote it. One does not know what one is looking at, what was developed recently, what is new and so forth. The signposting on the way in is in a dreadful state and that is just one example of what is happening all over the place. Is there a programme that can deal with attractions that have been provided by nature or built thousands of years ago, so that we can exploit them to their full potential for the benefit of the tourism sector?

Chairman

Four more speakers are offering, namely Deputies Micheal Ring, Michael Kennedy, Áine Brady and Seymour Crawford. Do committee members wish to make their contributions now and allow the witnesses to respond to all of the comments?

Senator Jerry Buttimer

My apologies, I must go to the Seanad now.

Chairman

Are members happy with that suggestion?

Deputy Michael Ring

I am happy with that. I will keep my contribution short. As somebody who comes from the capital of tourism, namely, Westport, it is a disgrace that Fáilte Ireland was not decentralised to my town. Decentralisation was discussed and the organisation should have been moved to Westport. I accept that the witnesses had no say in the matter as it was a political decision.

Hotels were mentioned. Hoteliers wonder why people do not use their facilities. It is because of the rip-off culture. Last night a visitor and I went to a hotel, which I can name if anyone wishes. I bought a bottle of Budweiser for my visitor and a diet coke. I was charged €5.30 for the beer and €2.80 for the coke. People wonder why tourists are not coming into the country. That hotel is not even a quarter of a mile from Leinster House. It is a disgrace.

What is Fáilte Ireland doing about signage? The organisation advertises heavily and brings people into the country every year. It also has dealings with the local authorities. The one complaint that tourists make every year is that there is a lack of proper signage here. What is wrong? Why do we encourage people to go into rural, isolated areas and not provide decent signage for them? I was born and reared here. I never go abroad because I hate it and love this country. I went on holidays last year to west Cork and Killarney. I could not find any place because there was no signage. We cannot encourage people to come here and not provide decent signage. People are being killed on the roads because of a lack of proper signage when they stop to try to figure out where they are. They get lost because there is no proper signage. We have been talking about this issue for a long time. Tourism has been important here since the foundation of the State. Fáilte Ireland must take drastic action. In its annual report, it must address the Minister directly and point out that we need decent signage.

Fáilte Ireland deals with local authorities regularly. I read in its annual report that we have 60,000 bed nights in hotels. I agree with other speakers that the biggest loss to tourism is the loss of bed and breakfast accommodation. Such establishments were run by Irish people who could speak the language. They knew how to welcome people. It is a big mistake and a loss to tourism to allow the bed and breakfast sector to decline. I do not agree with the chief executive's point about people retiring and getting out of the business. People have stopped providing bed and breakfast accommodation because they had to be registered, they had difficulties with local authorities who where charging them for erecting signage and they also had to pay rates, although I believe there may be a derogation in place now in that regard. Bed and breakfast businesses have been in existence for a long time. Some people educated their children from the money they made in the business. Bed and breakfast providers opened up their homes to people, they understood the Irish culture and what tourists wanted. Visitors learned more about Ireland by staying in such places.

What is to be done with the hotels that are struggling, particularly the family-run establishments? Many of the latter are not open 52 weeks of the year but are still being charged rates on a 52-week basis by the local authorities. A scheme must be put in place for family-run hotels, if not all hotels, to be fair. Local authorities are charging them very high rates and many are finding it impossible to pay.

I do not expect Fáilte Ireland or Ireland West to do everything. Mr. Concannon has come to Westport and knows the community there. It is all about community and everybody working together. On the marketing budget, I remember when times were bad in the 1980s; the people of Westport had to collect €30,000 or €40,000, which was matched by Bord Fáilte. They then went out and promoted themselves. We had a problem concerning Knock Airport and people coming to Westport from there. The 12 hotels in Westport got together and paid for a bus from the airport to bring tourists to the town. They did not compete with one another but worked together as a community. We need more of that in the tourism sector. We must work together.

Festivals, sporting events and so forth are the way forward. Henry Coyle, the son of a local man will box in a few weeks' time in Mayo. The event will attract a few thousand people and RTE will cover it. Bernard Dunne will also be boxing. Sport, whether it is GAA, rugby or soccer, is important. Everyone loves sport and wants to attend events. We should consider ways of staging events in rural areas outside Dublin so that people have opportunities to sell their counties.

Many people in my county work in the tourism industry. We have to tackle the rip-off merchants before they destroy the industry by charging €5.30 for a bottle of Budweiser, for example. While canvassing in a supermarket last Saturday, an individual pointed out to me that 20 bottles could be purchased for €20. It is no wonder people are not coming to this country. They will visit us if we offer them value for money, however.

Deputy Michael Kennedy

I apologise for missing the earlier part of the meeting. The Fingal county manager and his officials were before the Joint Committee on Transport so I had to look after my constituents.

Others have mentioned walking and music but we have a major advantage over other countries in terms of what we have to offer in golf. Our winters are mild and we have several links courses. We should promote this activity more. As a general rule, golfers are high spenders provided they get good value. As with the rip-off hotels criticised by Deputy Ring, some of our world renowned golf courses charge too much. I do not think any golf game is worth more than €50. I speak as a golfer who is not brilliant but enjoys the game none the less. If we market hotels, restaurants and golf courses as a package, we could attract more people to this country. When one considers it is too warm in Spain to play golf before 7 p.m., our mild winters seem more attractive. The winter months are when we need tourists and we can attract them if we persuade all parties, including the airlines, to offer packages.

I have bought tickets for Tina Turner's concert and I am looking forward to attending it. I see no reason Fáilte Ireland cannot persuade event promoters to organise packages involving concerts, hotels and restaurants. When Aiken Promotions or another promoter brings an artist to Ireland, there is no co-ordination in terms of finding bed and breakfasts or hotels. With the advent of good value flights, we should be able to put together packages whereby artists are hired to perform in Westport, Cork, Galway, Limerick or Dublin. Our own bands, such as Boyzone and U2, can sell 80,000 tickets in Croke Park, so there is no reason eight events involving 5,000 people cannot be staged. I would like to hear Fáilte Ireland's comments on this issue.

Foreign nationals now represent 15% of our population. Why are we not attracting larger number of Chinese, Polish and Latvian tourists? Rather than going home, the people we have here should be inviting their families to visit for a couple of weeks. Again, we should put together packages for this.

What are we doing to get on the bandwagon before the 2012 London Olympics? Our proximity to London presents a major opportunity in terms of training facilities. Have we approached the International Olympic Council with a view to contacting all the countries that are planning their training activities before their athletes descend on London? We could show people what we have to offer in terms of sporting and tourism facilities.

Deputy Áine Brady

I apologise for having to leave earlier but I am convenor of the Joint Committee on Transport. I commend Fáilte Ireland on its regional promotion.

Deputy Kennedy spoke about promoting golf. As a Deputy from Kildare North, I am aware of the benefits of the Ryder Cup for the midlands. It is encouraging that a number of Americans have returned to the region since the event was held. I would like to see further investment in regional tourism so that people travel outside the capital.

In regard to funding for smaller festivals, many of the big festivals supported by Fáilte Ireland started out as small, community-based events. People will not go to rural areas unless they are attracted by a music festival or other event. What is Fáilte Ireland's view on supporting community festivals? People often get the impression they will be supported by the Leader programme but this is not always the case. The programme is not nationwide and Kildare North does not qualify for many of the funding categories. It is a hobby horse of mine that the programme only covers 42% of the regions.

Deputy Seymour Crawford

I apologise for invading this committee but I do so for a specific reason. I welcome the opportunity of meeting the representatives of Fáilte Ireland. It is somewhat of a bone of a contention in the constituency I represent, Cavan-Monaghan, that tourism in the region was considered a non-starter throughout the Troubles. People flew into Dublin Airport and travelled to Galway or the South or, if they came through Belfast, they went to County Donegal. The chances of tourists visiting counties Cavan and Monaghan were very small. However, significant investment has been made in the area on hotels and golf courses.

I listened with interest to Mr. Quinn when he stated that he works closely with the county councils. I understand Fáilte Ireland representatives will attend Monaghan County Council's next meeting for reasons about which they are not very satisfied. Some of the payments due for 2007 have not yet been made, despite being inspected two or three times. This is worrisome in light of the current economic situation.

The Fáilte Ireland tourism representative for the region is based in Letterkenny, which is not a great advantage to counties Cavan and Monaghan. Some of the major hotels in the area have even started to co-ordinate their own promotions. In light of the fact that tourism was not significant historically, it is difficult for the counties to meet the grant aid criterion of 100,000 visits per year. An area with a poor record on tourism has to start from a lower base. Ventures such as the rally school in Scotstown, County Monaghan, need help if they are to be successful in attracting visitors. I ask Mr. Quinn not to forget counties Cavan and Monaghan which have suffered so much over the years. They offer a good range of hotels and the opening of Aer Lingus routes to Belfast and Ryanair routes to Derry offers great potential. It is only 60 miles from the Monaghan region and there is an obvious need to promote the area, together with Northern Ireland. We have the hotel structures immediately south of the Border which may be under pressure currently but the same number of hotels to facilitate the people would not be north of the Border.

I do not want to be negative but I ask that the area be looked at again to see how we can be proactive. I think of the Nuremore Hotel, the Glencarn and Castle Leslie in Glaslough. They have spent massive money but are they getting the support they deserve? There is also the Hilgrove and Four Seasons in Monaghan, along with a list of other hotels and golf courses.

Much infrastructure has been put in place, some with the help of Fáilte Ireland. There must be a more proactive sales project, perhaps with Tourism Ireland on a cross-Border basis. It is vital, in light of the downturn in the manufacturing area, that we get tourism support in the region.

Chairman

There was a wide range of questions and a number were answered earlier, so perhaps the witnesses will take them together. They will decide how much time we have left but we are looking to finish within ten minutes.

Mr. Shaun Quinn

I will begin with Deputy Crawford's queries about moneys not paid to Cavan and Monaghan. That links into the very first issue raised by Senator Buttimer, who unfortunately is not here. We have a strict process of corporate governance and accountability on any money we put out because it is taxpayers' money. We look for proof of work being done before we issue money on behalf of the taxpayer.

Senator Buttimer raised the issue of corporate governance. Perhaps I did not come across seriously enough but I assure the Senator and the entire committee of the internal audit function in our organisation and all aspects of corporate governance. We have some of the strictest processes in place that would be found anywhere in the public service, and they are open to inspection. It is important to make the point.

That is a reason payments may not be made as early as some people may want. We must be satisfied work is done according to how it should be.

Deputy Seymour Crawford

There were three inspections.

Mr. Shaun Quinn

We were asked if we had enough hotels. We have enough. There is no problem with bedroom capacity. No hotels are closed or lying idle and they are operating, on average, at approximately two thirds occupancy around the country. Those assets can be sweated further before there is any further development of hotels.

It may be marginal but the reason we may switch to training staff within the industry is that there is no employment growth in the industry as there has been. With cost pressures, the industry is trying to improve productivity, which it should. This means there will be more training within their own operations, which is what we try to respond to. However, there is no question of us closing our Cork training centre.

There were a few comments from members about culture, which we thoroughly endorse. We take the view that Tourism Inc. has perhaps been complacent and not leveraged authentic Irish culture to the extent that it could have. I know points were made about Irish language, culture and literature. We would roll Gaelic games into that as well. We have much that is unique and attractive and we intend to leverage it as we go forward. That is a core for a segment of visitors intending to come here.

Much has been said this afternoon about festivals, particularly level 3 festivals. We had the view about a year ago that with the Leader programme coming down the track, we did not want duplication of effort or grants coming from two or three bodies. This goes back to corporate governance. It has since been clarified that Leader will not operate in this sphere, which satisfies us. There is no issue I am aware of in the support of those festivals in principle. Clearly funds are limited and some will lose while others will not. These decisions are made by a sub-board of our authority, believe it or not. We look forward to another very good year in that regard.

There were a number of issues raised regarding foreign nationals. Whether one likes it or not, the labour market has changed very much. Deputy Kennedy referred to the fact that 15% is the proportion in the work force but I reckon it is higher in the tourism sector.

Deputy Michael Kennedy

That is the population.

Mr. Shaun Quinn

I accept that but we reckon there is a higher incidence in tourism — probably 30%. That is what it was. They are not just back of house but very much on the front line. Given the way the school-leaving population has gone here, it seems to be a fact of life that they will be a significant proportion of the work force going forward.

Some of the people are exceptional but some need induction. This is not about dying hair red or anything like it. Where these people need help — along with some young Irish people — is knowing what to do when guests turn up and want to find out what is happening on the night or where they can go. Those in older age groups in the industry were top notch in this regard and we are fearful of losing something in that core. If there is any induction, it is around educating these people on what is going on locally. The committee knows what I am getting at.

Senator Doherty mentioned a point about An Grianán in Donegal, which was very useful. He spoke about something which has been there for so many thousands of years and people want to know what it is about. We have many very good tourist attractions and we may not be very good at telling people about them and where they are or interpreting them and bringing them to life. Tourists today really want to immerse themselves in the culture of another country. They are not all that keen just to look and see, they want to live it and find out as much as possible. We, as an agency and industry, must respond to that.

The cost of eating out and drinking was highlighted by Deputy Ring and we could not agree more with his comments. Our surveys have dealt with this year in and year out. The issue is not the cost of getting here, the cost of the taxi or bedroom but the cost of eating out and drinking. Arguably, in some cases it is outside the tourist industry — even the cappuccino or cups of coffee are affected.

Signage is a perennial problem that has come up a few times. The National Roads Authority is doing quite an amount and we are working very closely with it on issues such as tourist signage, which we are very happy with. The secondary road network is much more of an issue and is really the responsibility of the local authorities. We know a fund is available within the Department of the Environment, Heritage and Local Government to correct that, and some local authorities are better than others at utilising it. We are prioritising the routes of key interest to tourism and approaching each local authority to do something in that regard.

We agree totally with the comments made on bed and breakfasts and I am glad the issue of high rates was raised. It is a particularly big issue for the tourism industry in this year, when there has been a three-figure percentage increase in some cases. It is quite a burden on tourism businesses.

There was a general comment about doing more outside Dublin. I should really pass this over to Mr. Concannon because, quite frankly, much of what we do, if not the bulk of it, is outside Dublin.

Mr. John Concannon

From a marketing point of view our major focus in the Irish market, as Deputy McGinley pointed out, is to encourage Irish people to take breaks in Ireland and that market has grown by approximately 40% in the past five years. The focus of that is on festivals and getting people to attend events like the fleadh cheoil and traditional music festivals and participative festivals. For example, Gael Force in Westport this year was Europe's biggest adventure race, with people coming from all over. Festival events are a central plank of our marketing programme, although we support their operations also.

In the international marketing arena, Fáilte Ireland has a remit for regional marketing and all of our focus is on driving business to the regions. We look at it in terms of three broad areas: the east coast, which has a heritage focus, the lake lands in the centre, which covers Cavan-Monaghan and the Shannon spine, and the western seaboard, where the focus is on authentic Ireland, with the language and the culture. What we have tried to focus on is picking specific points of access. For example, Knock Airport is a big focus for us, as are the airports in Donegal and Cork, as they bring direct flights to the regions. We work around those. The other side of it is the car ferries which bring people for car touring. All of our funds go towards driving people directly into the regions. We have had some success in this regard in recent years. However, it is very challenging and it is a competitive marketplace.

Mr. Shaun Quinn

Golf was raised by Deputy Kennedy. I agree with the Deputy. We have a fantastic golf product, second to none in terms of the 18 holes to be played. We probably could improve what some might call the 19th hole in terms of customer service. We need to market it more and that is what we will be doing from next year. In keeping with the point made about food and drink prices, there is an issue with some courses — although not too many — of excessive green fees, which could blot the image of the industry. That has not happened so far but it does need to be addressed.

Chairman

I thank the representatives. If there are any specifics that Fáilte Ireland is in a position to deal with, I have no doubt it will deal with them in due course. I thank members for their attendance, contributions and questions. Many of the questions were stimulated by the initial contribution of the chief executive, Mr. Shaun Quinn. The meeting went on much longer than expected. That is quite positive because it is an indication of members' interest. Practically every member has contributed and asked questions, although some, unfortunately, could not remain with us as they had to attend other meetings running in parallel. This represents no disrespect to the members of Fáilte Ireland. I thank the representatives on behalf of all of us.

Before I conclude, while wearing my north-west hat, I wish to make reference to the Pro-Am tournament in Ballyliffin this year, which was an outstanding success despite the inclement weather conditions, which did not dampen the enthusiasm of those participating or the many thousands who were there over the weekend. It was a very important event for one of the most peripheral areas of the country. I also want to refer to the success of Rally Ireland. I attended the first meeting with Deputy James McDaid many years ago when I was in the European Parliament. Little did I think it would be such a success. What stands out in my memory is the thousands of people who attended at Mullaghmore on the final Sunday. It went out to millions of viewers all over the world. I am delighted Fáilte Ireland will still be involved with that at the beginning of next year.

I would not go off despondent and take the view that it is doing nothing. We know it must work within its remit, and even so, the representatives went outside its remit at times to answer some of the questions. As public servants, their remit is decided by the Government. With regard to Tourism Ireland, there is another day for that. It is like having the European Parliament in Strasbourg — it is a small price to pay for peace in Europe. This could be part of the Good Friday Agreement.

Mar focal scoir, gabhaim buíochas libh as ucht teacht isteach anseo inniu agus bhur thuaraimí maidir le Fáilte Ireland a nochtadh linn. Tá mé cinnte go mbeimid ag teagmháil le chéile amach anseo.

The joint committee adjourned at 6.25 p.m. sine die.