JOINT COMMITTEE ON ARTS, SPORT, TOURISM, COMMUNITY, RURAL AND GAELTACHT AFFAIRS debate -
Wednesday, 17 Dec 2008

Roles and Functions: Discussion with Shannon Development and Dublin Tourism.

Chairman

Ba mhaith liom fáilte croíúil a chur roimh an toscaireacht anseo inniu ó Forbairt na Sionainne agus iad siúd atá anseo ó Turasóireacht Bhaile Átha Cliath. Beidh deis acu cur i láthair a dhéanamh anseo tráthnóna. Ina dhiadh sin, beidh deis ag comhaltaí an choiste ceisteanna a chur orthu. Tá coinne tábhachtach agam ag 4.15 i.n. ach beidh sibh ábalta leanúint ar aghaidh gan mé. Beidh ormsa imeacht ag 4.10 i.n.

I welcome Vincent Cunnane, chief executive of Shannon Development, and his colleagues, John King and Pat Daly. I also welcome Frank Magee and his colleagues, Ciara Sugrue and Kieran McDonald from Dublin Tourism. It is a coincidence that both of these chief executives hail from the most important county, the Alaska of Ireland. All the witnesses are very welcome. I call on Mr. Cunnane and then Mr. Magee to make their presentations and then we will have questions.

Dr. Vincent Cunnane

I thank the Chairman and the committee for the opportunity to appear before it to speak about the tourism activities of Shannon Development. I am here today with my colleagues John King, tourism director, and Pat Daly, tourism marketing manager.

Shannon Development was set up by the Government in 1959 to promote Shannon International Airport. Over the years, our brief has grown and we are now Ireland's only dedicated regional economic development company. Our mandate is to develop the economy of the Shannon region, which encompasses Clare, Limerick, north Tipperary, south Offaly and north Kerry. These areas together have a population of more than 450,000 people. For clarification, north Kerry is not part of the Shannon region for tourism purposes. Our primary focus is on driving regional economic development in the Shannon region at the centre of a dynamic west of Ireland. We achieve this by ensuring that the more developed areas of the region reach their full potential, addressing the needs of the less developed parts of the region, creating demand for the Shannon International Airport gateway and delivering on a new vision for tourism in the Shannon region. That vision can be encapsulated in the phrase, "Delivering a better future for the Shannon region".

The world economy is changing from an industrial to a knowledge-based economy. This is because computers and the Internet have changed the way people work. Most employees today work with their heads rather than their hands. To compete in this knowledge age, we need to focus on such things as infrastructure, education, training and broadband Internet connectivity. Shannon Development is working to deliver in these areas in all parts of the Shannon region. This progress will encourage companies to locate here and create jobs.

The Shannon Development property portfolio is a key driver of economic development in the region, providing property-based solutions for foreign and Irish businesses. Shannon Development uses its property portfolio as a developmental and promotional vehicle to support its regional economic development activities. Our properties are located at numerous sites throughout the Shannon region, which are specifically planned and zoned for industry, enterprise and tourism. These sites are serviced by high-capacity utilities, including water and power, with advanced telecommunications technologies also available. Key sites near large population centres such as Shannon, Limerick and Ennis offer easy access to national primary routes as well as air and rail links. We also have space available in small county towns and rural villages, offering an attractive quality of life, in more compact business and enterprise centres suitable for start-up enterprises and small businesses. Prime industry and enterprise locations include the Shannon Free Zone; the National Technology Park in Limerick and other business parks such as Raheen Business Park, with similar parks in north Kerry, Clare, north Tipperary and south Offaly; and key tourism assets such as Bunratty Castle and Folk Park and King John's Castle in Limerick.

As the regional tourism authority for the Shannon region, Shannon Development has an overall mandate which includes tourism development. Our aim is to ensure that the Shannon region is regarded as a high-quality tourism destination within Ireland and that we maximise tourism numbers and revenue for the region. Maximising traffic and sustaining services through Shannon Airport is a key objective. The company's role in tourism marketing is complementary to the international destination marketing role of Tourism Ireland. Shannon Development implements a number of direct campaigns at operator level that builds on the work of Tourism Ireland. In the domestic market, Shannon Development is responsible for one of the seven tourism regions. The company implements its tourism strategy as part of an integrated regional economic development approach. The tourism team is a full directorate in Shannon Development, with staff and budgets allocated to marketing, enterprise support and product development. An independent regional tourism board under the chairmanship of Michael Houlihan provides strategic guidance and leadership for regional tourism development. A three-year tourism strategy for 2008 to 2010, which has been circulated, was prepared with widespread input from the tourism industry and is now being implemented.

Our tourism marketing campaigns are promoting the region at home and overseas as a leisure and business destination. We shape our campaigns to meet current trends such as the short break phenomenon and sustainable tourism. We are increasing the use of Internet services and e-marketing to promote the region. We are also concentrating on areas and products that can be promoted outside of peak season. A key area is our work with airlines, airline vacation companies and international tour operators to maximise the visitor traffic in and out of Shannon Airport, thereby generating bed nights in the Shannon region. In delivering the tourism marketing role, we work closely with Fáilte Ireland, Tourism Ireland, Shannon Airport and the other regional tourism authorities on super-regional initiatives in particular, as well as the tourism and travel industry.

We manage a network of eight tourist information offices and 16 information points in the Shannon region, which provide information, reservations, advice and guidance to more than 350,000 visitors each year. Shannon Development is working on a range of new tourism concepts and projects across the region. These include: walking, cycling and water-based trails; Limerick riverside city; Lough Derg and River Shannon developments; the mid-Shannon tax corridor scheme; and rural tourism opportunities, including the Burren and other county areas. We also work closely with Fáilte Ireland and the Department of Arts, Sport and Tourism in implementing the tourism development agenda as part of the national development plan.

Shannon Heritage, a wholly owned subsidiary of Shannon Development, endeavours to preserve the region's culture and heritage, traditions and customs, castles and places of history for future generations to enjoy. Our attractions introduce visitors to the magic and mystery of the prehistoric, Celtic, Viking, Anglo-Norman and native Irish communities, thereby covering a period from 5,000 years ago to the present. The Shannon Heritage portfolio has developed from a single product in 1963, the medieval banquet at Bunratty Castle, to a total of eight daytime visitor experiences and five evening entertainments. All the expertise gained over the years is being brought to bear to ensure that all our visitors have a fun, value-for-money experience. To date, almost 4.5 million people have enjoyed visits to Shannon Heritage's unique venues, such as Bunratty Castle and Folk Park, King John's Castle, Craggaunowen and others.

The tourism industry is experiencing a downturn in business in 2008 in line with most consumer sectors in the economy. The forecast by Tourism Ireland is that overall, international visitors will be down this year by 3%. Along the west coast, the impact is likely to be even greater and a reduction of 10% in international visitor numbers is possible. Despite this, the results from the Shannon Development tourism programmes for 2008 are very encouraging. Programmes and projects directly invested in, and promoted by, the company generated 234,000 passengers through Shannon Airport, leading to 426,000 bed nights in the region. This will generate a €43 million return to the regional economy this year, which represents 12% of the overall market and a tenfold return on investment. The short-term outlook for tourism is for a difficult 2009 and the company is committed to continuing its investment in marketing and product development to win business for the region and to be well positioned to take advantage of the economic upturn, when it arrives.

I thank members of the joint committee for the opportunity to make this statement and my colleagues and I will be happy to answer any queries they may have regarding our tourism activities.

Chairman

I thank Dr. Cunnane for his presentation. I now invite Mr. Frank Magee to make his presentation.

Mr. Frank Magee

Ba mhaith liom buíochas a thabhairt don choiste inniu as ucht an cuireadh a bheith anseo. I wish to thank the Chairman and members of the joint committee for the invitation and opportunity to discuss some of the issues pertaining to tourism in the Dublin city region. As they are aware, Dublin Tourism is responsible for the servicing, marketing and development of tourism in the Dublin city region. Although a subsidiary of Fáilte Ireland, we operate independently as a partnership between Fáilte Ireland, the four local authorities in Dublin and the trade in Dublin. Our board was reconstituted in May 2007 and is made up of nominees of the local authorities, the Irish Tourist Industry Confederation and Fáilte Ireland. At that time, the other regional tourism authorities were integrated into Fáilte Ireland. The decision to retain Dublin Tourism as an independent legal entity was taken in response to the expressed wish of the industry and to protect Dublin's position as a top city break destination in Europe.

The short break market has been the fastest growing segment in tourism internationally. Dublin is in competition with other cities, such as Vienna, Barcelona, Prague and Amsterdam, rather than with other countries. My colleagues in Tourism Ireland and Fáilte Ireland have already outlined to members how they operate in the international market place. Business tourism is an important segment of the Dublin tourism market and we have a dedicated unit, the Dublin convention bureau, the role of which is to focus on the marketing and promotion of Dublin as a business destination. Dublin Tourism at all times works in conjunction with Tourism Ireland to ensure that we get maximum return on investment and synergy of our efforts in the international markets.

In 2007, Dublin welcomed 4.5 million overseas visitors, who spent €1.45 billion — a contribution to the Irish Exchequer in excess of €700 million. This represents 58% of the total number of overseas visitors to Ireland and 35% of the total overseas spend. The average length of stay in Dublin is 4.5 nights, which is significantly higher than the European average of two nights. A total of 57% of overseas visitors to Dublin travelled on to other regions. Dublin Tourism serviced 1.6 million callers to our four tourist information offices in 2007, or 60% of all callers to the national tourist office network. Dublin Tourism's offices give information and make bookings to all parts of the island and 30% of all bookings in our offices are to other regions.

Dublin Tourism is funded by Fáilte Ireland, the four local authorities, the trade and by commercial activities. A total of 80% of Fáilte Ireland's investment is directed to the operation of the four tourist information offices. The Dublin Airport and Suffolk Street offices are open seven days a week and the airport office operates from 8 a.m. to 10 p.m. The offices are very efficient and while the nature of the business of offering advice and making reservations is time consuming, the average cost is €1 per caller. In 2008 we formulated a new plan funded by the trade, Fáilte Ireland and the local authorities, which resulted in an additional €4 million marketing activity on a joint public sector funding of €550,000. Almost all the activities were carried out on our behalf by Tourism Ireland. Our website, www.visitdublin.com is regarded as the leading European cities’ tourism website, with almost 9 million visitors in total this year. It had more referrals from Tourism Ireland’s international websites than any other site. The www.visitdublin.com site is run on a commercial basis and contributes significantly to Dublin’s success.

The Dublin Pass city card developed by Dublin Tourism is a European brand leader that brings together 30 different day visitor attractions, using chip technology, resulting in increased visitor expenditure, offering fixed price value over one, two, three or six day periods. A total of 97,000 visits were made to visitor attractions this year using a Dublin Pass.

Dublin Tourism's iWalks product is another example of Dublin Tourism's innovation and successful use of technology. We were the first city in the world to offer downloadable narrated walking tours of the city free of charge. Since their introduction in 2007, 13 different walks have been developed and over 200,000 iWalks now have been downloaded. Dublin Tourism operates The Dublin Writers' Museum, The James Joyce Tower, the Shaw Birthplace and Malahide Castle on behalf of Fingal County Council, as commercial operations. None of our attractions receives an operational subvention, which is unique.

Last year was a challenging year for tourism in Dublin. Apart from the economic downturn, we have faced the challenge of having an additional 10% increase in hotel capacity over 2007. This increase in capacity and downturn in demand will result in a fall-off in revenue of up to 20% in the hotel sector, a figure similar to that being experienced in the retail sector. The challenge for us in 2009 will be to increase our market share as standing still will not be enough. There will be increased competition as a result of the decrease in the number of flights available and the increase in the number of unemployed, leading to a smaller market of people travelling.

Dublin is ideally positioned to take on this challenge. We have an excellent stock of high quality hotels across all price ranges. Our range of restaurants is excellent and caters for all tastes and price brackets. Our visitor experiences are world class and international access is good. Value is a key message in our 2009 campaigns.

We welcomed last night's opening of the O2 Arena. Next year will see the celebrations of the 250th anniversary of Guinness, the 125th anniversary of the GAA and the 100th anniversary of SIPTU and the opening of the Libeskind Theatre. In 2010, the convention centre, Dublin, Lansdowne Road and terminal 2 will open. Dublin has won the designation of European city of science in 2012 and will also host the International Eucharistic Congress. This list is not exhaustive, but gives an impression of the good news stories that we are able to send around the world. We interact on an annual basis with in excess of 1,000 international media and will ensure that no opportunity is lost to promote Dublin.

Apart from the economic downturn, there are obstacles that can have a negative impact on tourism. The first of these is the difficulty in some of our markets of getting visas to Ireland and the cost of the visas. Visitors coming through Britain or Europe require separate visas for Schengen areas and Britain, adding to the cost and delay in processing. While we support the extension of the Luas and the construction of the metro, there will be significant disruption to the city centre during the construction phase. Any downturn in business as a result of these works will compound cash flow difficulties arising from the economic downturn. While there is a great deal of optimism about Dublin as a destination and we are well positioned, we should not underestimate the scale of the challenge ahead of us.

Chairman

Now that the two brief, but comprehensive contributions have given the committee an overview, members have an opportunity to speak. The first opportunity will go to the Fine Gael spokesperson, Deputy Mitchell.

Deputy Olivia Mitchell

I thank the witnesses for their presentations. I will start with the first presentation on Shannon. When I last met Dr. Cunnane, it was in Shannon. The issue that was on his mind at the time was the area's lack of high-capacity, high-speed broadband, particularly in light of the possibility of a regional conference centre being built there. From recent inquiries, I understand that Shannon Development either conducted or commissioned a consultancy study on the conference centre's feasibility. How does the situation stand?

According to a reply to a parliamentary question, Shannon Development's expenditure on consultancies is a hefty €6 million, approximately 20% of its budget. In asking this question, I am conscious that money is tight. Could some of Shannon Development's consultancy work be done in-house, given the fact that its annual report states that 344 people are employed in integrated economic development, including within its subsidiaries? In light of there being so many people, could in-house expertise not be utilised? The figure is twice the number of staff working in the Department of Arts, Sport and Tourism.

The brief's growth over the years was mentioned, but many of Shannon Development's functions have been duplicated by, if not transferred to, other bodies. For example, the IDA has taken over foreign direct investment, Tourism Ireland and Fáilte Ireland have taken over responsibility for tourism, indigenous enterprise is being handled by Enterprise Ireland and the growth and promotion of the airport, while it should have been a Shannon job, is being handled by the Dublin Airport Authority. Have staff numbers grown or contracted as a result of these functions being taken over?

I want to ask about another matter, namely, the mid-Shannon tax corridor scheme. Long-promised, it was initiated late. Are any proposals from the scheme coming on stream? It came to fruition at the wrong time, but it has considerable potential and I hope that it becomes successful. I welcome the fact that, to enhance the tourism experience and product development, specialist activities are being pursued. If we are ever to see growth again, it will be in those areas.

I must ask a difficult question, as we are all conscious of the excesses that came to light in FÁS. Even its board has condemned them. Can the witnesses assure the committee that, in both corporate and personal terms, there are no parallels in management styles or practices within Shannon Development? We must ask these difficult questions of agencies appearing before us, given the straitened circumstances and the difficulties facing the public finances.

I will have easier questions for Dublin Tourism. I was surprised to learn that it is funded via Fáilte Ireland and the local authorities. Am I right in saying that Shannon Development is funded directly by the Department? The witnesses can revert to this matter.

I thank Mr. Magee for his presentation. We always believe that capital cities will not suffer from the difficult days ahead as much as regions, but a recurring theme in our discussions on Dublin tourism in particular is the matter of hotels. It was mentioned that there are many new hotels and bed nights, but we are continually told that our hotels are small. Does or will this present a problem in the context of the new conference centre? For example, if the desired demand for the conference centre materialises in 2010, will any hotel be able to host the dinner?

Senator Alan Kelly

I will go in reverse and start with Dublin Tourism before moving on to Shannon Development. I welcome the witnesses, many of whom I have known for many years. In the past 18 or 19 years, Dublin's tourism share has increased substantially because of many factors, including our guests' work. I have never met workers who were more zealous.

I have an issue with how Dublin Tourism is constituted. I understand why Dublin must be treated differently as a destination and I appreciate the commerciality and the amount of revenue generated through Dublin Tourism's activities. However, Dublin and Shannon are outside the realm of other tourism agencies and are separate from the structure under which the other five regions fall. Several times, I have placed on record my belief that this situation must change.

The increase in the number of visitors to Dublin is impressive, but I have a number of questions. Competitiveness is becoming an issue. From the point of view of competition with European destinations such as London, Amsterdam, Paris and Madrid, what are the top two or three issues being brought to Dublin Tourism's attention by visitors through its surveys conducted with Mr. Brian Maher and Fáilte Ireland? Dublin has unique issues in this regard.

Some 30% of tourist information office, TIO, bookings, are made in the other regions. Based on my previous experience, I would estimate the number at 10,000 bookings, which works out at 3,000 bookings outside Ireland. These figures, while substantial, are not huge.

Given that Dublin is the main access point for Ireland, I would like to know whether Dublin Tourism has a remit in facilitating tourists who wish to tour the country. A Dublin-based agency could play a key role in promoting the entire country.

When Mr. Magee spoke about properties in Dublin, he was referring in particular to hotels. It is not easy to book smaller properties through Dublin Tourism's website. I ask him to comment on the distribution of bookings for guesthouses and bed and breakfasts. Do issues arise in regard to working with other tourism agencies? As we are all aware, a multiplicity of agencies operate in this area.

Shannon Development is possibly the perfect model for an economic development agency. Unfortunately, however, its success has not been replicated around the country. Contrary to Dr. Cunnane's claims, the reality is that Shannon Development's brief has been reduced. It has lost influence in areas such as air traffic promotion, foreign direct investment and indigenous industry and has become basically a tourism development agency with a property management portfolio. I acknowledge the good work it has done over the years, however. I come from what is probably the most scenic part of the Shannon region, north County Tipperary.

Deputy Timmy Dooley

It is almost the most scenic area.

Senator Alan Kelly

Deputy Dooley has not visited The Lookout recently.

I would like to learn more about the success of the mid-Shannon corridor investment scheme given the issues that have arisen in respect of its timing.

While Dublin's share of visitors has increased, the Shannon region's has decreased from 15% to 8%. I have previously spoken in this committee about the hole in the doughnut effect. I am aware that the absolute numbers are increasing, but the percentage has decreased by almost half. I ask the reasons for this decrease.

I understood that destination product development schemes were to be implemented for weaker areas such as County Tipperary and south County Offaly but no announcements have thus far been made in this regard. What is the current position on these schemes?

What work has been done on e-marketing and has progress been made? A number of recent Government e-projects have failed. What is the fate of the business tourism initiative, Meet Limerick-Shannon?

As we are all big Munster fans, I wonder if Shannon Development has bought a box in Thomond Park and, if so, how much it costs and whether it has been a good investment. I acknowledge this is part of the agency's branding and I often meet its representatives at matches.

Why does Shannon Development have two boards? It does not make sense that the agency has a tourism board and a development board.

Deputy Mary Alexandra White

I will confine my remarks to the Shannon area, for which I mean no disrespect to Dublin Tourism. I am interested in product development and, in particular, walking, cycling and water-based trails. Have any problems of access arisen regarding long distance walking routes? I ask for an indication of the number of people who partake in these holidays.

Is Shannon Development working on green tourism products or an eco-tourism label, such has been developed in north County Leitrim and other areas? These products include local and regional foods, farmers' markets and green box deliveries to green beds and breakfasts and hotels which limit their waste on towels and water. Most hotels and tourism providers are already moving in that direction but these efforts should be marketed.

I hate the word "product" and prefer to add an "s". It is a case of the grammar police. In regard to tourism products for backpackers, which are becoming more popular than package tours or expensive short breaks, what are the figures for backpackers and short stay visitors to the region? That sector is about to grow significantly and, having written a walking guide for the south-east region which received good feedback in terms of people's experiences of bed and breakfasts, I can outline some of what walkers desire from their holidays. They want a comfortable bed, a drying room for wet boots and clothes, good food which is locally sourced and, perhaps, a car to bring them to the start of their walk and collect them at the end. These are simple matters but they could dramatically increase the number of walkers coming to Ireland. In terms of numbers, walking has bypassed fishing and golf activities.

Dr. Vincent Cunnane

I will deal with members' questions sequentially. I will ask my colleagues to respond to some of the questions asked by Deputy Olivia Mitchell.

Broadband roll-out remains a key issue for the country and is part and parcel of the physical infrastructure. In response to a growing need in the region for broadband and with the co-operation of the local authorities in Limerick, Clare, north Tipperary and south Offaly, Shannon Development established Shannon Broadband Ltd. to deliver MANS programmes. Approximately 50 km of fibre optic cable has been installed in Limerick under MANS I and 57 km has been installed in eight regional towns under MANS II. However, a major problem remains in respect of backhaul costs from the regions to Dublin and this needs to be addressed centrally. I ask my colleague, Mr. King, to address the issue of conference activity.

Mr. John King

Earlier this year, the Government initiated a report on conference activity. Fáilte Ireland had a task force or steering committee, of which Shannon Development was part. We sat on that, along with the tourism and travel industry, led by Fáilte Ireland. Indecon consulting group was given the job of doing an economic analysis of the value of creating a new conference centre facility in the mid west, primarily in the Limerick-Shannon location. Indecon has completed its work and submitted the report to Fáilte Ireland. The steering committee has signed off on it and it has gone to the Department of Arts, Sports and Tourism for final review.

Dr. Vincent Cunnane

With regard to the quoted consultancy figure of €6 million and 20%, I do not have such figures to hand but they seem to be excessively high, although I have been at the company a short time. I will have to come back to the committee on some of the details of the figures. As a company that brings in property, tourism and economic development activities, we must bring in consultants for design and other aspects. That figure seems excessive but I will come back to the committee on it.

Deputy Olivia Mitchell

I thank the witness.

Dr. Vincent Cunnane

The Deputy commented on our role. Our numbers have dropped from approximately 190 about four years ago to approximately 130 currently. This relates to loss of function. A number of our colleagues transferred to Enterprise Ireland when the indigenous mandate in the region went to that body, except in the Shannon free zone, where we also retain the foreign direct investment mandate from IDA. The Shannon free zone is a Shannon Development activity with a mandate for both indigenous and foreign direct investment. The Shannon free zone has over 7,000 people employed in over 100 companies.

The role has changed somewhat. We work in a complementary fashion with Tourism Ireland, which has a high-level marketing role promoting Ireland. Shannon Development comes in on the back of that high-level marketing role promoting Ireland and gives targeted deliverables, working with the airlines and operators to bring people to the region through Shannon Airport and provide bed nights.

We are an integrated economic development company and can integrate the activities of tourism with those of other forms of development, such as broadband activity, and wrap that up in property solutions. We are endeavouring to integrate much more of these activities and get added value for our activities in a much more horizontal way than with purely tourism, property and development activity.

Mr. John King

The mid Shannon tax scheme is a new capital allowance scheme — rather than a grant scheme — launched by the Taoiseach at the end of June this year in Birr, County Offaly. It comprises a region of the midlands of Ireland, which Senator Kelly referred to as the hole in the doughnut region. Its emphasis is to get new product development, innovation and tourism into that region. It is a worthwhile policy endeavour.

Since the launch the state of the economy has changed dramatically for all of us. There has been significant promotion of the scheme, resulting in very strong interest from potential projects throughout the region. Shannon Development and Fáilte Ireland share the region between them. We have a joint executive team doing the promotional work, beating the bushes and speaking to potential entrepreneurs.

There has been very strong interest and many queries in respect of how projects can fit into the scheme appropriately, etc. The key dates for projects going forward for certification is May 2009, and they have a further two years to get built up in order to come within the parameters of the scheme. The key message we have put out for the past two or three months is that those dates, given everything else happening, are very tight. An extension would help the scheme deliver worthwhile projects. Perhaps a 24-month extension is the kind of timeframe we must speak about.

Deputy Olivia Mitchell

I thank the witness.

Dr. Vincent Cunnane

With regard to FÁS and our activities relating to travel, last week a parliamentary question was put down on these aspects. I guarantee that what we operate within Shannon Development is a very efficient and process-driven activity with regard to travel, with appropriate levels of sign-off at all levels. In 2007, there were approximately 80 flights from Ireland and over 90% of those were economy class.

We initiated a review earlier in the year — and prior to any revelations — of our travel policy to ensure we were in line with stated departmental processes. I stand over the report, which found we were operating in that way.

Deputy Olivia Mitchell

I do not know if it applies to agencies but most Departments must measure outcomes. Does Shannon Development do so?

Dr. Vincent Cunnane

Yes.

Deputy Olivia Mitchell

Is that published?

Dr. Vincent Cunnane

It is oriented around a business plan, with key performance indicators, actions, responsibilities and timelines associated with each action. This enables us to track where we are on delivery of strategic objectives through those business plans.

Deputy Olivia Mitchell

Is it published?

Dr. Vincent Cunnane

The business plans are not published. Tourism has key targets, which are published. There is a tourism strategy — the previous one has been published. The deliverables in terms of the intricacies of the business plans are not public.

Deputy Olivia Mitchell

We scrutinise public finances and how they are spent. The witness might find these questions belligerent or aggressive but it is up to us to judge if the money is well spent. The only way we can do so is if we know outputs and outcomes. I presume the body does not have a statutory requirement to publish that.

Dr. Vincent Cunnane

We publish our key results each year. We have an end-of-year statement which will come out in early January, highlighting our key targets and how we performed against that. I can take the example of tourism, as I highlighted today, where we track the investment coming in behind the Tourism Ireland marketing and our own direct marketing activities. We put approximately €2.7 million into direct marketing this year and brought in additional flights to Shannon and bed nights based on those, leading to approximately €43 million in investment return for the region.

Deputy Olivia Mitchell

That is a good return.

Dr. Vincent Cunnane

Yes. Across the company we have the ability to track where our investment goes and the returns on that.

Deputy Olivia Mitchell

Yes.

Dr. Vincent Cunnane

This leads to the question of funding activities. We are a self-financing company which generates its own income from Government assets such as properties within the region. We generate a rental income from that, which goes to pay our own salaries and provides for developmental purposes and tourism activities as well. In essence, there is approximately €6 million in activity through tourism, and we receive only a small line from the Department of Arts, Sport and Tourism. Activities detailed before the committee are generated from our income lines.

Deputy Olivia Mitchell

They are financed from State assets.

Dr. Vincent Cunnane

That income goes towards new property, product and economic development, the Shannon free zone, Shannon broadband and a range of other activities. It represents very good value for the State from those assets.

There are approximately 210 people in Shannon Heritage and approximately 130 in the main company. That number has been dropping over the past number of years.

Deputy Olivia Mitchell

I thank Dr. Cunnane.

Chairman

Has Mr. Cunnane dealt with all the questions addressed to him?

Dr. Vincent Cunnane

Not Senator Kelly's questions.

Chairman

We will move on to prevent duplication. We will deal with Shannon first and then return to Dublin.

Dr. Vincent Cunnane

The mid-Shannon scheme is okay. The drop in the percentage share——

Mr. John King

The visitor trends.

Dr. Vincent Cunnane

I might make an introductory remark about that. Over the past number of years, visitor volume to the region from international markets has been reasonably steady. It increased through the 1990s and was at a high in 1999-2000. It dropped off a little in 2001-2002 but has since returned to a fairly steady level. The difference is in the length of stay. That has dropped off, particularly in the American market and also in the UK and Europe markets. That is where we have lost the bed night share the Senator referenced. It is the key driver behind our marketing approach. We changed our model to go after the bed night market as opposed to merely counting visitor volumes.

Senator Alan Kelly

Has the Heathrow issue had an effect?

Mr. John King

Yes. At the start of this year, Aer Lingus discontinued the direct service from Shannon to London-Heathrow. Part of the traffic on that route came for the very important business link into the west and mid-west of Ireland. It serviced business, business tourism and leisure. On the leisure side we estimate that up to 40,000 tourists were lost to that link in the current year.

Mr. Pat Daly

In 2004 we lost the north Kerry area which had to adjust its numbers. That was a big area and a strong producer of visitor numbers. It had to be adjusted in the new marketing plans. It also coincided with the big move to the weekend break, city and capital breaks. It took a little time to catch up with that . In line with what Mr. King said, those factors allowed us to slip a little but we are currently back on market share.

Senator Alan Kelly

The totality of the Irish market, from 14% down to 7% is——

Mr. John King

It is down to about 10% I would say. There has been a drift of bed nights, particularly from the west of Ireland to the east coast. The success of Dublin and its city break culture has generated a lot of bed nights for the capital. In terms of short breaks, some of those have been at the expense of the west of Ireland. There have been product development and marketing initiatives along the west coast from Donegal to Kerry to tackle that and get more bed nights for the west of Ireland.

Senator Alan Kelly

There was a specific destination product for the weaker areas in the Shannon, particularly in north Tipperary and south Offaly.

Mr. John King

As part of our ongoing research and development of product we have some work under way at present with an external consultant body to look at the next five years and distinguish the key projects throughout the region that would make sense and give us comparative advantages. We are looking at south Offaly and north Tipperary and at County Limerick, Limerick city and out into Clare. We have not yet finalised the product. but are looking at particular locations and sites to see if we can get the right match between projects that would fit the sites we can identify for which there is international demand, and those that would fit into the tourism infrastructure in the locality. To return to the mid-Shannon tax scheme, that is a very important vehicle for us. If we can get the right fit there, and work the south Offaly-north Tipperary area within the boundaries of the scheme, it will make it easier to bring promoters to the table.

Dr. Vincent Cunnane

I will bring in my colleague, Mr. Pat Daly, to talk about e-marketing and Meet Limerick-Shannon.

Mr. Pat Daly

On the e-marketing side, our main site is co-hosted throught the Fáilte Ireland platform and we are content manage it with them. That is a new site and a new programme has been laid out there. It probably had a shaky start but is now bedded in and is working quite well. We recruited an e-marketing officer this year who is not alone the content manager on that site but is also working with the trade to dial up into specialist sites and tour operator websites. In that way, we are doing a lot in e-marketing. It is the way forward for a lot of businesses. It certainly is bedding in more easily.

Meet Limerick-Shannon is the conference company for the Shannon region, particularly between Limerick and Clare. It is a private-public company that is owned by the Irish Hotels Federation, IHF, Shannon region branch and the chamber of commerce. It went through a restructuring during the year and relocated from the chamber of commerce in Limerick into Shannon Development as a co-location. It reports to me as the tourism marketing manager. That reorganisation has worked very well. So far this year it has secured 18 conferences for the region which will generate approximately 4,500 delegates and €6.5 million in revenues. There are four further decisions to come on conferences and events. The company has gone through some change and has been restructured and so far we are quite happy with progress.

Senator Alan Kelly

I had two other points.

Dr. Vincent Cunnane

I will deal with them quickly. With regard to Thomond Park, that venue has reopened and will be a major attractor for Limerick city. On the few occasions to date it has been utilised for major events it has had a very positive impact on Limerick city and beyond.

To answer the Senator's question, we have entered into a long-term marketing relationship with Thomond Park whereby we co-market a number of activities. We are co-ticketing on some of the added value products that Thomond Park has, such as its museum, joining it with King John's Castle, which is about a mile or so down the road. We see Thomond Park as a very important part of what is happening in Limerick city. From a marketing point of view, it is vitally important that Shannon development is part of that.

We have taken a box in Thomond Park that we utilised on two occasions. We have access to that box as part of our marketing strategy and it allows us to market certain products to a potentially very wide audience of industrialists and tourism interests.

Senator Alan Kelly

What is the cost?

Mr. John King

The retail cost is about €20,000 per annum but in the marketing deal we put together with Thomond Park stadium we get several arrangements in terms of advertising and promotion which reduces that cost to a very small amount.

Senator Alan Kelly

The cost is €20,000 per annum.

Deputy Olivia Mitchell

Is that over ten years?

Mr. John King

Over five years. It is reviewed on a yearly basis.

Senator Alan Kelly

The last question concerned the two boards

Dr. Vincent Cunnane

The tourism board is made up of distinct tourism interests. These include the tourism industry, the local authorities that obviously have a huge part to play in delivery of tourism, and ourselves. It is chaired by a former chairman of Shannon Development. That board is very tourism oriented and was responsible for the putting together of the tourism strategy for the Shannon region, ably assisted by Shannon Development.

The wider Shannon Development board reflects the wider interests of Shannon development in terms of particular economic development, property aspects and the fuller activities of Shannon Development. This is where the integration of activities starts and where tourism is but one of those activities. It works effectively. Mr. John King sits on the tourism board and allows the executive to operate with the board. We find that it all works, with very little duplication of activities. Perhaps Mr. King wishes to say something.

Chairman

I am conscious of the time. Deputy Mary White had questions and there are other members who also wish to raise some issues. We must bear in mind that Dublin Tourism must respond. We shall move to Deputy Mary White's questions

Dr. Vincent Cunnane

These relate specifically to walking and green tourism, and Mr. King will respond.

Mr. John King

With regard to our trails activities, the Deputy asked about the increase in opportunity for activity-based breaks in Ireland, as a way of getting visitors in, looking after them well and giving them something in which they are interested. We have endorsed that approach over the past few years and have put significant investment into the Shannon trails. We will probably invest €3 million to €4 million in trail development in the period 2007-09. This primarily involves developing loop walks and the associated physical and supporting infrastructure, such as ensuring people are aware of the location of the walks and the availability of digital maps and other materials.

The issue of access problems was mentioned. We have worked with the national system in that respect. In some cases we have been obliged to find alternatives and change routes to ensure the loops were contiguous and we have done so where it makes practical sense. In recent times we have found that such cases occur less frequently and there seem to be decent, workable agreements emerging and we are taking advantage of these.

The matter of ancillary developments was referred to and people are examining the opportunities for backpackers and so on. An initiative introduced this year involved the launch a trail-friendly accommodation charter, whereby we put together a programme to encourage the bed and breakfast operations and others near the walks to work with us. If they provide a certain level of services, we will work to introduce training and financial support for drying rooms, packed lunches and so on. This will enable visitors to have a good quality experience while in the region. Some 50 bed and breakfasts have agreed to participate in the programme this year and we are proceeding with a vetting process in that respect. We will be able to further develop the programme in the coming year.

Another potential valuable element of the trails is the development of cycling hubs and trails. Fáilte Ireland is working with us on that project. We have also considered developing water-based trails, some of which are on river and some of which are related to surfing, which is a very popular niche product throughout the west coast of County Clare and which is going well. We have invested in the traditional driving routes this year with signage, good maps, driving routes and stopping-off points where people can stop and view the landscape and so forth.

Chairman

Now we will move to Dublin tourism.

Mr. Frank Magee

I refer to the questions of Deputy Mitchell on corporate governance. I am pleased to confirm that our corporate governance manual is regarded as a best practice model. We are involved in approximately 100 flights per year, 50% of which involve Ryanair and the remainder involving destinations to which Ryanair does not fly. I am being excessively cautious when I say there are not more than ten business class flights, but probably closer to five.

I refer to the comments on hotel sizes. The larger the hotel, the easier it is to manage delegates. Many people may not realise that Dublin has the largest campus of its type in Europe, namely, Citywest. There is in the region of 1,000 rooms as well as golfing, sports and meeting facilitates. It is a major selling point to have a venue of such a size. The issue of size was relevant when it seemed the Burlington Hotel would close, because it was important as a venue for conferences. However, the hotel has reopened and the odds are it will remain so for the coming four or five years. The opening of many hotels is planned to coincide with the opening of the convention centre and I believe, in spite of the downturn in the business, they will proceed because a good deal is taking place in that area. It is not a significant issue for us.

Deputy Olivia Mitchell

Citywest is not Dublin. I am aware people have come to conferences in Dublin and have been shipped from the airport, past the Red Cow roundabout to Citywest. Such people have returned home on Sunday night after the conference without feeling as if they had been to Dublin. That is an issue.

Mr. Frank Magee

Let us consider the cities where there are international conference centres, such as Paris and Chicago, in which is the McCormick Place centre. Many conference centres are located outside the city centre in such cases. We are spoilt because of the proximity of certain areas to Dublin. Let us consider access from Dún Laoghaire to the city centre by DART. We are spoilt and if we must travel for more than ten or 15 minutes we believe it is far. Dublin is an international capital city. We are confident in saying to delegates visiting Citywest that it is part of the Dublin area. The extension of the Luas line to Citywest will enhance access. We have a good range of accommodation.

I refer to Senator Kelly's points on the integration of the two agencies. I was vociferous on the matter of relationships when necessary. Thankfully since the re-establishment of the agency in 2007 and since we are regarded as an independent agency, it has been excellent and we receive great support from our sister agencies. We are allowed get on with our work. We have the opportunity to play in a league of competition with other cities, which is a totally different business. The pressures and requirements on us are different and we are given freedom in that regard.

Regarding the tourism information office, TIO, bookings, it is correct to say the numbers are not significant. However, some 1.6 million callers come to our offices each year. We find those people have carried out research on the web and have made initial bookings, perhaps for the first night's stay. They visit the TIO for reaffirmation of their plans.

I refer to the issue of smaller accommodation providers, which is a question of availability. We wrote to all accommodation providers in the recent weeks offering the facility of a direct link to their reservation system to improve availability. However, small units are less inclined to provide availability. The committee will be aware that it is a good deal easier to find ten rooms in a 100 bedroom unit, rather than to secure two rooms from a house with only five rooms. Small operators want to retain control and wish to know with whom they are dealing, which is an issue.

We provide information in the TIO and on the website on a 32 county basis, it is not purely for Dublin. We say to our sister organisations that 1.6 million people come to our offices seeking things to see and do in Ireland, not only Dublin. Companies such as Rail Tours bring people out of the region. Recently, there have been specific promotions for the north west and the south east. We will meet with Fáilte Ireland this week to examine how to further enhance the all Ireland nature of the tourist office on Suffolk Street. Given the number of visitors there, it is silly that other regions do not make better use of it to attract people.

Senator Alan Kelly

Will Mr. Magee address the matter of competitiveness?

Mr. Frank Magee

The changes taking place at present will sort out competitiveness. On my way to work this morning I saw a sign in the city centre advertising hotel rooms for €50. There was a competitiveness issue which was driven by the domestic market to a great extent and by domestic perceptions, to be fair to the trade. However, the downturn in the economy will deal with the competitiveness issue. The prices are changing in that regard. We travel extensively to other cities and see what is being charged. Yesterday, I returned from a meeting in Paris and I can state that Dublin is a good deal cheaper. Paris is part of our competitive set and we also compete with Amsterdam and Vienna. It is difficult to work in a capital city given the minimum wages, the rates, the insurance costs and the costs of doing business in a capital city. We have tried to use the Dublin pass as a mechanism of getting across the good value message and it has been very effective. The concerns I held regarding competitiveness six months ago are no longer there, because of the need to hustle for business. Everyone is feeling the effects. On the way to the committee, one week before Christmas, I saw signs in the retail trade advertising sales of 40% and 50% off. That will sort out the competitiveness issue.

The total spend on consultancy by Dublin Tourism last year was €70,000.

Deputy Timmy Dooley

I welcome and congratulate both groups for their presentations. With the Chairman's indulgence, I will be somewhat parochial. I come from County Clare, the heart of the mid-west, and I direct most of my comments towards the delegation from the mid-west. However, the public sector and the public service generally is much maligned from time to time. The quality and calibre of the people before the committee today speaks volumes for those who work in the public service and the work they do on behalf of the people on an ongoing basis. That should be recognised. I have one question for both groups. As they know, there is a heated debate at the moment about Ryanair's desire to acquire Aer Lingus in its entirety. Cleary, that would have a potential impact on tourism. I would like to get the groups' views of such a takeover and how it might impact on tourism generally.

In his presentation, Mr. Cunnane talked about the continuation of investment in marketing, which is welcome. In light of the economic downturn and the changes that are taking place almost daily, have both groups set about reviewing their approach to advertising and marketing? Competitiveness was addressed by someone else but clearly there are advantages and I hope it will make Ireland a little more competitive.

I would like both groups to talk to us about funding product development. There is a cost element to developing tourism product but do the groups have any particular views on that? Are there any opportunities through public private partnerships? The Government is clearly not in a position, as it might have been previously, to invest in product development. The EU had a good scheme, although I disagreed with it somewhat because it tended to be spread too thinly across a lot of smaller projects. I am not sure if any economic analysis has been done of the benefits of that €50 million. I know we got good value for money in Clare, given what was done at the Cliffs of Moher, but I am not sure that the same could be said of the way in which the money was dissipated across too many products.

As regards connectivity in the mid-west, and particularly the Aer Lingus decision, do the groups agree that the time has now come for Aer Lingus to make a commitment to return to the Shannon-Heathrow route, considering that the workers have made significant sacrifices to cut the cost base? I recognise the efforts of Shannon Development in playing an important lobbying role.

Broadband has been identified as an important factor. There is a requirement for an ongoing liaison with various broadband suppliers to identify gaps in the market that must be filled.

Deputy Michael Kennedy

I welcome both groups to the committee. As time is moving on, I will be parochial as well and leave Shannon alone. We will not get into the Aer Lingus decision to pull out of Shannon airport, or the Ryanair-Aer Lingus takeover scenario. We will have Mr. O'Leary and his Aer Lingus counterpart in tomorrow morning at the Joint Committee on Transport, which will be interesting.

As regards Dublin Tourism's promotions, I recognise that the organisation has a good hit rate with the number of visitors coming to Ireland. It is up to 4.5 million, which is a significant figure. How does that compare to Belfast? I read somewhere that Belfast gets 7 million visitors, although I may be wrong. If the delegation has an answer, I would like to hear it.

An issue that bugs me is how we do not package events properly, particularly in Dublin, given that it is the capital city. I would instance the Irish Open golf tournament. Fortunately, the Minister, Deputy Cullen, got a sponsor for that event which will presumably take place in the Dublin area. Our colleagues in Kilkenny do not seem to be able to host it — thank God, from Dublin's perspective. Pádraig Harrington, who is the British Open champion and also won the USPGA title, is playing in that tournament. As a superstar who has also been awarded the professional golf players' award, why are we not capitalising on him next May? Should we not build a dinner event around him? We should also invite all the golf clubs, hotels, restaurants and airlines to put a tourism package together. At a recent meeting, Fáilte Ireland told us that 50% of Dublin's hotel beds are unoccupied at any one time. There is a massive potential to put a package together comprising cheap bed and breakfast deals, a relatively cheap airline ticket, a few rounds of golf, plus a restaurant meal in the evening. That is the way we can win. The year 2009 will be difficult with the economic downturn. The euro is worth 92p sterling today and is also strong against the US dollar. We need organisations like Dublin Tourism and Shannon Development to build a package around events like the Irish Open golf tournament, rather than letting individual concert promoters look after themselves. There is a massive potential in this regard. There is a real challenge for the country and individual groups in Dublin, Shannon and elsewhere to put such tourism packages together. We should be able to capitalise on Pádraig Harrington. He will be over for the week, playing in that tournament. There will presumably be a pro-am event in advance of the four-day Irish Open. Why can we not nab him on the Wednesday night in CityWest, thus attracting 6,000 or 7,000 people to avail of a week-long golfing package? We could give them good value in so doing and I would like to hear Dublin Tourism's comments on that.

I always feel that Malahide Castle is under-utilised. There may be figures that I am not aware of, but I recall my days on Fingal County Council and I never felt that Malahide Castle, which is a lovely venue with beautiful parkland, was ever properly promoted. It was not promoted by Fingal because it did not have the franchise. I am not sure that Dublin Tourism really promotes that venue or others such as Newbridge Park in Donabate or Ardgillan Castle. There are fantastic facilities there, including trail walks and the coastline. We should be doing more to promote those venues. I thank the delegations for their presentation and I would like to hear their comments.

Deputy Pat Breen

I welcome the representative from Shannon Development, which has been very open with all Oireachtas Members in County Clare, letting us know what is happening, as well as through its annual briefing in Dublin. It is important its representatives attend our committee also.

As regards Shannon Development's role in marketing tourism, have there been cutbacks in its funding for 2009? If so, what effect will this have on its abilities to promote the Shannon region? What strategy is Shannon Development putting in place, given that the figures for Shannonside tourism are back up this year, particularly on American routes and the London route also?

What plans does Shannon Development have in place for its 2009 strategy? What effect has the loss of the Shannon-Heathrow route had on tourism? We had a readymade market of 360,000 people who will not now be coming into the region.

In addition, has Shannon Development heard anything about the imminent return of Aer Lingus on the Shannon-Heathrow route? We are told that this might happen in the near future and that Santa Claus might bring some gifts back to the region.

On the loss of the American market this year, Delta is pulling out of its service to Atlanta which was an excellent hub both ways, both for American tourists coming into Ireland and for business and Irish people travelling; and Open Skies is in place. We have been told by many Ministers that airlines were almost queuing up to get here. Is it true that American Airlines is getting its act in order, that it will see Ireland as just a small country in Europe and that it will want to serve one destination only, which will be probably the capital city, all year round? The fact that we have Delta on the New York route, and Continental, is important. I would like to hear Mr. Cunnane's views on that.

Chairman

I ask our guests to respond. If they do not mind, I have a deputation to meet and the Vice Chairman, Deputy Kennedy, will take over in the chair. I thank them for being so frank in their responses. I wish them all a very happy Christmas.

Dr. Vincent Cunnane

I thank the Chairman, likewise.

Deputy Michael Kennedy took the Chair.

Dr. Vincent Cunnane

In answer to Deputy Dooley, we work closely with Ryanair and Aer Lingus. Both provide connectivity into Shannon Airport, with Aer Lingus currently on long haul and assisted by others such as Delta, Continental and US Airways, and Ryanair providing the European hub. We welcome all carriers. Connectivity remains the biggest issue facing us. A successful Shannon Airport will mean a successful region and more business and tourist travellers through there. That will allow us to do our job to ensure that those visitors come in and business is retained.

There is no doubt connectivity is important to business, both from an American point of view and from a Heathrow point of view in particular. The loss of Heathrow remains a current issue. It is not something that happened a year and a half ago, the effects of which are over. Ryanair brought in extra flights to London and the flight to Charles De Gaulle Airport with CityJet has proved extremely beneficial. However, if the Heathrow flight was to return in the morning, we all would be extremely happy.

Deputy Pat Breen

Does Mr. Cunnane know more than we know?

Dr. Vincent Cunnane

We also work increasingly and closely with Shannon Airport Authority. I would like to be in a position to put something on the record. I still believe in Santa Claus and I hope for the return of the Heathrow flight. We see the short haul to Europe, and particularly Heathrow, as a key attractor for business purposes as well as high-end tourism from London. It is a significant aspect.

In terms of broadband, we want to see a next generation network, particularly around Shannon. This is of considerable importance as well. We must build on what has happened with our MANs. As I stated earlier, the need for backhaul facilities to Dublin remains a key aspect.

Deputy Timmy Dooley

Eircom has a lethargic approach to rolling out and upgrading its various exchanges. Is there any opportunity for some kind of co-operation between Shannon Development and Eircom? Particularly in the villages, there seems to be considerable inertia. Unfortunately, Eircom only seems to react — I have had this out with the company — when some of the wireless operators come into a region and then they automatically roll it out, which really is not helpful.

Dr. Vincent Cunnane

I would rate the provision of open access multiple user broadband alongside the airport as vitally important to us. We are in the business of attracting knowledge-age companies into the region. No more than physical infrastructure such as the roads, namely the N7, the N69 and the N18, which are of significant importance to Shannon Development, the provision of high-speed open-access broadband is vitally important. If, at the end of the day, a great deal of fibre goes into the ground and we are still limited to Eircom activity, then there will not be competition and the price will remain high. It is vitally important that a number of services are provided and that we can utilise the extensive build already in place.

I will ask my marketing colleague to assist me. Direct marketing is a key aspect on which we have been building, working more directly with the airlines and the operators to bring targeted communities into the region and then utilising the likes of our trails and other activities. We have been reviewing that and the policy would have changed over the past two years to get involved in much more direct marketing. Mr. Pat Daly will outline some of this.

Mr. Pat Daly

Little advertising takes place in the international market because it is not that cost effective for us. We dovetail with our colleagues in Tourism Ireland/Fáilte Ireland on that and tailgate their campaigns. We follow up with targeted market deals, partnerships and co-operation with key tour operators, travel consortiums and travel agents which can package and bringing business into the region. That is how we do it internationally.

We conduct advertising and promotion, particularly in the Irish market, but they would be cost-effective and many of them would be driven at the regional level. Our model is much more direct and tactical than heretofore. That has been generating much response. As Mr. Cunnane mentioned, this year alone we signed off in the region of 32 international marketing deals and that has generated significant business in the form of 230,000 plus holidays sold internationally and about 436,000 bed nights, and that will generate a €43 million return. That is very significant and we can stand over it. Our intention next year we will continue that model, and even bring a bit of that to bear on the domestic market where we can drive traffic through deal flow. We are conscious in constrained times of how we use and get value for money. We are determined to get value out of our deals and to bring business and beds into the region.

Mr. Frank Magee

On Ryanair and Aer Lingus, Mr. Michael O'Leary states competition is good. However, the point he makes about protecting the Heathrow slots is a critical one and we really need to watch to ensure that those slots are protected in the future. It is about connectivity, even with Dublin. It is about of connectivity with the rest of the worlds.

On our marketing spend, 25% of our marketing spend next year will be on e-marketing, which is the way forward. We have proven ourselves to be the leaders in Europe on it. We will grow that even further. It is about getting to the consumer as effectively as possible.

On product development, Deputy Tourism is fairly unique in that it operates attractions such as Malahide Castle without a cent in subvention. We do not get a cent to operate, to open the doors or to pay the electricity. All of that is done from our own resources, from commercial revenue. I am not aware of any other attraction in this city or in any European city that can operate on the basis on which we operate to the level that we do.

Under the last two rounds of the national development plan Dublin was excluded from grant aid. This year, we are now eligible for support. In fact, we have a massive programme, in conjunction with Fingal County Council, for the development of Malahide Castle to make it an iconic project for the island. We are fairly hopeful that the programme will be supported.

With regard to the Vice Chairman's comments in respect of Belfast, it all depends on who is counting and what they are counting.

Deputy Pat Breen

We count.

Mr. Frank Magee

As people committed to tourism, we count the money in the till. In reality, there are approximately 20,000 hotel bedrooms in Dublin, whereas in Belfast there are only 2,000. Even operating at 100% capacity, Belfast could not touch Dublin in the context of visitor numbers. People may commute into Belfast each day and be counted as visitors. From a tourism viewpoint, the number of hotel bedrooms in Belfast is only 10% of the number in Dublin. They are nowhere near us.

Vice Chairman (Deputy Michael Kennedy)

If the figure of 7 million is correct, given that Dublin is a more attractive city, it should be way ahead.

Mr. Frank Magee

The figure of 7 million may include day visitors, business travellers, and so on. We do not count such people because there is no point in doing so. What really is important is the number of overnight stays. The capacity of Dublin in this area is ten times that of Belfast. The rate of room occupancy in Dublin during the year is 74%. This means that 26% of hotel beds are vacant at any one time. When rugby internationals or All-Ireland finals take place, there is only a finite number of rooms available. A figure of 76% would be a good performance by international standards. In this context, however, we must also take into account the huge increase in capacity. The number of rooms in Dublin rose by approximately 15% last year. The average annual rate of increase as regards hotel stock in Dublin has been 10%. That is phenomenal by any standard. Had the economic downturn not arrived, that level of growth might have continued. In light of what is happening in Dublin, it is hoped that it will continue.

I share the views expressed in respect of Padraig Harrington. Dublin Tourism is the only agency which, in the aftermath of the Ryder Cup, has continued to use Mr. Harrington as a magnet. Ours in the only agency with which he works in promoting Dublin as a destination by means of sending out messages of welcome and good will. As the agency for Dublin, our difficulty lies in obtaining access to tickets. If we are to promote events, it comes down to obtaining tickets for them. If we consider the position in respect of a venue such as the O2, formerly the Point Depot, record companies control the sale and distribution of tickets. The acts which appear at the O2 usually come as part of a world tour and the record companies want people to attend such concerts in their own countries rather than as tourists elsewhere. We face a constant battle to obtain tickets.

Fáilte Ireland has partial control in respect of tickets for the Irish Open. From working with Fáilte Ireland, we are aware that it is focused on attracting international media attention. I am of the view that it is important to piggyback on the success of the Irish Open. We should not cease promotion after the event but should instead continue with our efforts in this regard to sustain interest.

Vice Chairman

Agencies represented here should be the promoters. I accept that if Aiken Promotions is running the show in respect of a particular concert, our guests will only receive a certain number of tickets. However, if the agencies became involved in promotion, they could identify an artist or event they could promote, on a collective basis, within the industry. Good progress might be made if this were to happen.

Mr. Frank Magee

The Vice Chairman is correct in that regard. Events are a huge factor in driving short break business. However, Dublin Tourism does not have a budget in respect of promotional activities such as those to which the Vice Chairman refers.

The Vice Chairman mentioned Malahide Castle, which we do not promote within the city or county of Dublin. Our efforts in this regard are aimed at promoting the castle internationally. Our focus is on attracting foreign earning revenues to the city. Every item of literature we produce refers in some way to Malahide Castle. Door receipts indicate that there were some 125,000 day visitors to the castle last year. It must be remembered that we are in competition with national cultural institutions such as the National Museum or National Library, which people may visit free of charge. Such institutions are 100% funded. However, we are obliged to pay the wages of those who work at Malahide Castle and must, therefore, impose a charge on the people who visit it. If we obtain the funding from Fingal County Council for which we have applied in respect of developing the castle, there will be a major increase in the level of business there.

Deputy Pat Breen

Do representatives of Shannon Development and Dublin Tourism meet on a regular basis? Ireland is a small country. When people conclude their visits to Dublin, does Dublin Tourism promote the mid-west as a further destination to them? Likewise, does Shannon Development promote Dublin in this way?

Mr. Frank Magee

Some 30% of our bookings relate to destinations outside Dublin. However, I will not state that all of these relate to the Shannon region. In light of the Donegal bias at Shannon Development, we work closely with it in this regard.

Deputy Timmy Dooley

It is similar to the position in respect of eel fishermen.

Mr. Frank Magee

It makes sense for us to do so. We carry out approximately 100 overseas promotions each year. We would never dream of promoting holidays in Dublin without including trips to the Boyne Valley and Glendalough. People who visit Dublin obtain a flavour of the entire country and then visit other destinations when they return to Ireland.

Deputy Pat Breen

Would it be possible for Dublin Tourism to promote other destinations outside Dublin when it is next overseas?

Mr. Frank Magee

Yes.

Deputy Timmy Dooley

We will then send a little tourism Dublin's way.

Chairman

Perhaps 30% of those who fly into Shannon could be sent on to Dublin.

Dr. Vincent Cunnane

I will ask Mr. King to reply to Deputy Dooley's questions on product development and those of Deputy Breen in respect of connectivity.

Mr. John King

Well more than 30% of those who fly into Shannon proceed to Dublin. We are already well down the road in the context of sharing business. Mr. Magee referred to promoting the Irish Open, which is an extremely successful event and which has taken place at Adare Manor for the past two years. We engaged in a high level of promotion with regard to it during that period. We are disappointed because we thought the event would remain at Adare Manor for three years. However, it appears this will not be the case. I am not sure where it will be staged next year. If there was any possibility that it might remain at Adare Manor, we would be delighted.

Chairman

If Shannon Development provided me with a good package, I would certainly visit the event.

Mr. John King

We could certainly investigate the possibilities in that regard.

Deputy Breen referred to the challenges faced by the mid-west region in the context of the open skies policy and connectivity with Heathrow Airport and inquired about our plans for 2009. We have worked hard to try to minimise any cuts in the areas of marketing and product development and we do not anticipate such cuts being made. If we are obliged to make savings, we will be obliged to find them in other areas throughout the organisation. In 2009 we are determined to continue to tackle the significant challenges facing us.

Deputy Dooley inquired about product development. We invest funds and then we look to the mid-Shannon tax scheme for assistance. We also try to access the various programmes available under the national development plan for tourism.

Chairman

I thank our guests for attending and wish them beannachtaí na Nollag agus na h-Athbliana. I thank members for their contributions and support during the past year. I also thank the staff and the clerk to the committee for their assistance. I wish everyone a very happy Christmas and a prosperous new year.

The joint committee adjourned at 4.20 p.m. sine die.