Joint Committee on Tourism, Culture, Arts, Sport and Media debate -
Wednesday, 7 Dec 2022

Rising Cost of Tourist Accommodation: Discussion (Resumed)

Chairman

This meeting has been convened to facilitate a round-table discussion on the rising cost of tourist accommodation. On behalf of the committee, I warmly welcome: Mr. Eoghan O'Mara Walsh, CEO, and Elaina Fitzgerald Kane, chair, from the Irish Tourism Industry Confederation, ITIC; Ms Denyse Campbell, president, and Mr. Tim Fenn, CEO, from the Irish Hotels Federation, IHF; Mr. Paul Kelly, CEO, and Ms Jenny De Saulles, director of sectoral development, from Fáilte Ireland; and Mr. Cian Ó Lionáin, assistant secretary with responsibility for tourism, and Mr. Bernard O'Shea, principal officer with responsibility for tourism policy, from the tourism unit of the Department of Tourism, Culture, Arts, Sport, Gaeltacht and Media.

The format of the meeting will be that I will invite witnesses to deliver their opening statements, which are limited to three minutes each. That will be followed by questions from members. The witnesses are probably aware that the committee may publish their opening statements on its web page.

Before I invite our witnesses to deliver their opening statements, I wish to explain some limitations regarding parliamentary privilege and the practice of the Houses as regards references witnesses may make to other persons in their evidence. The evidence of witnesses physically present or of those who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way to make him, her, or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of that person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise, or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of Leinster House to participate in public meetings. I cannot permit a member to attend where they are not adhering to that constitutional requirement. I to ask members, when contributing via MS Teams, to please identify themselves when contributing for the benefit of the Debates Office staff preparing the Official Report and to mute their microphones when they are not contributing in to reduce background noise and feedback. I remind all those joining us today to ensure that their mobile phones are on silent mode or aeroplane mode or, better again, switched off.

I propose to call the speakers to make their opening statements in the following order: first, Mr. O’Mara Walsh, on behalf of ITIC; second, Ms Campbell from the IHF; third, Mr. Kelly from Fáilte Ireland; and, fourth, Mr. Ó Lionáin from the Department.

Mr. Eoghan O'Mara Walsh

I thank the committee for the invitation to speak today on this important issue, the rising cost of tourist accommodation in Ireland. ITIC is the main representative body for all tourism and hospitality stakeholders in the country. As committee members know tourism and hospitality is the country’s largest indigenous industry and biggest regional employer. There are 20,000 businesses in the sector, the vast majority of which are small and medium enterprises, SMEs. The latest Central Statistics Office, CSO, figures show that 246,500 people work in the industry. Some 70% of the jobs are in the regions.

Since Covid restrictions were lifted earlier this year, the tourism industry has rebounded strongly. However, there is widespread concern about the year ahead as energy costs, softening demand, and global economic challenges all point to a difficult period. ITIC estimates that there will be a fall in tourism performance next year compared with this year, so the recovery will stall. The situation is further complicated by the Government's over-reliance on tourism accommodation bed stock to house Ukrainian refugees and asylum seekers. Some 24% of all tourism beds nationally are contracted to the Government at this point, and that figure rises to 28% if we exclude Dublin. If this situation continues to obtain or worsens, there will be few tourism beds in tourism towns up and down the country next year and thus little tourism activity, meaning inevitable job losses and business closures. Tourism operators are prepared to play their part, but they cannot be asked to be the primary accommodation provider to the detriment of a broad industry.

I am here today to talk about the cost of tourism accommodation. The room rate of Irish hotels is published by STR, an independent global benchmarking firm. Such data is important as it unambiguously outlines what the consumer pays on average and how it compares with previous times and other countries. For example, the average price of a room in Ireland in September was €179, an increase of 25% on the same month pre pandemic. For Dublin, it was €202, a 22% increase on September 2019. The rate of increase since 2019 is significant and is driven by two main factors, namely, the cost of business and an acute supply shortage. In terms of rising input costs, EUROSTAT figures prove that Ireland is an expensive business environment with labour costs 32% and electricity costs 60% above the EU average, and Ireland having the second highest excise tax and second highest borrowing costs across the EU. It is self-evident that this drives up prices. In terms of an acute supply shortage, this was the case even before the Government took thousands of bedrooms out of the tourism economy and demand and supply is only set to be further challenged next year, putting more pressure on prices.

When it comes to costs, it is important to mention the impending VAT increase. ITIC’s view is that the 9% rate is the correct VAT rate for the tourism sector and puts us on an even keel with our European competitors. To increase the VAT rate would make us one of the most expensive tourism destinations across the EU, would damage our competitiveness and would add further cost to the system at the very time that industry is dealing with escalating costs elsewhere.

The economist Jim Power recently completed a report into the economic rationale for the 9% VAT rate and we will send committee members a copy of this shortly. In the report it is estimated that the increase in VAT will add 4.1% inflation to accommodation and food services and will cost 24,000 jobs. Despite cost increases, Irish tourism is very mindful of maintaining its value proposition and this is critical if industry is to weather the current storm and chart a path to full recovery. I thank members for their time. I am happy to answer any questions that committee members might have.

Chairman

I thank Mr. O'Mara Walsh. I now invite Ms Campbell to make her opening statement on behalf of the Irish Hotels Federation.

Ms Denyse Campbell

The IHF welcomes this opportunity to address the committee about the cost of tourist accommodation. We have provided a detailed submission and opening statement and I would like to add some further comments in the time available.

I would like to first address the issue of significant price increases on certain nights when occupancy levels in Dublin, for example, are very high. This happens when Dublin is very busy, including when hotels are essentially sold out for a given night. This is a challenge experienced by many European cities.

To clarify, we are not here to defend the pricing decisions of individual hotels or to send a message to the market regarding pricing. As a representative body, we are legally constrained from doing so under competition law because pricing is a matter for individual businesses.

When discussing price, we need to look at the full picture. Increases reported on certain nights are in no way reflective of the true overall value on offer to Irish consumers and overseas visitors. On a busy night, when the last remaining 500 to 800 rooms in Dublin may be priced at higher rates, the other 22,000 hotel rooms have been bought in advance at lower rates. Typically, these accommodate up to 45,000 guests. Similarly, 63,000 hotel rooms are available nationally on any given night. These can accommodate more than 120,000 guests. It would not be fair to think that the 500 to 800 rooms in question are representative either of Dublin or the country as a whole.

Looking at average room rates for the year up to September, the rate for rooms in Dublin has increased by 18% since September 2019. That was over a three-year period. This year alone, inflation is running at more than 9%. How does the 18% increase in the rate for rooms in Dublin over three years compare with the position in other European cities? It compares very well. Budapest was up 38%, Athens was up 35%, Paris was up 34%, Rome was up 29%, Milan was up 21% and Edinburgh was up 21%. At 18%, Dublin was around the same level as Lisbon and London, where the increase was 16%. This was on the back of eye-watering increases in our operating costs.

Part of the reason Dublin performed so well as regards occupancy is because visitors recognise that we offer good value for a very high-quality product by international standards. We are also highly rated toward the four- and five-star, high-spending market. That is a fact. These high-spending visitors make an enormous, positive contribution to our economy. While we accept that there are issues as a result of to capacity challenges and spikes in demand, from a reputational point of view, we should not promote the idea that price spikes on some nights are reflective of the value available because this is factually not the case. An independent, verifiable, industry analysis is available to demonstrate this. We look forward to discussing this matter with the committee, in addition to the economic challenges facing our industry over the next 12 months.

Mr. Paul Kelly

I thank the committee for the invitation to attend. When Fáilte Ireland last appeared before the committee in June to discuss this matter, I informed members that our remit in this area is to ensure that accommodation quality standards meet visitor needs and that commercial decisions on pricing are the responsibility of individual business owners. These pricing decisions are driven by a combination of factors, including the costs that need to be recovered and the competitive price the market will bear based on the balance between supply and demand. Since June, unfortunately, the position in respect of both these factors has deteriorated. As was highlighted, input costs have increased at an unprecedented rate and the amount of tourism accommodation being used for humanitarian needs by the Government is also at an unprecedented level. Both these factors mean we are likely to see significant increases in tourism accommodation prices continuing into 2023.

I will speak to the accommodation supply issue. When I appeared before the committee in April, I expressed our view that housing displaced Ukrainian citizens and asylum seekers in short-term tourist accommodation is not a good solution for them or for tourism. Tourism is a complex symbiotic ecosystem where lots of different types of businesses rely on each other. When accommodation stock is taken out of the market, it brings with it a multiplicity of challenges, and not just the rising cost of accommodation. For every euro visitors spend on accommodation, they will spend €2.50 in other parts of local economies, such as local cafés, shops, galleries, restaurants, visitor attractions and activity providers. When accommodation is removed from a locality, the survival of many of these other businesses in that locality is put at significant risk. Fáilte Ireland and many other public and private sector stakeholders have worked hard to create an attractive tourism product throughout the country to provide employment and build better places to visit and live in. The removal of hotel stock from these areas threatens to undo much of that work.

Moving on to the pricing issue, we are seeing an increase in the frequency and scale of price spikes in the accommodation sector, often coinciding with concerts and sporting events. These price spikes lead to both reputational damage of the sector within Ireland and damage to Ireland’s reputation globally for offering value for money. In this context, and in the context of the new short-term letting legislation, I will write to all registered providers of accommodation to inform them that Fáilte Ireland will have a renewed focus on compliance with their submitted scale of charges in 2023. In this letter, I will ask every individual business to consider the wider implications of its price-setting models and remind them that we know from bitter experience that if Ireland's reputation as a good-value destination is damaged it will take many years to recover. While a reduction in the available supply creates the condition for price rises, prices only rise because individual businesses make the decision to put their prices up. All businesses need to be cognisant of the long-term impact of excessive pricing.

I reiterate that in the context of the long-term well-being of our tourism economy, and the communities that rely on it, we desperately require that as much of the tourism accommodation stock as possible be returned to tourism use for the 2023 season.

Mr. Cian Ó Lionáin

I am delighted to be back to discuss this important issue. Since my last appearance before the committee in June, Ireland has had a very busy summer season, certainly busier than was predicted at the time. However, the challenges we outlined five months ago are still with us and will be for some time. International travel rebounded more quickly than expected in 2022. Tourism Ireland estimates that overseas tourism to Ireland in 2022 is tracking towards 75% of 2019 levels. This represents a fairly remarkable recovery of inbound tourism since travel restrictions were lifted earlier this year.

While tourism in Ireland continues to recover steadily, supported by sustained Government supports, several key challenges remain. The combination of increasing interest rates in all major economies, rising energy and food prices, and the growing prospects of a global recession, as indicated by the World Bank and other commentators, represent major challenges for the recovery of international tourism through the remainder of this year and 2023. Hotel capacity and labour shortages, two topics that we particularly focused on in June, will continue to challenge the tourism industry in Ireland in 2023.

Notwithstanding these supply side issues, Ireland must continue to promote itself to a global audience to maintain its place in a very competitive marketplace. In budget 2023, the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, secured additional funding of €15 million for overseas marketing of Ireland. The overseas marketplace is very competitive and it is vital that Ireland maintains its profile and reputation as a destination that offers value for money due to the excellence of product and the warmth of the Irish welcome. Notwithstanding these current challenges, the sector must continue to maintain a strong focus on its long-term competitiveness. This is affected by a number of factors, such as energy prices and recruitment, retention and availability of staff, but it is also affected by the choices made by every operator within the sector.

We are aware of the difficulties energy prices have presented for the industry. The Government’s temporary business energy support scheme, TBESS, will be a vital support to tourism businesses in this regard. The Department recognises the growing concern among those in the wider tourism industry about the potential impact on tourism’s longer term recovery and prospects if a large amount of tourism bed stock continues to be taken out of the system for humanitarian reasons. While the use of tourism accommodation to meet humanitarian needs has been absolutely necessary in the short term - and it is important to state that the sector has stepped up to meet these needs - we are in discussions with colleagues across Government with a view to finding more appropriate long-term solutions. The wider tourism ecosystem consists of a wide range of actors, such as local restaurants, bars, cafés, retail, art galleries, visitor attractions and activity providers. They all rely on visitors having a place to stay. ITIC has prepared a report on these issues and concerns. The Department is examining that report and has shared it with our colleagues on the humanitarian senior officials group to ensure that the longer term impacts on tourism can be taken into account in planning as we go forward.

While the availability of accommodation is challenging for the industry, it is important to recognise that other challenges still remain, including recruitment and retention of staff. Mr. Kelly, Ms De Saulles and colleagues in Fáilte Ireland are doing excellent work in that area. In addition, this committee recently published its report Working Conditions and Skills Shortages in Ireland’s Tourism and Hospitality Sector. That report makes recommendations that pertain to the responsibilities and functions of a number of Departments and agencies. Any response to the report will require detailed consideration by the Department in consultation with those other Departments and agencies.

I will highlight to members that my Department has initiated the development of a new national tourism policy that will seek to mainstream sustainability across everything we do. The development of this new policy will involve extensive consultation with the tourism industry and our communities to help set out a path for the coming years, which will support sustainable recovery and development in the sector. The Minister very much welcomes engagement with the committee in this regard. This new tourism policy will seek to support sustainable tourism development in communities throughout the country, while protecting our environment and natural resources, and will equip the sector to meet the challenges of today and tomorrow.

I thank the Cathaoirleach for her attention.

Chairman

I thank Mr. Ó Lionáin very much. I am sure there will be lots of questions arising from that comprehensive presentation. I will now move to my colleagues. The rota has been circulated so they will know they have five minutes or thereabouts. I will allow a little bit of latitude.

Deputy Christopher O'Sullivan

I thank the witnesses for attending. This is obviously an incredibly important issue. Our own report quoted a figure suggesting that 67% of employment in the regional parts of Ireland is linked to tourism. I am based in west Cork so I can see how important it is.

We will go straight into the questions. The first is for the Irish Hotels Federation and the Irish Tourism Industry Confederation. It is on pricing. The committee has had a fairly robust discussion about pricing over the summer, especially with regard to Dublin. I would be slow to get into that debate again but will say that I totally appreciate that, compared with the average increase in Europe and the figures that were quoted, 80% compares well. However, the main point related to the extortionate prices being charged in connection with certain events that were on in Dublin at that time. That is what really stuck in people's throats. It may have been a small minority. From what we could see, it was certainly not in those family-run traditional hotels that this was happening. For the most part, it was in hotels owned by international consortiums and so on. That is what grabbed the headlines and tarnished the industry more than anything else. I will not go down that route again.

With regard to what we can do for hotels and all businesses associated with or involved in tourism, there are a lot of challenges facing tourism. The cost of energy is an obvious one but there is also the auto-enrolment pension payment that businesses are to face, the increase in the minimum wage and the VAT increases proposed for the new year. Of course, insurance is also still a very significant problem. Do the Irish Hotels Federation and the Irish Tourism Industry Confederation feel that the TBESS goes far enough? If not, what other supports should Government be looking at besides the obvious measures of keeping the VAT rate at 9% to assist the industry through this period?

Mr. Tim Fenn

I can pick up on that one. I thank the Deputy very much for highlighting some of the challenges we are facing. To refer specifically to the temporary business energy support scheme, it does not really cut it for hotels. Particularly challenging in the scheme is the exclusion of liquefied petroleum gas, LPG. If you are not on the grid and do not have access to a meter for your gas, you just do not qualify. That effects many businesses right across Ireland and it is a major challenge. We also see a challenge in respect of the narrow focus on the comparative figures year on year. Many people came out of contract over a year ago and have seen massive increases. While the August on August figures were eye-watering, they will not have the 50% increase required October on October. We ask that the Government look at extending the comparator period to reflect what happened in the market with regard to prices. Finally, businesses operating in group structures, as many do, can only claim for three separate meters or three separate sums of €10,000, which is very small relative to the high number of people employed in those particular instances.

Deputy Christopher O'Sullivan

I only have one minute left, although I appreciate that answer, which made clear what we need to do. I have one more question in the time I have left. It may be most suited to Mr. Kelly or the Department. Does Discover Ireland come under Fáilte Ireland's remit or the Department's? It is Fáilte Ireland. I have the right guy to ask the question of. Kerry has its own national advertisement campaign, "Discover Kerry", under the Discover Ireland brand. I am here next to Deputy Dillon. Mayo could quite rightly have a "Discover Mayo" advertisement all over the media. Cork does not have one. Cork is our biggest county and, as we all know, it is also the most beautiful.

Chairman

We will argue that one later.

Deputy Christopher O'Sullivan

Will other counties get the same crack of the whip that Kerry seems to get every time when it comes to promotion and Discover Ireland? I would love to see a "Discover Cork" advertisement featuring Cork tourist attractions.

Mr. Paul Kelly

There is a "Keep Discovering Cork" advertisement, just as there is one for Kerry. We have as much-----

Deputy Christopher O'Sullivan

We never see it.

Mr. Paul Kelly

We use them on various media, including digital media, so it may just be where the Deputy is seeing the ads. There is also a "Keep Discovering Mayo" ad. We have a significant amount of content for every part of the country and we use it. As we go forward in this year, we are going to be particularly agile around reviewing where there is capacity and where there is good value and putting our marketing support into those areas. We will be looking forward, eight to 12 weeks out, to areas that will need support and analysing those.

Deputy Christopher O'Sullivan

There is great value in west Cork, in Kinsale, Clonakilty, Skibbereen, Bantry and the Beara Peninsula. Mr. Kelly should put his focus on that. I thank him and appreciate his answer.

Chairman

Ms Fitzgerald Kane wanted to speak in response to something the Deputy raised.

Ms Elaina Fitzgerald Kane

I thank the Deputy. He covered a lot of ground but forget to mention "Discover Limerick". On a serious note, to address the point he made about excessive pricing on the last few rooms, we have to take stock of the big picture which includes 20,000 businesses, 835 hotels and 63,000 hotel bedrooms. The price of the last ten or 20 rooms grabs the headlines and tells the story. I was talking to one of my colleagues who sold rooms for tours. They held over pricing from 2020 because they were struggling to rebuild that overseas market. They were selling dinner and bed and breakfast packages for €48. It is very difficult to make money on that. The average is one thing but people do not even talk about what happens before that. There is no hiding from excessive pricing but we have to be really mindful of how much capacity there is. We do not want a narrative based on what is grabbing the headlines because, as the Deputy very correctly said, that does not reflect most of the industry.

Deputy Christopher O'Sullivan

We do not hear the stories of good value. Ms Fitzgerald Kane is absolutely right. They do not grab the headlines and we do not hear talk about them. We do hear about the price hikes and so on. When the Irish Hotels Federation, IHF, came to visit us in Buswells Hotel recently, the Cork contingent in particular did the industry proud and told a really good story. Those involved were very positive and very grateful for supports. They really represented the industry well when they came to ask for a bit more support. Hats off to the Cork contingent.

Ms Elaina Fitzgerald Kane

The Deputy mentioned supports. The TBESS is very well designed but, as Mr. Fenn alluded to, it does not take into consideration bottled gas. We also spoke to somebody yesterday who has a substantial business. The contribution they received was €6,000 but their energy hike in the same period was €120,000. It just shows how things can map out with the qualifying criteria. There is definitely an opportunity to revisit that and to collaborate on it. Obviously, the energy crisis is not going away. The current deadline is also the deadline for the VAT rate. There is particular anxiety building around that as well.

Deputy Alan Dillon

I welcome the guests who are joining us today. I will continue on the same line as Deputy Christopher O'Sullivan and address the price spikes. I thank the witnesses for their opening remarks. Fáilte Ireland's opening statement referred to the reputational damage to the sector. Mr. Kelly has undertaken to write to each registered provider of tourism accommodation. This demonstrates that there has been an issue. I take Ms Fitzgerald Kane's point that there are also examples of good value but issues were highlighted in June 2022 as being of real concern. What confidence will the various organisations give to consumers who want to book a holiday in the summer of 2023 in Dublin, Cork, Kerry, Mayo and so on with regard to value for money?

Maybe I could gain an understanding from Mr. Kelly of Fáilte Ireland's remit. What are his considerations in writing to each provider, and what is the context?

Mr. Paul Kelly

I thank the Deputy for the question. We have had a strong increase in overseas recovery, which is great news. It is looking like it will be strong next year, if we are to listen to the feedback from the inbound tour operators. It is also looking strong based on the air access capacity slated to come into Dublin Airport and other airports next year. The accommodation coming out of the system because of humanitarian needs is pointing towards a scenario where we will likely have more nights than usual at almost full capacity in key urban areas. These are what we call compression nights, which are nights with occupancy above 95%. That is the context in which I am writing to the industry this week.

The proposals in the new short-term legislation, which was brought to the Cabinet this morning, see an increase in the fines that Fáilte Ireland can leverage when people are non-compliant with their scale of charges. What an individual business submits for its scale of charges is completely a matter for it. However, when it has submitted its scale of charges, Fáilte Ireland will be focusing more on ensuring compliance with it. It has to be said that there are very few cases of non-compliance with the scale of charges, because it entails a quite wide band. In the letter, I am taking the opportunity to remind people of the reputational damage of non-compliance during compression nights when the city is pretty full and where there are last available rooms. Ms Fitzgerald Kane, Mr. Fenn and Ms Campbell have referred to this. The reputational damage of the high pricing of the small number of rooms is not worth the extra revenue they generate. That is the context in which I am writing. The aim is to remind people not to squeeze the last few euros out of the last few rooms because of the damage it does to the wider reputation.

Deputy Alan Dillon

Do we have an indication as to the number of rooms taken out of the market because of the humanitarian response?

Mr. Paul Kelly

It is 24%.

Deputy Alan Dillon

How many rooms does that equate to?

Mr. Paul Kelly

Sixty thousand.

Deputy Alan Dillon

Do we know how many advance bookings have been made to date for the 2023 summer season? Would it be up to 60% or 70%?

Mr. Eoghan O'Mara Walsh

I do not have the data but I am aware that the lead-in time for bookings has shortened considerably. Traditionally, one would have got very many bookings from the US market in the first week or two of January, but that has changed. I do not know whether it is a Covid-related issue but the booking patterns have changed dramatically. Therefore, there is much less certainty about next year.

To go back to the point on what measures could be taken to keep price increases moderate, what Mr Kelly stated points to an approach, but the best way to moderate prices is competition. We will have a genuine problem next summer if the current number of beds, or indeed more, is contracted to the Government for humanitarian reasons. Demand and supply will be completely out of sync and approximately 30% of the bed stock will no longer be in the tourism economy. That will have a dramatically dangerous impact on the well-being of many downstream tourism businesses. In this regard, I believe Mr. Ó Lionáin mentioned the restaurants, bars, attractions, cultural events and culture companies. I mentioned this matter in my opening statement. In the Killarneys and Westports of this world, there will be no tourism activity if the bed stock is not available, and that will mean livelihoods lost next year. It is all interlinked. The best way to moderate price is competition. Much of the bed stock currently allocated to the Government needs to be brought back into the tourism economy. That is why we strongly urge the Government to come up with a much more balanced approach to housing refugees and asylum seekers.

When the crisis started, we all believed it would last for two to three months, but we now know it is a crisis of two to three years. We have estimated that if 30% of the bed stock is unavailable for tourism purposes next summer, it will cost the industry about €1 billion in lost earnings. If the crisis is to last for two to three years, one can imagine the really serious impact on industry – on the largest indigenous industry we have and the biggest regional employer.

Value is so important. Just before 2011, in the Celtic tiger times, we had lost our value proposition, and it took us an awfully long time to win it back. Therefore, value is important. The industry is very conscious of that. Thankfully, we have not been affected reputationally overseas so far, but there is a perception domestically that certain elements of the Irish tourism sector are not playing the value game. On the whole, however, we still represent value for money. I would have concerns about next summer because of escalating costs, VAT increases and such factors, but also because of the bed stock that will have been sucked out of the system. With all these, the knock-on effect on the wider tourism economy will be detrimental.

Mr. Tim Fenn

We also have to look in the round at what has been happening over time. Last summer, we were dealing with significant pent-up demand. We also had deferred business from 2020 and 2021, and there was a backlog of events compressed into June and July. This was a massive challenge because of the capacity we had in the system. We are now facing a completely different scenario because the economic outlook in our source markets is very challenging. The UK is going into recession. Prior to Covid, the UK generated 35% to 40% of our business. That means a massive challenge. The same applies to other countries in Europe. There is inflation right across the various economies because of the war. That is reducing consumer sentiment, which in itself will have a dampening effect on where we are going next year. It is very difficult to pinpoint where this is going to land. There are so many variables and not all of them are good. We are just trying to be as resilient as we can to ensure our business focuses on the long-term sustainable growth of the industry over time.

It is worth saying also that, during Covid, employment in the industry took a significant hit. We are making great progress on that. We are back to 90% of the number before the pandemic, although we still have a way to go to rebuild the skill base in the industry. Every one of these hits is a genuine challenge for us. In this regard, the cost of doing business has been mentioned. This is a time when we ask the Government to rethink its approach to adding another 50% to the VAT rate at the end of February. It will be just another hit on the industry.

Ms Elaina Fitzgerald Kane

Tourism Ireland monitors customer sentiment overseas. Ultimately, €7 billion of our €9 billion in tourism revenue in 2019 came from overseas. There has been no flagging of any reputational damage. Nobody wants to see it happening. The focus is probably more on the domestic aspect, but, again, nobody wants to see domestic reputational damage.

It is important to flag at this stage that the restoration of employment in the tourism sector after the pandemic has lagged behind that in other sectors. ITIC data suggest tourism recovery is not expected until 2006, which is a long time away. The current repurposing of much hotel and other tourism bed stock to meet the needs of Government contracts to address the humanitarian crisis will really stall the recovery we are hoping for in 2026. The biggest challenge we will have in this regard concerns talent and skills. We emerged very vulnerable as an employment prospect after Covid because we are always very close to the turn-off switch. The vulnerability definitely impedes us. I would be very worried about repurposing the accommodation and the impact it will have on our recovery.

ITIC has called for business continuity grants for businesses affected in these areas, be they gift shops, restaurants or bars. There is evidence of 100% take-up of hotel and tourism accommodation in some parts of the country.

The impact that is having on other local businesses that would traditionally have spun up is significant and it is time to address that.

Chairman

I thank Ms Fitzgerald Kane. We received apologies from Deputy Mythen, who cannot attend the meeting, but Deputy Munster is going to take his slot.

Deputy Imelda Munster

I previously raised the issue of the exorbitant prices that a substantial number of hotels were charging, predominantly in cities. Fáilte Ireland recently indicated it would write to businesses in the sector this week. As a representative body, what has the Irish Tourism Industry Confederation done about it? Given the risk of reputational damage as a confederation, I am sure it would want to be a representative organisation that offers consumers value for money. Particularly with a view to clawing back on some of that possible reputational damage for the businesses it represents, what steps has it taken?

Ms Elaina Fitzgerald Kane

The remit of the Irish Tourism Industry Confederation is broader than just hotels. It includes all tourism businesses, such as other forms of tourism accommodation, car rentals and so on. We are mindful, as part of the bulletins we issue regularly, of talking about value and building up the quality of the experiences we offer. The pandemic offered an opportunity for people to rethink fundamentally what they were doing. We have probably emerged better off in terms of the quality of the experiences and that has been helped substantially by reskilling opportunities. Nevertheless-----

Deputy Imelda Munster

I apologise but time is of the essence. Is that bulletin sent out quarterly?

Ms Elaina Fitzgerald Kane

We produce a monthly dashboard and it underlines value-----

Deputy Imelda Munster

Did the confederation at any stage think the situation was serious enough that it would write to individual businesses?

Ms Elaina Fitzgerald Kane

That was part of our monthly dashboard, which covers a lot and shows the lags we faced monthly and in the year to date. Tourism is still lagging, at 25% on an international comparison. The Irish Hotels Federation consulted its membership in light of the meeting we attended in June, so its representatives might want to take up from here.

Ms Denyse Campbell

Yes. After we met on 15 June, we informed all our members of the concerns expressed by the committee while also reiterating that the federation cannot, and does not seek to, co-ordinate or make suggestions or recommendations on hotel pricing.

Deputy Imelda Munster

I thank Ms Campbell. I return to the issue of price gouging when the occupancy exceeds 90%, whether that is at weekends during the summer or when there is a large event or concert. Someone said earlier that this happens when hotels are very busy and it involves the last remaining beds. When hotels are very busy, with occupancy at 90%, why would they engage in price gouging in respect of the last remaining beds when there is ample demand? It is crazy.

Mr. Tim Fenn

I might give a sense of how hotels are priced throughout the world-----

Deputy Imelda Munster

No, the issue is particular to Ireland. We have carried out comparisons with other European cities and they are not like for like. As the representative body of the organisation, why does the federation not take to task those hotels that engage in that price gouging when they have 90% occupancy and are very busy? They hold aside a handful of beds, whether that is 10% or 20%, a concert is announced or it is a bank holiday weekend during the summer, and they hike their prices to extortionate levels.

Mr. Tim Fenn

There have been some prices that people have been unhappy with, but we in the federation have no role in controlling pricing and we cannot comment on individual prices at individual properties. At the end of the day, hotels are full because they provide good value and people are happy to stay at them. The challenge concerns the last couple of rooms-----

Deputy Imelda Munster

My question related to price gouging on the last number of beds.

Mr. Tim Fenn

Some of the rooms that are priced at the last available rates are getting all the media attention-----

Deputy Imelda Munster

And rightly so.

Mr. Tim Fenn

-----and it is disappointing that that seems to cast the entire industry in the same light, but that is not the way it is.

Deputy Imelda Munster

That is why I was anxious to know what the federation is doing about it.

Chairman

I think Ms Fitzgerald Kane also wants to respond to the Deputy.

Ms Elaina Fitzgerald Kane

The Deputy mentioned 90% occupancy, but we do not have sight of how that occupancy is built up. It can start in the form of building a base at what is probably below-cost selling. It is unfortunate that, perhaps as part of that business model, this can happen, or it could be that contracts were in place that, because of inflation, no longer cover the cost base. I am not saying that is acceptable but rather that it might be part of the reason.

Deputy Imelda Munster

The witnesses gave us a graph indicating that 42% of hotels had seen a reduction in the number of domestic bookings for 2023, while for 29% there had been an increase and for 30% no change. First, the figures add up to 101%; I point that out for our witnesses’ records. The majority, at 59%, are not seeing a reduction. Is there a breakdown of that? Are they hotels near tourist destinations in rural areas or where are they? Our witnesses not have that information. Do they think the reason 42% are seeing a reduction relates to the news that is out there domestically, whereby it can be cheaper to book a three-day break or week away abroad? In fairness, while I hope that does not come to pass, our witnesses were warned about it. Do they think it is a result of damage having been done on the domestic front? People are willing to support hotels. An article in The Irish Times on 5 December suggested that the number of domestic trips last summer had surpassed the 2019 level, so people were willing to give them the chance, but then they are extremely put off, and rightly so, by the prices charged. Is that why there has been a slow uptake or a reduction in the number of people from the domestic market booking ahead for next year and perhaps that is because those people have chosen to go abroad?

Mr. Tim Fenn

Our view regarding next year is complex but booking patterns are occurring later than they did in the past, so the figures represent just a snapshot of the bookings at this point. Moreover-----

Deputy Imelda Munster

It was the federation that flagged the figures.

Mr. Tim Fenn

We cannot be immune to what is going to happen in the economy next year with inflation, the economic sentiment and problems relating to overseas visitors. Many people accrued savings over the pandemic and some of those savings are disappearing in family budgets------

Deputy Imelda Munster

We accept that. Does Mr. Fenn accept that some of the reduction may be due to the reputational damage that has been done? Does the federation accept that or is it oblivious to it?

Mr. Tim Fenn

We do not really have a view on that because we will see where it lands when next year comes through. The occupancy rates are high and working very well, which means hotels are providing good value for money for people who stay there.

Chairman

Is Deputy Munster okay with that? I have given as much latitude as possible, if that is all right.

Deputy Imelda Munster

I have just one final query, which is very short. The Irish Hotels Federation gave a regional breakdown of tourism jobs. I note that in Louth the jobs figure is 2,800 and revenue was €90 million. There seems to be a disparity between jobs versus revenue in comparison to other countries. Does anyone know or have an explanation for that? Perhaps the witnesses could look at that breakdown, which appears towards the bottom. It refers to 2,800 jobs, with revenue of €90 million. Above and below these figures there is a big disparity. What would be the reason for that?

Mr. Tim Fenn

We can take that away and have it further analysed for the Deputy. We will send in a submission.

Deputy Imelda Munster

Perfect. If Mr. Fenn could forward on the detail to me that would be much appreciated.

Senator Annie Hoey

I thank everyone for coming in. Will the witnesses clarify the figure where the Irish Hotels Federation estimated 60,000 beds being used for international protection? The Irish Hotels Federation said there are 63,488 bedrooms. Will the witnesses clarify the numbers for what they think-----

Mr. Paul Kelly

There are a few things there. First of all, it is very important to note the difference between bedrooms and bed spaces. There is more than one bed space per bedroom. The actual number at the moment is 42,000 bed spaces.

Chairman

Would that be three or four people in one room?

Mr. Paul Kelly

On average, I believe it is 2.5 spaces per bedroom. It is somewhere between 2 and 2.5 bed spaces per bedroom. At the moment that is the number. The 60,000 figure is a bed spaces number not a bedrooms number. It may be a forecast of where it might go, but my understanding is-----

Chairman

It is still phenomenal. I am sorry, I did not mean to interrupt but it is phenomenal.

Mr. Paul Kelly

It still is 24% of the accommodation.

Senator Annie Hoey

When I saw the number of 63,000, I thought it was 3,000 beds left. I just wanted to clarify that for myself to make sure I was on that.

There are really high figures here such as 92% for Dublin occupancy - and I would argue that this is a great figure, especially when we think of ten years ago which were different times - but my sense from what Mr. Kelly is saying is that the sector fears we are reaching a tipping point and that this is all going to go the other way. My sense from the submissions and from what people are saying is that there is a fear it is going to go the other way, whether it is through recession, costs or whatever, and that we are reaching a tipping point and will not be able to maintain those levels of occupancy or that high rate of occupancy.

I am sure there were lots of mixed views on the stay and spend scheme at the time, but do the witnesses believe there will come a point in the future when we will need to look again at something like that scheme for the tourism sector? I refer to it not just for occupancy purposes but also for trying to get the tourism piece within those communities, towns and villages. Is it something that is going to have to be looked at again to try to incentivise people stay and spend here? Did the industry believe the previous scheme worked? What would have to be different about that if we were to look at it again?

Mr. Paul Kelly

I will give a perspective on that. Our primary concerns as we look into next year are on the supply side rather than the demand side, because of the amount of stock that is coming out of the system. There are other challenges also such as the amount of car rental stock in the country, which will be significantly lower than in 2019. Our primary concern in the tourism sector is the supply side. Certainly, now is not the time for additional broad-scale incentives. When we look at how we will deploy our domestic marketing, it will be very agile, working it where there are opportunities to drive incremental revenue and incremental employment into areas based on where there is still availability and good value for domestic visitors. As to the merits of such a scheme at some future point, this would depend on the economic and the global economic scenario.

It is also worth the committee being aware of another aspect. Mr. Fenn spoke about the challenges in the UK market and the moderate place the European market is at the moment. It is important that we also look at the US market. Given the combination of the rate of inflation in the US and the rate of inflation in the tourism and hospitality businesses in the US, combined with the dollar to euro exchange rate, it means that Ireland - even at the prices we are at - is presenting very good value to the US visitor. There is a significant desire among US visitors to travel to Ireland. This area would be particularly strong for us next year given how things are looking at the moment. I would not be layering in additional demand-driving initiatives at this point in time.

With domestic visitors, we are still seeing very strong intent on domestic visitors taking a break in Ireland next year. We are not overly concerned about that at this point. Domestic visitors are very agile and very quick to decide. If the value is there they will go. They make the decisions in a relatively short timeframe. If the value is there they will go. We would, however, be concerned around excessive pricing. It might depress that later on in the year but as Mr. Fenn said, the booking cycles are so short now it is hard to read into what is currently on the books, or read anything from it. The intent certainly is high for domestic visitors to take a break domestically next year.

Chairman

Is Senator Hoey happy?

Senator Annie Hoey

I have one more question around the staffing side of it. We have had different presentations made to this committee about staffing in the industry and making it an attractive career option for people, and to move away from the belief that people would come into it as a seasonal job or just as a job for students. As a State, are we doing enough to train those professional staff to work in this sector? This pertains mostly to the technological universities or the former institutes of technology or the institutes of further education, where a lot of that training happens. Is there any specific training that needs to be developed further, or does the training already there need to be enhanced? I am a spokesperson for further and higher education so I am particularly interested in how we are training people for careers, not just training people to come in and then leave the sector again. What else can be done? Is enough being done? Do the witnesses know of anything that could be done in that regard?

Mr. Paul Kelly

I will pick up on that initially, and then perhaps Ms De Saulles and others from the Irish Tourism Industry Confederation might respond.

As a State, there is no shortage of the appropriate training courses and college places there for people to access the skills they need to enter the industry. There is no shortage of good employers who, once they get people in, are very good at promoting and developing them. There is no shortage of ongoing continuous professional development opportunities provided by the State through Fáilte Ireland. As a State, we do more than almost anywhere else. Most importantly, this year we have the addition of a world first with our employer excellence programme, which was launched by Ms De Saulles and her team earlier this year. Perhaps Ms De Saulles will give some of the numbers on that because this is a hugely important development, not just in bringing people into the industry and making the industry attractive but also about retaining them in the industry.

Ms Jenny De Saulles

Currently, 175 businesses have signed up to that programme, with 2,300 managers having gone through the training. More importantly, 20,000 employees are currently being surveyed through that to talk on how they feel about working in the industry, and if they are seeing career progression and so on. This is nearly 10% of employees. As Mr. Kelly said, this programme is an absolute first. No other sector is doing that. It is important to understand the context. We are aware that if a person is at second level or third level sometimes there is a lack of understanding of the industry and the career opportunities it has to offer. As Mr. Kelly said, there are enough courses and opportunities, but we must make sure people outside of the industry understand the career progression and the opportunities within the industry. A big part of the employer excellence programme will be about showcasing great businesses and the opportunities they offer.

Ms Denyse Campbell

I compliment Fáilte Ireland on the work it is doing in this space. We have good working relations with our local education and training boards, ETBs, with which Ms Fitzgerald Kane is involved from an analytic perspective, as well as the universities. The challenge for us now is, as Ms De Saulles mentioned, the need to educate at secondary school level to get people into a career in tourism. That is what we need to focus on. The perception of our industry at secondary school level is a concern for me.

Mr. Eoghan O'Mara Walsh

I will not labour the point. Obviously Ms Campbell and Mr. Fenn speak on behalf of the Irish Hotels Federation. The Irish Tourism Industry Federation is the wider industry. The tourism industry is and always has been a great employer. It always will be. It is people-oriented and labour intensive. It is the biggest regional employer we have.

I also wish to commend Fáilte Ireland on its initiatives in that regard. It is particularly important that we focus on it because there is a great variety of careers within tourism. Often we just need to get that message across and make sure the perception of tourism is kept high.

Going back to the stay and spend scheme, I agree with Mr. Kelly. I do not think it is the correct lever at the moment. It was brought in during Covid-19 when there were no international visitors and we wanted to stimulate the domestic market. It did not work because it was cumbersome and it was administered through the Revenue Commissioners. If the Government or policymakers were to do something at the moment it should be such things as extending the VAT rate or giving a more generous business energy support scheme and extending that beyond February and, crucially, a balanced plan as to how refugees and asylum seekers are to be accommodated so that we can make sure that the tourism accommodation stock is available for the tourism economy. If those levers could be pulled it would be much more effective and beneficial for the industry in the year ahead.

Deputy Brendan Griffin

I thank the witnesses for coming in and for the work they do. I disagree with Deputy O’Sullivan. We need more Kerry advertisements actually, I want to put that on the record. It would be useful for the overall discussion on the humanitarian crisis we are dealing with, to have a breakdown of the average hotel occupancy rates per county. Is there a breakdown of the percentage of beds per county occupied as part of the humanitarian effort at the moment? I would say there are probably big differences between certain counties. That would help to inform debate on the issue. Is there a breakdown in regard to star ratings? A concern that has been flagged to me is that there is more pressure in the lower and more affordable offerings in the market. If there is some information on that it would be helpful. That might be useful for Fáilte Ireland as well as the Irish Hotels Federation. Does the Department have that information?

In regard to business conference tourism, if I recall correctly a subvention is available per head for conferences for overseas visitors. Does that contribute further to prices, particularly in Dublin? Is it an issue that should be considered for regional areas only until prices in Dublin stabilise? A great deal of long-term planning goes into conferences and business tourism. Should this be reserved for long-term conferences, much further into the future, until pressure is taken off the system?

Mr. Paul Kelly

We have a county-by-county breakdown. We worked with our colleagues in the Department of Children, Equality, Disability, Integration and Youth to get that county-by-county breakdown of the stock that is being used for humanitarian reasons. We can circulate that to the committee. We do not have the total occupancy but it is the stock that is under contract to International Protection Accommodation Services, IPAS. We will share that. It shows disparate figures in some counties. In some counties the stock is up in the region of 80% or 90%. We do not have a breakdown by star rating because that is not how the information is provided to us. I am not sure whether we could produce that. However the Deputy’s point is absolutely right. The three-star type of accommodation stands out first and foremost followed by the four-star. That is because of the economics of it. What the hotels can earn in the tourism market versus what they can earn by having full occupancy on a Government contract means the economics work better for the provider. Deputy Griffin is right, it is coming out at that lower end of the market. As challenging as that is, it is better from a wider tourism point of view that it is coming out there rather than at the higher end of the market.

On the point about conferences, we provide a bounty per delegate. That is an important tool to secure conferences. Conferences are generally secured many years in advance. That bounty per delegate is part of that. The year ahead, 2023, looks good for Dublin and Ireland in general from a conference point of view. Most of that business was won a long time ago before we faced into the current challenges. We are now working on conferences that will be held in 2025, 2026, all the way out to 2030 and beyond. Those per-delegate bounties are important to secure those conferences. We have put extra effort and weight into supporting and improving the regional dispersion of conference business into Kerry, Shannon, Cork and Galway where there are convention bureaus and the facilities to host them. We have made significant progress on that and achieved a better regional spread. We continue to work on that. We put disproportionate support into regional conferences. We are cognisant of managing, and we will not be chasing more conferences in Dublin for 2023, because of the capacity situation. However it is important that we keep chasing those conferences for future years because we do not know what the situation will be. It is also important to know that a hotel bed taken by a conference delegate is worth more to the Irish economy than a hotel bed taken by almost anyone else because of the spend per delegate it brings into the economy, not just in tourism but into entertainment, audiovisual equipment, food and beverage and into the whole wider economy. That spend per delegate is higher. The best place to put a hotel bed from an Irish economy point of view is to a conference delegate.

Mr. Eoghan O'Mara Walsh

That county-by-county breakdown is, as Mr. Kelly said, available from the Department of Children, Equality, Disability, Integration and Youth and I am sure he will share it. It makes for very interesting reading, even alarming reading if you are looking at it from a tourism perspective. For example, in County Kerry more than 35% of beds are currently contracted. In Donegal the figure is more than 50%. Our central point is that this is the current situation. It is winter in Ukraine and the bombings continue, it is a cold, harsh winter and refugees will continue to come, as will international asylum seekers. Our big concern is that, it is the Department of Children, Equality, Disability, Integration and Youth that is managing it and its first concern is just to get a bed and a roof over the heads of refugees. However unless there is a whole-of-government approach and a real, proper comprehensive plan in this regard, the danger is that more and more tourism beds will be sucked into the system and there will be ever fewer tourism beds available for the tourism economy. That has consequences which we have talked about. In the summer next year if there is not a tourism season in Killarney, or Westport or in Donegal or wherever, that impacts on the local economy, on livelihoods and so on.

There will be great dissatisfaction. It is an important issue. It is difficult to articulate and talk about because we want to be as generous and welcoming as possible to these people. There needs to be a comprehensive plan about how they will be housed, not just now but over the next two years. That is at least how long this crisis will be with us. It is a critical issue. I am trying to be constructive about it rather than alarmist. The industry and the hotel sector are happy to play their part, but we cannot be the sole accommodation provider for refugees and asylum seekers. The approach has to be much more balanced. The summer season, which is really from March onwards, will be upon us before we know it.

Deputy Brendan Griffin

Does the conference bounty vary? Is it negotiated bilaterally? Is there a set amount?

Mr. Paul Kelly

What we are able to do depends on the budget allocation that we have. We have had a lot of success. We have had strong, fast recovery in business tourism in 2022 and 2023 because during Covid we upweighted that per-delegate bounty to get business tourism back up and running, particularly in city centres where offices are still not back to pre-Covid levels. Businesses in urban areas, particularly Dublin city centre, really rely on that business. We upweighted that but that increased weight is now out of the system and we are back to the current level of per-delegate bounty. We have not decided its level for future years yet. We are waiting for the finalisation of budgets etc. to look at it. I will certainly take back and consider the point about altering the per-delegate bounty, like we do with other supports to support regions where there is more capacity and regional dispersion.

Deputy Brendan Griffin

I thank Mr. Kelly. That will be welcome. Could he provide a breakdown of the spend per county over recent years, including a pre-Covid sample from 2018 and 2019, of where that bounty is spent, if that is available?

Mr. Paul Kelly

I will check that. I am not sure what way the data are gathered but I will see what is available.

Senator Shane Cassells

I welcome the witnesses back to the committee. I will pick up on that point about the breakdown of counties. That is hugely relevant to the discussion. Mr. O'Mara Walsh touched on it, saying Kerry is at 35% and Donegal is at 50%. The witnesses talked about solutions by Government. By March next year, the more than 60,000 people will not be housed in their entirety, so the facility of tourist accommodation beds will still be used. It is relevant to the discussion of the pressure points for the league table of counties in the higher echelon, such as Kerry, and where the response is being directed from a housing perspective. That is important since more people will want to go on their holidays to Kerry than to Cavan.

Chairman

Very risky.

Senator Shane Cassells

That is understandable. I think the issue of the star ratings of the hotel could be addressed. I know the Department of Children, Equality, Disability, Integration and Youth is handling the issue but we have officials present from the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media. It is relevant. Mr. Kelly made the point that international bookings are standing up. If they are, those people are booking now, so they have their beds and value secured. A domestic tourist who will potentially be looking at this next March or April will not have that. They will be subject to the price fluctuations. I do not think anyone in the industry is trying to throw consumers under the bus. They want to make money and to have a viable industry. International tourists will get the value because they are booking now. They have secured their rooms. The impact of the reduction in capacity, the fluctuation and, as Mr. Kelly called it, the agility of the domestic person to book late, means that domestic customers will be the ones who are subjected to this. Mr. O'Mara Walsh quoted the statistics. Which counties need to be addressed most, particularly counties in the higher echelon of tourist destinations, where people are now seeking humanitarian aid?

Mr. Eoghan O'Mara Walsh

It is a complex area and it concerns us. At the moment, many of the Wild Atlantic Way counties seem to have a high proportion of Government contracts. As I say, we can manage that in November, December, January and February, but once the season kicks in, it will be problematic if the numbers have not reduced. There is no magic wand that can be waved but vacant buildings, State institutions, unused convents, Garda stations or whatever else have to be repurposed, along with modular buildings, to move refugees and asylum seekers out of tourism accommodation to a certain extent and to rehouse them in more appropriate accommodation. We forget that a hotel bedroom or bed and breakfast accommodation is completely unsuitable for a family who has just fled war. They should really have a setting with a key to their own front door. It is a complex and worrying issue.

The Senator made a point about the domestic market versus the international market. The thing to keep in mind is that 75% or so of the value of the Irish tourism economy is from international visitation. The domestic market is important but it is only a proportion of the overall tourism buy. The Senator is right that maybe, if next summer-----

Senator Shane Cassells

That goes to my point that there is a fear that the domestic tourist is not valued as much, because if 70% of revenue comes from international tourism, the domestic tourist will be subject to the price fluctuations.

Mr. Eoghan O'Mara Walsh

That is quite possibly the case if the domestic tourist is late booking and if much accommodation is already gone, either to the international tourist or to Government contracts. There may not be availability at all.

Senator Shane Cassells

We are potentially looking at the same rows next April and May as we had here in April and May of this year.

Mr. Eoghan O'Mara Walsh

The way I look at it is that it is more serious, since downstream tourism businesses will lose out on the tourism euro or dollar. We estimate that if the number of beds currently allocated to Government contracts continues to increase at the current rate, €1 billion could be lost by the industry. It will be a damaging year for the industry. Recovery will stall. We talked before at tourism recovery by 2026. We initially thought there would be a strong recovery in 2022 and then a linear recovery until 2026, when we would get back to where we were. Now we are talking about a strong recovery in 2022 and a dip in 2023. We do not know the extent or scale of that dip. There are certain Government actions like the VAT increase and a balanced plan for tourism accommodation that could be brought into effect to mitigate the difficulties next year to a certain extent.

Senator Shane Cassells

There are two issues here, namely, value for the customer and protecting the industry. There were rows about all of that this year but I acknowledge what Mr. O'Mara Walsh is saying. I have a question for Mr. Fenn and Ms Campbell, which Mr. Kelly touched on. If two or three star hotels are prepared to sign those contracts because they represent guaranteed income in towns and areas which, going back to the other point, would not be hot spots of tourism for eight or nine months of the year, is there a sense among members of the Irish Hotels Federation that they are prepared to go with these contracts in the long term?

Ms Denyse Campbell

Demand has subsided as we come into a slower period. Hotels have probably taken contracts, from what we can see. Hotels make their own decisions and it is up to each individual business to make them. There is now less demand for businesses. On the flip-side, businesses are experiencing significant costs, including energy, food, beverage and linen costs. The cost of doing business is such a challenge for us that hotels entered into the contracts. I believe the contracts probably run until the new season, which is March or April, then it is up to each individual business.

Mr. Tim Fenn

Some businesses will continue to operate the IPAS supports. Others will go back into tourism based on whatever commercial decision they want to make. That becomes a real challenge for us because, as an industry, we have been part of the supports in the humanitarian crisis. If properties pull out of the contracts for whatever reason, people will be displaced. That is a challenging position for any business.

Senator Shane Cassells

I know this information would not exist on paper, but from dealing with the members of his organisation, potentially can Mr. Fenn tell me if it is the case that most properties that are contracted up to the early spring will maintain this arrangement? I ask this because 60,000 units are not going to be provided by next March. Is it the case, therefore, that the members of Mr. Fenn's organisation are prepared to go with these arrangements for the long haul or does he have a sense they would be prepared to say "No" instead and declare they want to try to make their revenue solely from the tourist market in the new year?

Mr. Tim Fenn

I guess it comes down to each individual business. In saying that, however, if businesses would normally have a 50% occupancy during the year and the average daily rate is €70, the chances are then they will take 100% occupancy with a figure that is perhaps twice that and provide this service. Many businesses in our industry are lifestyle at best. They are marginal. They do not make a great deal of money. It is partly almost like a vocation for the people running these businesses. When it comes to situations around challenges with pandemics and all sorts of other crises, people may not have the resources to keep the standards of the refurbishment in place etc. This may be an opportunity for people in that situation to put a bit of cash onto their balance sheets so they can upgrade and refurbish those properties when this is over. It is our hope that most of these businesses will, at that stage, when the demand for IPAS is gone, be in a position to repurpose and refurbish those properties and bring them back into the market.

Senator Shane Cassells

I have two more quick questions for the representatives from the Department. The point has been made by Mr. O'Mara Walsh that this issue is seen in terms of hotels and hotel bookings. I refer, however, to the wider spending in this context. I thank the officials for the briefing document in this regard. We have a breakdown of spending by county regarding these funds. In Dublin, some €2 billion has been spent. In my county of Meath, €80 million has been spent. I think I am right in saying Mr. O'Mara Walsh made the point that, potentially, a decrease in spending of perhaps €1 billion may result from removing these beds from the tourism sector. I am sure this is a figure that will cause alarm and one the Department of Finance would equally be alarmed about. Turning to Mr. Ó Lionáin, I ask him to comment regarding the impact of this money leaving the economy in respect of projections for the year ahead.

Mr. Cian Ó Lionáin

I thank the Senator for his question. His point is well made. It is one we are articulating with colleagues across the Government at the senior officials group in responding to the humanitarian crisis. For instance, in the recent report by the Irish Tourism Industry Confederation, ITIC, we outlined the immediate, medium- and longer term consequences for the tourism ecosystem. Some nine or ten months into the humanitarian response, it is fair to say the whole of government is trying to look beyond tourism as the mainstay support, but this is not easy to achieve. There is, though, a growing awareness of the downstream implications. This includes not only the displacement cost of spending in hotel or other tourism accommodation, but also the wider sector-----

Senator Shane Cassells

Is the suggested figure of €1 billion in decreased spending accepted?

Mr. Cian Ó Lionáin

We certainly accept the figure in respect of there being a strong multiplier of €2 to €3 for every €1 spent on accommodation.

Senator Shane Cassells

Has the industry a sense of how spending held up this year? Was there a reduction? I know we are still in the final quarter, but I would like to get a sense of the situation.

Mr. Eoghan O'Mara Walsh

Without getting into technicalities, it is the Central Statistics Office, CSO, that publishes figures on tourist spending data. The CSO has not been back doing this since Covid-19. The information we have at the moment is anecdotal, therefore. This is frustrating and leaves us in a bit of a data vacuum. It worries us that policymakers and Ministers are making policy decisions without up-to-date and accurate data and statistics. A method lies behind the suggested figure of €1 billion. It is based on the number of international visitors and those from the domestic market that will be displaced by the humanitarian situation and applying the multiplier referred to by Mr. Ó Lionáin.

Senator Shane Cassells

We are talking about hotel beds and where we put people, but ultimately, we must give people an offering when they come here. In this regard, I welcome that last night in the Seanad we had the Second Stage of the National Tourism Development Authority (Amendment) Bill 2022, which will increase the capital expenditure ceiling for Fáilte Ireland from €300 million to €500 million. In my contribution last night, I referred to what Fáilte Ireland is doing in my county of Meath in respect of the visitor experience in Brú na Bóinne, the new tourist attraction at Knowth, which is costed at €1.4 million, the work on the Trim destination town initiative, the Púca Festival and exploratory work on the Boyne greenway and navigation restoration scheme. I congratulate Fáilte Ireland on this capital expenditure because this is ultimately what will be the tourist offering for people coming here. I commend the organisation on this work.

Senator Micheál Carrigy

I apologise for being late. I was dipping in and out of the televised proceedings while at other meetings. I concur with what Senator Cassells said regarding the welcome for the legislation he mentioned. I was in the Seanad last night for the debate on the increased funding that will be coming from the Government to support the tourism industry. It has been recognised that significant supports were also provided all the way through the Covid-19 pandemic. Now, with the cost-of-living crisis and energy costs, the Government is again providing supports for the sector.

One member mentioned price gouging, and the reality is we all know this happened. It is also important to note, however, that a significantly large percentage of hotels did not engage in this practice. I mentioned before that I went on a trip to the west in the middle of August. For three nights in August, during the high season, for a family of five, the cost of accommodation was €700. I think that was quite reasonable. It is important, therefore, to note that this price gouging was not experienced countrywide. The reality, though, is that it did happen.

Ultimately, however, we are in a position now where we have a difficulty for 2023. A significant number of towns now have no hotel accommodation at all. This is the situation with my county town in Longford. It is the same situation with a significant number of towns where businesses - hotels - are closed and have signed up to IPAS with 100% contracts. There is a knock-on effect on the local economy, be it on the pubs, restaurants or coffee shops. I can also see a reduction in the number of weddings coming into these hotels as well. There is a great impact on the hinterlands of these areas as a result, including, for example, bed and breakfast accommodation.

I am involved with the local tourism committee at home. To be honest, it is hard to find a bed in the county now with the contracts that have been put in place. I do not blame the people in the businesses because they are looking to stabilise their own enterprises financially. However, if we want to save our tourism business for the year ahead and the longer term, we must examine a situation where there are no 100% bed contracts with hotels. I honestly believe this. I say this because we must have bed availability for visitors attending whatever event or conference is being held and that we are trying to promote. I would like to get the views of the witnesses on this point. Is this something that could be put in place? I honestly believe it should be put in place because I think we are damaging the tourism industry. We only have to look to the post-recession period some years ago to see it was the tourism sector that really rebuilt the economy. I will reiterate the figures the witnesses already know and state there are 260,000 jobs in this sector. I would like to get the views of the witnesses on this issue and the possibility of a proposal like this being put forward to the Department of Children, Equality, Disability, Integration and Youth in the context of IPAS contracts.

Mr. Eoghan O'Mara Walsh

I will let Ms Fitzgerald Kane and others comment on this aspect, but briefly, I agree with the Senator. If we have an over-reliance on the tourism accommodation stock, then this is extremely negative. In the ITIC report mentioned by Mr. Ó Lionáin, we have advocated that tourism accommodation providers should play their part and are prepared to play their part, but only in the region of 12% to 15% of tourism accommodation stock should be allocated for humanitarian reasons. The rest should be put back into the tourism economy.

This is not in the gift of hotels or the tourism industry. This must come from on high. We have argued for an approach led by the Department of the Taoiseach to this issue because it is so serious a crisis that a whole-of-government response is required. A humanitarian plan regarding how refugees and asylum seekers will be housed over a two-year period needs to be published. It should contain metrics and milestones, including the percentage of beds in tourism accommodation units per county or region. The plan needs to be this clear. Otherwise, too many tourism beds will be taken up and it will be concentrated in some areas. This will mean real economic woe for those areas, with tourist attractions, retail outlets, cafés etc. going out of business as a result of this situation. This crisis will pass, even though it may be years away.

When it does pass, it will be very difficult to rebuild that infrastructure and make it fit for the tourism season. There will not be things to see and do for tourists in particular towns. Thus, tourists will not go there. We are storing up considerable problems for ourselves unless we really rectify the situation. I have considerable concerns about our sleepwalking into a tourism crisis next summer.

Ms Elaina Fitzgerald Kane

Mr. O'Mara Walsh correctly alluded to the cap that would assist with the current and unprecedented humanitarian crisis and equally with stopping the stall, if one was to call it that, in tourism recovery. Before 24% of current bed stock was allocated to refugees and those seeking international asylum, the reality was that we were expecting tourism recovery in 2026. That will, potentially, be pushed out again. It is incredible to think that with all the efforts that have been made to restore connectivity to the island and deal with pent-up and deferred demand, tourism recovery is so far away. That is despite people's best efforts. We have to look at that.

We have all heard stories of communities, many of which are along the Wild Atlantic Way, and how local infrastructure has been decimated. When hotel beds are occupied, some of them are 100% occupied in villages and towns, as Mr. Fenn correctly alluded to, it impacts on everything, including the local shop and the hairdresser. It is incredible to see the impact. The winter will be very long, and it really reiterates the need for some continuity supports that acknowledge the impact Government contracts have had on the local communities because, ultimately, livelihoods and businesses will be lost. We will be in a very difficult position when it comes to repurposing those hotel bedrooms. People will be fundamentally changing their business model when they move from Government contracts and try to get back into the tourism economy. The most difficult part of that will not be the physical aspect; it will the aspect relating to people and skills. It will be very difficult. I am very worried about the impact it will have in the context of getting back to a sustainable place in tourism recovery. It has to be addressed.

Chairman

Does Senator Carrigy have any further questions?

Senator Micheál Carrigy

I wish to hear from Mr. Ó Lionáin or Mr. Kelly on that point.

Mr. Cian Ó Lionáin

We are drilling down into ITIC's report. We have tried to socialise it across Government. It is important to say the Department of the Taoiseach is very involved in trying to co-ordinate across Government with regard to the medium- to long-term response. However, I will certainly be very happy to reflect some of the issues raised here back to the senior officials group because the medium- and long-term plan needs to be developed. The Minister has been very clear that tourism accommodation is not an ideal long-term solution for families in the first instance. The second key aspect is the long-term degradation risk to the wider tourism ecosystem. We need to address that as a country. I will feed all of this back to other Departments and we will see where we go from there. There is some very useful feedback here, and I thank the Members.

Mr. Paul Kelly

I support everything that has been said. It is important for members to be aware this is not a tap that can just be turned back on. Ms Fitzgerald Kane referred to people challenges. Within the accommodation sector, in some instances, properties that have been sold from families that have run them for a long time. The properties have been bought by investors who are buying in to a model of humanitarian provision as opposed to a model of a hotel and they are setting up their business to run that way. In some cases, when these accommodations come back in, for them to come back in to tourism accommodation properly, there may need to be a change of ownership. In other cases, there will not need to be a change of ownership, but a complete rebuilding of a tourism and hospitality team within those properties, because serving visitors and tourists is quite different from serving long-term humanitarian accommodation. There will certainly be a need to rebuild the skills and teams. We know how challenging that has been post Covid.

Mr. O'Mara Walsh was making a point with regard to how those towns look for visitors if all the accommodation stock was gone and businesses were closed. Who wants to go to a town where the bars are shut, the restaurants are boarded up and the art gallery or visitor attraction is gone? It is very important to be aware of the complexity in getting this back in to tourism if too much degradation of the wider tourism ecosystem has been allowed to happen. Some very big challenges are to be faced and that is why the work the Government is doing is very important. To be as imaginative, create and aggressive as possible in finding alternative solutions for people, especially to plan for next summer, now, in order that as much of this accommodation as possible can come back in to tourism.

With regard to the Senator's point about contracts within percentages of hotels, I think I heard him ask whether should direction be given to IPAS to only take a certain percentage of stock from any one hotel. There are real challenges with that in the context of how to set such a percentage. Even if one says it is a maximum of 15% from any one county, one could still take all of Youghal and still take less than 15% of Cork, but it is devastating for Youghal. If one manages that per property, one has an incredibly complex situation to manage. There is a value in how one manages that mix and keeps a separation between long-term stays in properties and short-term transient visitors for the guest experience. It is quite a complex area to try to manage but the general approach of trying to find as many alternatives as possible ahead of the next summer season is key.

Senator Micheál Carrigy

I do not see how it could be complex. If we know the number of beds in a hotel, we set a percentage and that is it. We set the maximum the contract will be and there is always an availability for the conference visitor or tourist-----

Mr. Paul Kelly

It is complex for the operator of the hotel. Mr. Fenn or Ms Campbell may have a better perspective on this but one may find it is far easier to take out one hotel in five than to take 20% of beds from five different hotels. We know the numbers and we have all the data. However, one may have a scenario where operators say they will take if they can switch their entire hotel in to that business but not if they have to operate two different business models. How do they manage their restaurants and common areas? It is quite challenging on an operational level. One may end up with much less accommodation for refugees and others requiring protection with that model. Mr. Fenn may know more about the operational side.

Mr. Tim Fenn

It is very hard to speak in general on the complexity of individual hotel businesses, whether one has ten, 20, 100, 200 or 300 bedrooms. We are looking at an overall picture of the complexity and importance of hotels as an infrastructure and part of the economy and the damage done when they are taken out of local areas. When one tries to figure out where one will get to, one cannot control what is happening with regard to overseas international protection but we have to look at ways to repurpose the industry to where it should be when all of this is over and done with. This is why we call on the Government to make sure it pays attention to the marginality of some of the businesses and what happens to communities when those businesses disappear.

I suppose we have to look at the marginality of some of the businesses, what happens to communities when they disappear, what we do to get them back into the hotel trade, and to make sure they are going to be viable going forward. That is where we feed into the narrative around what is important for our society and economy. If we are serious about tourism as an industry, we have to pay particular attention to decisions around the 9% VAT rate and moving that to 13.5%. If you take it that energy costs and all kinds of other costs in hotels are going up and if the Government is adding 50% on top of the VAT because it thinks it is the right thing to do, we are saying here and now it is not the right thing to do. As a country, we have to be serious about tourism and we are now seeing some of the damage that can happen when the industry is put in peril. That is the strong message we have today.

Chairman

It is. Does Senator Carrigy have any further questions?

Senator Micheál Carrigy

Just to come in on that, I think the word crisis was used and that is what we need to look at. I totally concur with Mr. Fenn's comments. I do not think now is the time to put up the VAT rate. I would be very strong on that and I have said it publicly that we need to extend it further. I ask the Department and the Minister to consider it further in the context of where we are at. We talked about skills and when these businesses are not operating as they were, the skills are being lost. Chefs and people are being lost out of those businesses. When you look around the country, and I have looked at this a good bit recently myself, there is very little in the line of third-level qualifications to get people qualified in that area; as a chef or otherwise. I know there was an announcement in Killarney with Cork and Kerry education and training boards, ETBs. They were working on and trying to do something for the midlands and the upper area of the country where we do not actually have any proper catering colleges, in order to bring people into the industry. If we restart the hotel industry in a number of years time, we will not have anyone to work in it because everyone will have gone off and done something different. We have the 100% contracts and we do not have those people working. Those bars are not open and the pub down the road is not getting the customers in. We need to stand back and I accept Mr. Ó Lonáin's statement that this is being done but now is not the time to put up the VAT rate. We need to keep the businesses that are there in the current market where there are high costs. I know we are giving supports but it is only 40% of the increases. I have a small busiiness myself and I have seen significant thousands added onto my bill every month. We have minimum wage increases coming up and sick pay next year, so there are huge challenges for that industry in the year ahead and we need to continue to give it support like we did back in 2009, 2010, 2011. We allowed that business to rebuild and build back up to where it was at 250,000 or 260,000 jobs. Can that message be taken back to the Minister? That is my view. We want a robust tourism industry in the future but we need to look at, as I say, the skills we are losing. I really believe we need to look at some model regarding the percentage of the supports we are giving to make sure those businesses stay open in the towns and villages because it is having a massive effect. I can see it in my own local area.

Chairman

Having had the privilege of listening to everything today, we are facing a very difficult time, more or less a crisis, within the tourism sector and particularly in the provision of hotels and beds within the hotel sector. I feel what I am hearing today is that come next March, we are going to see an avalanche in the humanitarian crisis and where these people can go but, equally, if we do not address that in a very robust way, we will have no tourism and will set ourselves back about ten years. As a committee, we just decided today on our schedule for the new year but we are going to have to scrap that after what we have heard and have the witnesses back in consistently up to March until we get to grips with this particular issue and get on top of it.

I am going to use my own anecdotal experience because we all do and it helps us relate to the work we have to do as a committee. Mr. Kelly knows I have a real concern about where we are going with the hotel sector and those hotels that have long contracts and may never ever come back into the hotel or tourism sector. I will use the Bailie Hotel as an example. Speaking to Mr. Fenn's point earlier on, the Bailie Hotel is probably a three-star hotel - I am not quite sure what it is - but it did far more than just the tourism piece in the sense that it provided the social fabric of the community. It was the place where everybody went to for their first communions, confirmations, funerals, and meetings. They were all held in the Bailie Hotel and it has been sold. It has been a family-run business for the past 20 years and has provided excellent, top-class service to the community but also as a tourism amenity for east Cavan. My fear is that while that premises and business is being sold, neither those who are selling, myself or anybody else, knows what the future holds for that business. I am using Bailieborough as an example and the Bailie Hotel is an anchor business. There are two main anchor businesses on our main street that everybody else depends on for their survival. If that one business is taken out, 50% of the anchor business is gone from a main street.

I will go to Mr. Kelly now. Is he seeing this as a common trend throughout the country?

Mr. Paul Kelly

Yes, we absolutely are. We are seeing towns like Youghal, Lisdoonvarna and many areas in Leitrim, Longford, and Donegal where we are seeing those high percentages of stock coming out and that leading to that kind of impact. As Mr. Fenn alluded to earlier, how important a piece of infrastructure the hotel is to a rural town is highlighted, not just for tourism but for the social fabric of the town. It was a very well-made point.

Chairman

It comes to the Department and Government to address this in a very robust way. Is Mr. Kelly telling me we have 12 weeks from 1 January to address this and have a plan in place that really looks at the humanitarian piece and at getting tourism up and running again to where it was pre-Covid?

Ms Denyse Campbell

Senator Cassells asked what our thoughts were on this. Many hotels would have pre-agreed contracts in place with tour operators and they all have contracted business which starts in essence in March so really hotels will not have a choice. They have honoured these contracts year after year and they need that business so we will have a problem in March, yes.

Chairman

Therefore, we have literally 12 weeks from 1 January to address this in a meaningful and robust way and to have a plan.

Ms Denyse Campbell

We do, yes.

Chairman

Obviously this is a combination and an all-of-Government approach. The Minister, Deputy O'Gorman's Department ultimately has the responsibility of finding beds and rooms for the humanitarian crisis that is happening. What has been the collaboration so far between the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media and the Department of Children, Equality, Disability, Integration and Youth in terms of planning for this?

Mr. Cian Ó Lionáin

It is fair to say the collaboration has been intensifying in the past few weeks. Between February and autumn was the reactive phase and hotel stock was there but in the past number of weeks collaboration has been a lot stronger and many conversations are happening not just between the two Departments but across Government at senior official level. One of the key messages that the Minister, Deputy Martin, has been trying to get out there is the wider implications. Obviously she has a remit to defend tourism but tourism plays an incredibly vital role in the rural fabric of Ireland in particular. It goes beyond that. I can only see that collaboration intensifying in the coming weeks but the Chair is right in that it is a whole-of-Government and indeed whole-of-society challenge to figure out how we meet the genuine humanitarian needs of people fleeing war while------

Chairman

Without disseminating or - what is the word I am looking for - destroying our tourism business.

Mr. Cian Ó Lionáin

Undermining tourism, yes.

Chairman

Undermining a business that has taken years to build.

Mr. Cian Ó Lionáin

That is the challenge.

Chairman

There is a plan. The first thing is that there is collaboration between the Departments. That is key and most important. In terms of information we are receiving here for our three organisations today, Mr. Ó Lionáin can take on board everything that has been said. Has there been good collaboration between the Department and organisations so far? Has there been the opportunity to air those concerns very well?

Mr. Eoghan O'Mara Walsh

The collaboration between agency, industry and the Department is good.

One of our frustrations is that the humanitarian response has been spearheaded by the Department of Children, Equality, Disability, Integration and Youth, so that is why we are pleased there is now a senior officials' entity and all the tourism concerns are being socialised and articulated. We actually need a response and action, which is not necessarily in the gift of the Department of Tourism, Culture, Arts, Sport and Media or the industry, but it is in the gift of the State apparatus. That is why we are asking for a whole-of-Government approach led by the Department of the Taoiseach, with a proper, comprehensive plan. If there is continuous overreliance on tourism accommodation, with numbers which will only go up, then, as clearly as night follows day, we will head for a really rocky period which could have long-term negative consequences for the tourism industry.

Chairman

If beds are not available, people will go elsewhere.

Mr. Eoghan O'Mara Walsh

When the Ukrainian situation is resolved and, please God, all these refugees are able to go home, the tourism industry will be seriously denuded. That is the big concern. The collaboration at this level is strong but we need the upper echelons of Government to get it and to come up with a response to our concerns.

Chairman

The gentlemen have given reassurances today that they will transfer that information and make sure that the higher echelons of Government actually know exactly the implications this will have for tourism.

Ms Elaina Fitzgerald Kane

It is fair to say that it is not sustainable now, so when that tourism market opens up, as it does with St. Patrick's Day, a real crisis is looming. There is huge concern and a sense that we could be back here talking about it all the time. That is the reality. How are we going to fix it? We are looking at repurposing accommodation that is not even accommodation at the moment and at modular housing. We have to think bigger than where we are now to get the right balance because, at the end of the day, hotels have contracts as Ms Campbell said earlier. There is a real humanitarian crisis running side-by-side with that. We want to make sure that we are doing the best we can to ensure we are looking after and following up on our commitment to people who have come seeking refuge here, and equally looking after our tourism identity and inevitably trying to position ourselves for that much-needed recovery. Many businesses have come out of Covid and flourished. We have lagged. This is definitely stagnating where we need to get to be sustainable.

Chairman

When Ms Fitzgerald Kane says that, is she referring to the wider tourism product rather than just hotel beds?

Ms Elaina Fitzgerald Kane

Absolutely. The Chair referred to her community and the Bailieborough Hotel. We are lucky enough to have three hotels. We are intertwined with other events, such as GAA meetings. The Chair spoke about funerals and communions. We are woven into the fabric of our community. When the pandemic came, even before announcements were made about everywhere closing, many of our local retail shops closed. Some are more specific to tourism but some were general clothes shops and so on. There was not sufficient throughput. I see people coming in laden with bags, spending in the local economy, and supporting those local jobs. I would have serious concerns. None of the hotels in the context of where we are is contracted because many are in the events business. Events inevitably happen all year round, at weekends, and so on. For communities where all the accommodation is potentially taken up, that has a significant impact on the business community and the tourism community, and as the Chair said, on the fabric of the community. It is monumental. It took a pandemic to realise how hotels and tourism are part of the infrastructure of so many regional communities. This is a different crisis.

We need to expedite the current whole-of-Government approach because it will only get worse. More people may come into the country, and then we will have the tourism influx. How will it all balance? We talk about occupancies of 90%, but there will be false versions of any information. Right now, 24% of accommodation is being used to provide homes for refugees, but the reality is that if one adds that to 71% to 73% levels of occupancy, which we saw in 2019, that is nearly 100%. That will lead to distorted market conditions. This will lead to the demise of the tourism product because, with nobody to go to attractions, they will not be sustainable. All these issues are real and profound. It will potentially be a bigger problem regionally than in Dublin.

Chairman

We have heard a stark presentation for everybody here today. It is great to have the Department here, which is working with might and main to try to address this. I can say definitively, without the agreement of my colleagues, that we will look to have the witnesses in early in the new year to see where we are and what the plan may be. I am very concerned, from what I am hearing today, about what will happen in March. I am concerned about how the tourism industry can even plan for beyond that while we develop a plan. There is a deadline in March where those beds will go back into tourism. We need them to be back in use for tourism as part of the wider tourism product. How do we address that while simultaneously addressing the humanitarian crisis? It is a huge ask and not easily solved. We need to be active on this issue as a committee.

I thank everyone sincerely for their comprehensive presentations today. Stark and worrying concerns have been raised. As a committee, my colleagues and I will have no difficulty in continuing to address this early in the new year.

The joint committee adjourned at 4.57 p.m. sine die.